Monthly Archives: April 2012

Enterprise 2.0: Freemium first, enterprise second (Part 1 of 3)

The market for Enterprise 2.0 apps has taken off in the time since I first alerted consumer software entrepreneurs to this huge new opportunity (Enterprise 2.0: Calling Consumer Internet Entrepreneurs!”). Multiple venture-backed Enterprise 2.0 companies already boast billion-dollar-plus valuations, and there have been a number of quick and profitable exits (EchoSign, Jigsaw and TripIt, for example).

Enterprise 2.0 remains one of the best opportunities in the technology market today. The enterprise software incumbents are currently a full generation behind, just now entering the traditional SaaS market through acquisition (for example, Oracle’s $1.5 billion acquisition of RightNow and $1.9 billion acquisition of Taleo, and SAP’s $3.4 billion acquisition of SuccessFactors).

Meanwhile, more forward-looking software companies like are realizing that the route to the enterprise now goes through the user, not the IT department. has snapped up several Enterprise 2.0 companies, including Assistly, Rypple, Manymoon and Groupswim (now Chatter).

But is the exception. It will be another five years before the mainstream enterprise software market wakes up to the fact that Enterprise 2.0 apps are the industry’s future. That’s plenty of time for new companies to establish market leadership and challenge the incumbents, who will either have to adapt or buy Enterprise 2.0 startups to remain competitive.

In my previous article, I described the go-to-market model of a typical Enterprise 2.0 startup in three phases: freemium, inside sales and enterprise sales.

This article is focused on phase one — freemium. In follow-up articles, I will dig into the transition to an inside sales force and then how to add a profitable direct sales force to the model. Almost all Enterprise 2.0 startups employ each of these sales strategies sequentially or in parallel at different points in their maturity.

An effective freemium go-to-market effort depends on product design, distribution and conversion.

Freemium product design 

Enterprise 2.0 starts with the premise that “users” are “consumers” first and foremost, and that they make the software purchase decisions, not the IT department. So how do you attract enterprise users?

1. Make your app fun. Employ game mechanics, from vendors like Badgeville, to drive engagement. Design an app that you’re passionate about — perhaps because it addresses one of your own needs. Give it a personality. SurveyMonkey is a good example of app personality resulting in increased market share. The last thing users are looking for is a boring software experience.

2. Study your active users. The key metric of freemium product design is active users. Instrument your app with analytics tools from vendors like Google Analytics or Flurry. The data your users generate will drive product management and usability decisions, which in turn will drive conversion and revenue. Determine the most popular features, and then remove the least popular ones. As Twitter co-founder Jack Dorsey says, “Simplification is key.”

3. Pre-populate the data. No one likes an undecorated room, and no one likes an app with no data. Incorporate data from outside sources such as Google Apps (email and contacts), (accounts and status), Facebook or LinkedIn (contacts and relationships). Can you expose anonymized or aggregated data from other users? Is crowd-sourced data an option?

4. Don’t forget the APIs. Users expect freemium Enterprise 2.0 apps to work with their existing systems. Publish your own APIs and let your users build integrations and product extensions, and then publish these back to your user community.

5. Prioritize the platforms. Your app also needs to be available through web browsers, iOS and Android, at a minimum. Depending on your specific application, making it available via desktop downloads, bookmarklets, browser plugins or MS Office plugins may increase your user base. HTML5 and cross-platform development tools such as Appcelerator and Sencha can help with this.

Freemium distribution

The key metric of distribution is downloads, so make your product available everywhere your user is likely to be. In my experience, mobile apps tend to accumulate two to five times more users than web-only offerings. Venture investor Fred Wilson covered this in his blog post, “Mobile First, Web Second.”  The mobile market is much larger too. Smartphones and tablets outsold PCs by almost two times in the fourth quarter of last year.

1. Target the mobile user first. Enterprise 2.0 app developers should target the mobile user via the Apple App Store and Android Market (recently rebranded Google Play). The Appstore for Android is the next place to focus in terms of importance. If you have the resources, you should also consider developing for secondary app stores such as Windows Phone Marketplace or Blackberry AppWorld. Getting ranked and positively reviewed on these sites takes some effort and capital, but it’s worth it.

2. Focus next on the web marketplaces. Remember, your goal is downloads. Google Apps Marketplace is Google’s SMB offering. It promotes apps that are highly integrated with Google Apps (Gmail, Calendar, Sites, Docs) and has a healthy market share among small businesses. Google’s Chrome Store is geared more towards individual users, but it is also a productive distribution channel.’s AppExchange, one of the original marketplaces for Enterprise 2.0 apps, is being repositioned to serve users, not just system admins, and will be another new channel.

3. Investigate the marketplaces of other leading Enterprise 2.0 apps. Examples include the Intuit Marketplace, LinkedIn Application Directory, MailChimp Integrations Directory, Splunk Partner Portal, FreshBooks Add-Ons, Box Applications, Atlassian Plugin Exchange and Heroku Add-Ons.

Freemium conversion

The key metric here is conversion rate. If you have successfully executed your product design and distribution, you should have a sizable free user base, and in my experience, one to three percent of them will convert to your paid version. Increasing your conversion rate may be the difference between success and failure, so experiment with ways to improve it.

1. Erect a paywall. The most common way to convert free users into paying customers is to erect a paywall that unlocks additional features or capacity. The analytics you collect from your early free users will give you insight into which features are considered most valuable, and thus what you should consider charging for. A single monthly price per user is the most common method of charging.

2. Offer a preview or free trial of additional features. One common way to increase your conversion rate is to entice users to upgrade by offering a preview or free trial of additional features within your app.

3. Remove barriers to conversion. One company, Atlassian, has developed a clever way to increase in-app conversion called Causium. Instead of charging users, Atlassian asks them to donate a small amount to a charity called Room to Read. The fundraising is for a good cause, but the strategy is really designed to get users to input their credit card details, thus removing a crucial barrier when you attempt to convert them to a paid subscription later.

4. Feel the love. Evernote CEO Phil Libin believes in the “NPR model.” Evernote gives users a fully functioning app for free. Libin believes that by developing a deeply loyal and happy user base, some will love the product so much that they will voluntarily pay for the premium edition. Even if your users don’t love your product as much as Libin’s, offering a fully functioning free app and then selling premium add-ons, such as integrations with existing enterprise applications, is an effective conversion strategy.

“Freemium” is an evolving term and startups are constantly experimenting and redefining the model as it applies to Enterprise 2.0. Please let me know what’s working for you. And stay tuned for my next article, which will outline the key metrics and best practices for selling Enterprise 2.0 software using an inside sales force.

Scott Irwin (@scottirwin) is a general partner at Rembrandt Venture Partners, where he focuses on Enterprise 2.0 and SaaS investments. He is very bullish on small startups’ ability to disrupt the stodgy enterprise software market.

Image courtesy of Flickr user bixentro.

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6 secrets for building a super team

Every tech company tries to hire the best talent available, but there is a lot more to building a great team than just putting a group of talented individuals in a room. I’ve worked on a number of teams and witnessed varying degrees of cohesion. So when I joined Stripe as our first engineer, I brought with me a conviction that we should obsess over our team’s personal interactions. And when I started building our recruiting program, I made sure we spent as much time thinking about how new hires would affect our culture as how they would perform at their jobs.

I’ve strived to create an environment of happy, productive people who are excited to show up to work in the morning (or afternoon, as appropriate!). I’ve found that this environment, while being extremely positive in its own right, also gives us a competitive advantage in recruiting. The following points are the most important takeaways that I’ve learned while heading up recruiting.

1. Only hire people who make others want to be around them.

We apply what we call the “Sunday test” to every candidate. If this person was alone in the office on a Sunday, would that make you more likely to come in just to hang out with him? We only make a hire if the answer is a strong yes. Not only should working with your coworkers be tolerable, it should be something you actively enjoy.

This principle is easy enough to espouse, but it took me a long time to become comfortable with sticking to it in practice. We have often needed to make a hiring decision on an otherwise great engineer who failed this test. And I sometimes have to remind myself that no matter how talented an engineer might be, if I know in my gut that our team would be less happy with this person on board, then it’s not worth it. Bringing someone on board who isn’t a good fit will only make it harder to hire other talented engineers in the future.

2. Each new hire should increase the team’s quality.

Every additional hire has the ability to slightly increase or decrease your team’s quality. By always pushing forward the quality, you can make a good team great. (See the Lake Wobegon strategy for a detailed discussion of this technique.)

Early in Stripe’s history, we ensured that each new hire had a skill set that was missing from our existing team. I brought my experience designing and running large-scale systems to the team; one of our subsequent employees had negotiated deals with all the major record labels. Now that we have about twenty people on staff and have covered most of our needed skill sets, the standard has shifted towards making sure the candidate can do some task better than anyone currently at Stripe.

3. Never make a hire simply for an immediate need.

As a fast-growing company, we often find ourselves with pain points that feel increasingly urgent. For example, after Stripe came out of beta, the company had to deal with skyrocketing support requests from users. I knew we had to hire fulltime support engineers, and it was extremely tempting to lower the bar. But if I had, our culture, happiness and team quality would have suffered. Ultimately, making short-term optimizations at the expense of long-term goals does more harm than good.

4. Take time to integrate new team members.

For a long time, I didn’t think we needed to do anything special to integrate new employees. But as we grew, I noticed that new hires were spending an increasing amount of time trying to figure out how our internal processes and structures worked. And even worse, I would often talk to a new hire and find that she had accumulated a slew of questions, and she wasn’t sure whom she should ask.

Now, when a new hire starts at Stripe, we put a lot of work into helping her acclimatize and become as happy, productive and effective as possible. From day one, she is assigned an experienced employee to serve as a mentor. We ensure that lots of team members spend time with her, even if they don’t work directly with her. We aid her in exploring the space of possible projects she could work on, as well as spinning her up on the skills and tools needed to do the job.

5. Be willing to let people go, but hate it when you do.

Occasionally, a hire doesn’t work out. Sometimes, the issue isn’t with the hire directly — it’s just a problem of fit with the rest of the company. In these cases, I’ve found that you need to summon the will to part ways. When we’ve done this, we’ve always felt much better about the long-term prospects of the company afterwards.

At the same time, a firing should never be regarded as a positive outcome. They are painful for everyone involved, and indicate a miscalculation made somewhere along the way. So whenever you let someone go, you should go back and determine how you could have avoided the situation in the first place.

6. Everyone gets a veto.

As the number of participants in the Stripe hiring process has grown, it’s become increasingly difficult to achieve unanimity on hiring decisions. However, we’ve been careful to preserve the principle that a single person’s strong objections are sufficient to result in not hiring a candidate. This forces us to make sure we’ve addressed all of the issues on the table, rather than simply sweeping one person’s criticisms under the rug. Additionally, we ensure that we don’t sacrifice the happiness of an existing team member for the sake of a potential new one.

We’ve worked hard to build the kind of team we’ve always wanted to work with, and I’ve been extremely happy with the results to date. We’re still learning and adjusting our principles with every additional hiring decision. But I’m convinced that building an amazing team takes discipline and strategy far beyond the ability to hire talent.

The good news about building a great team is that it’s really easy to determine if you’ve been successful. If you love working with the team you’ve built, then chances are other people will feel the same way.

Greg Brockman works on recruiting and infrastructure at Stripe, a San Francisco-based startup focused on online billing.

Image courtesy of Flicker user aka Kath.

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Freelancers Union to New York State: Stop letting independent workers get stiffed

Citing a “deadbeat epidemic” that’s robbing independent workers of thousands of dollars a year, Freelancers Union is asking consultants and freelancers of all stripes to band together for their #GetPaidNotPlayed campaign protesting the unpaid invoices that plague freelancers. The aim is to spur the government to take action to protect the growing ranks of independents workers.

The campaign takes several forms, including “The World’s Longest Invoice,” an online tally of all the money outstanding to independent pros. According to a recent Freelancers Union survey, last year that sum amounted to an average of $4,600 for each of America’s 35 million or so freelancers. In May this massive invoice will be presented to New York State lawmakers in Albany to urge them to take action. The Freelancers Union hopes the final bill will exceed $1,000,000 to reflect the scale of the problem.  Coworking spaces and freelancing websites also participated in a day of action yesterday to raise awareness.

The solution to freelancers’ payment problems is the passage of the Freelancers’ Payment Protection Act, a bill currently in committee in the New York State Senate, which could be used as a model for such legislation elsewhere, according to Freelancers Union and campaign supporters. “It’s model legislation that gives freelancers the same protection as ‘traditional’ employees – they can file wage claims for the money they’re owed and get protection from the Department of Labor. We are SO CLOSE to passing the bill and creating a historic precedent in New York that can be replicated throughout the country,” Althea Erickson, advocacy and policy director for Freelancers Union is reported as saying by Shareable.

What’s the alternative to reforming a  legal framework which isn’t set up to handle the rise of independent work? For a heart-rending story of how terribly the current system can fail independent workers, check out the tale of Anthony, a creative freelancer in the New York area, whose battle to get payment for a six-figure invoice is recounted in DeskMag. It ended with him facing the threat of foreclosure and epic, time-consuming legal wrangling.

Do you have unpaid bills to add to the World’s Longest Invoice?

Image courtesy of Flickr user kozumel.

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Wiggio snags one million users, pilots new premium service

As far as collaboration tools go, Wiggio isn’t flashy. The suite of dead simple collaboration tools ranging from chat and file sharing to polling and document creation is targeted primarily at college students looking for a way to organize extracurricular activities and group projects. There’s little grandiose talk of democratizing organizations or exploding silos coming out of the company, but what there does appear to be is a fair amount of success.

The company announced today it has reached one million users, about 75 percent of which are students. The company also announced it is piloting a new premium service that allows clubs and other groups to apply their branding to Wiggio (pictured) and offers an administrator level with custom analytics. Previously the product was free to all users, but having decided against adding advertising, Wiggio has landed on this route to monetization.

So how did the company, founded by a team of Cornell grads in 2008, gain its sizable following? CEO and co-founder Dana Lampert explained that their approach is to make users’ lives incredibly easy and then set up the product to grow virally.  ”Students are kind of a different beast,” he told GigaOM in an interview. “If they have to learn anything, if they have to read anything, if they have to watch a video even, they will be completely turned off by the tool. And, if I’m in a group of ten people and only eight of them really get it, it’s completely useless. From the very beginning we’ve been really focused on streamlined simplicity.”

Lampert explained Wiggio uses a powerful testing technique to ensure the product is incredibly easy to use – they give it to fourth graders. “I took one of our features to a fourth grade classroom and I said, ‘how would send a text message using Wiggio?’ Basically we adopted the mentality that we wouldn’t put the feature out until these fourth graders can use it easily,” he said, though the technique has run into trouble recently. “Fourth graders are getting pretty tech savvy,” he joked, saying he’s had to call in less tech-skilled family members for testing reinforcements.

So once Wiggio decided to focus on simplicity and ensured their product met this goal, how did they spread the word? “We raised a Series A round about two years ago and we made the decision to use that money to focus on product and not distribution, so our growth has mostly been natural,” Lampert said. “What we found is if we can demo the product to some student and faculty leaders at a university they find it really valuable and they’ll end up doing a lot of promotion for us. We often times have schools and leaders on campus evangelizing the product and bringing it out to the groups.” Growth happens naturally from there, Lampert said, as “the average person is inviting about 20 new people onto the platform.”

Students graduate, though, so what happens to Wiggio fans after they get their diplomas? Lampert hopes they don’t leave Wiggio behind along with their black light posters and dorm room mini-fridges, providing the product with a stealth way into the grown-up collaboration market. “We try to promote bringing it into your jobs, which is how we have some traction within businesses,” said Lampert, noting adult social groups and alumni associations are also using the tools.

According to Lampert this softly softly approach seems to be working, but his company is playing in a very crowded space. How does he see the welter of collaboration options fairing long-term? “From what I’ve seen, a lot of players are trying to become best of breed of one certain feature. Asana has beautiful task management. Dropbox is awesome for file sharing,” Lampert said, but also argued that there is room for tools that do a little bit of a lot of things. “For some organizations and groups with more tech-savvy members, it’s very easy to have them all create accounts and get access to these one-off tools. At least for the groups we serve — the less savvy consumer groups who just need to get things done — I think consolidation is the trend. I’m not saying us, but in general though the tools that bring together what I need into a one-stop shop are the ones that are going to see themselves win this space,” he predicted.

Which collaboration tools do you see winning the war of attrition – narrowly specialized offerings, suites that pull together lots of features or some of both?

Image courtesy of Wiggio.

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Bosses are for slackers like Google

When we spoke to GitHub’s Chris Wanstrath recently about how the company manages its partially remote team, he mentioned something about their setup that had nothing to do with telecommuters. The company has no managers,  though Wanstrath does get the title of CEO. Are they the only company nuts enough to go for this free-form collaboration style?

Apparently not, according to a recent excerpt from Seattle-based games company Valve’s handbook for new employees, which is stirring up loads of fascinating conversation on Boing Boing. Founded in 1996, the company lists its hundred or so team members on its site in simple alphabetical order and claims it’s more profitable per employee than Google or Microsoft. It also has a corporate culture some would view as paradisaical (and some probably terrifying), according to the handbook:

Why do I need to pick my own projects? We’ve heard that other companies have people allocate a percentage of their time to self-directed projects. At Valve, that percentage is 100. Since Valve is flat, people don’t join projects because they’re told to. Instead, you’ll decide what to work on after asking yourself the right questions… Employees vote on projects with their feet (or desk wheels). Strong projects are ones in which people can see demonstrated value; they staff up easily. This means there are any number of internal recruiting efforts constantly under way.

If you’re working here, that means you’re good at your job. People are going to want you to work with them on their projects, and they’ll try hard to get you to do so. But the decision is going to be up to you…

How does Valve decide what to work on? The same way we make other decisions: by waiting for someone to decide that it’s the right thing to do, and then letting them recruit other people to work on it with them. We believe in each other to make these decisions, and this faith has proven to be well-founded over and over again….

While people occasionally choose to push themselves to work some extra hours at times when something big is going out the door, for the most part working overtime for extended periods indicates a fundamental failure in planning or communication. If this happens at Valve, it’s a sign that something needs to be reevaluated and corrected. If you’re looking around wondering why people aren’t in “crunch mode,” the answer’s pretty simple. The thing we work hardest at is hiring good people, so we want them to stick around and have a good balance between work and family and the rest of the important stuff in life.

This approach may sound loosey goosey (and there are certainly type-A managerial folks out there hyperventilating at the mere thought of such a non-system) but as a thoughtful blog post by John Geraci, general manager at faberNovel New York, points out there is method to this madness, and it all hangs on letting folks choose their projects and then, critically, determining “the value and compensation of each employee by peer review.”

Do that and this no-boss system will actually “leave no room for unproductive people to hide. Nobody can pass the buck on to the next person, as that person is going to be determining their salary at the next review,” says Geraci. Plus, “you reward people for finding the position in the company where they can make the biggest difference.”

Of course, not every company can take advantage of this sort of productivity-boosting quasi-anarchy, Geraci points out. “Valve is … entirely self-owned with no outside investment, and it owns all of its own IP,” he writes. If you’re firm isn’t, this probably won’t fly. Nor will this structure work as a top-down restructuring, he feels, noting, “Valve didn’t design and impose this structure on itself from the top – it evolved organically toward it from the beginning.”

To be a startup that’s in a position to grow its own structure without outside investment is pretty rare (though GitHub, notably, meets the criteria), but given these restrictions, do you think a complete lack of hierarchy could work for other companies?

Image courtesy of Flickr user Gigi Ibrahim.

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Box’s Levie: Google Drive not a competitor

Aaron Levie, founder and CEO of Box, said even with the long-awaited arrival of Google Drive, he still doesn’t see Google as a competitor. That’s because he sees Box as more of a dedicated collaboration platform that happens to have storage and syncing, making Microsoft’s Sharepoint more of a direct rival than Google Drive.

“You can’t accidentally build a collaboration platform, it has to be a strategic decision to compete with Microsoft and we don’t think Google has done that,” Levie told me. “Microsoft is our primary competitor and Google Drive didn’t change that.”

Google, of course, is also touting the collaboration features of Google Drive, which is built around Google Docs. But Levie believes that Box, which was founded in 2005, has a longer head start in building a collaboration layer that works for customers. He said the business problem doesn’t come down to storage, which will continue to decrease in price. It’s about enabling workers to share information together.

“We built a collaboration platform that happened to have a syncing tool to get data into it,” he said.

Levie said companies also have a very diverse mix of computing solutions and they need to have an open, agnostic tool that isn’t built around one platform. Levie said that’s what corporate customers are looking for: a nimble, focused competitor that is targeting enterprise customers exclusively.

“If you’re a CIO, do you want a company that is trying to work on advertising, search, glasses, mobile and cars, or do you want a company that is working solely on a collaboration and storage platform?” he said.

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Google Drive is real: here’s what it means

Sundar Pichai, SVP, Chrome and Apps, Google (left) and Scott Johnston, Group Product Manager, Google (right)

Do you want to put about 16 terabytes of data online? If you do, you might want to give Google a call. Mind you, it isn’t going to be cheap — that amount of storage will cost about $800 a month. On Tuesday, the Mountain View, Calif.-based company is taking the covers off its much hyped and long awaited online storage service, and it will be called Google Drive. It is available at The Drive, which starts with 5 GB of free storage, is available to anyone with a Google account, including Google Apps for business accounts. In March 2012 I had first reported that Google would be launching its Drive with 1 GB of storage space in first week of April 2012. Well, I was off by two weeks and 4 GB per account of storage capacity.

The new service will be accessible from a Web browser along with different client devices including Mac OS X, Windows and Android devices (tablets and phones). The iOS version of the Drive will arrive soon, the company says. The first 5 GB are free, but every additional 25 GB is going to cost you about $2.50 a month or about $30 a year. The 100 GB will cost you $5 a month or about $60 a year. You can buy up to 16 terabytes of storage capacity. The Drive marries elements of Dropbox, iCloud and other popular apps such as Evernote.


At first blush, it might seem the Google Drive imitates Dropbox’s many features. However, the key differentiation point for Google Drive is the tight integration with Google’s productivity apps and other apps that are using Google’s SDK to build the Drive into their own cloud offerings. For instance, Google’s Drive allows you to seamlessly fax documents via HelloFax’s service. Another service, Balsamic, can help you create wireframes and share them with others. There are about 20 launch partners for Google’s Drive, and they are betting that Drive will bring them the much needed collaboration and sharing features that they currently lack.

Google executives, including Sundar Pichai, SVP, Chrome and Apps, went to extreme lengths in a briefing to point out that they are not operating just another online storage service. “This (Drive) is built around the idea of sharing and collaboration,” said Pichai. “We started from the underpinning of Google Docs and idea of collaboration.”

He went onto argue that as we start to spend more time living in the cloud, what matters to people is the ability to access their data in multiple locations on different screens. Pichai believes that “Drive is a bridge between cloud and local” data. He also believes that companies have to adapt to the BYOD (bring your own device) revolution that is sweeping the enterprises. (Stacey wrote an awesome post yesterday about why BYOD is unstoppable.)

Data anywhere

Start a document in Google Docs and Google Drive will save a local copy on your desktop. But that document is not editable unless you’re online to open these docs using Google Docs, which I find baffling. Sometime in the near future, the company will allow you to select a document and directly mail it using Google’s Gmail service. Google says last-minute bugs are the reason it hasn’t launched Gmail integration. Strangely, the company is offering integration with Google+. Go figure!

When you upload photos Google will use Google Goggles’ technology to look inside the photos and help you discover relevant photos by the search keyword. The OCR technology that has powered the Google Books effort will turn a PDF or a photo of a document into text for you to manipulate. Google isn’t the first company to offer such a service. However, it is the first one to bundle this and other popular features in its offering. (Oh, how very Microsoft of them!)

Of course, as it is Google, everything it does has to be viewed from the lens of search.  ”In the post-PC world the file systems don’t matter,” says Pichar. Instead what matters is data, which follows the flow from apps to devices. Pichar says that the key here is to provide context and add contours to all the information stored inside the Drive.

So what does it look like

Google gave me access to the Google Drive yesterday evening, and in whatever little time I had, I would have to say that I didn’t see anything that would cause distress. The web-based version of the Drive looks remarkably similar to the all-too-familiar Google Docs interface.

On the Mac desktop, it was dead simple to install the Drive, much like Dropbox. Once installed the Drive is represented by a folder and synchronizes in the background. The first installation automatically downloads all your Google Docs files to the folder. However, the app really shines when used on the tablets. Maybe it is because I have fewer files, but I found that I was able to access data from Google Drive on iPad a shade quicker than Dropbox, mostly because of better search capabilities.

We run our business on Google Apps for Business and I see Drive a perfect companion. Today we use Dropbox, but the process of sharing happens either on Google Docs, Socialcast or via email. Collaboration is too disjointed and the process is pretty cumbersome. Google Drive however makes it very easy to share and collaborate. I deeply dislike the icons they are using to represent docs and slides. Nevertheless, I have not had enough time to form a strong opinion (either way) about the service. I will write a post after using the service for a week or so.

Oh, it’s on

The pending launch of Google Drive has caused a frenzy of activity in the online storage industry. Dropbox, which currently leads the online storage market, launched a simple file-sharing feature yesterday that would allow them to compete with Google. Later, Microsoft talked about the availability of its SkyDrive personal cloud storage service with about 7 GB of free storage.

By being late to the market, Google has what Peter Thiel calls the “last mover advantage.“ And while the new Google Drive is a big threat to and Dropbox, if you ask me, the big target here is Microsoft. With the Drive, Google can start to nibble at Microsoft’s  highly lucrative Sharepoint business.

And while Google Drive’s launch is going to be hard on some of the smaller online storage services, thanks to Google’s massive user base, I wouldn’t count out Microsoft, Box or Dropbox — just yet.

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Design stores doubling as coworking spaces

The web, one observer recently argued, is transforming all our public spaces into coffee shops. Fast internet connections mean fewer of us need to go to the office, for example. Where do we end up instead? Coffee shop type environments. Online shopping, likewise, may transform retail stores into relaxing spaces to ogle products, pick up goods and, of course, down some caffeine. Universities? Online education is pushing them the same way.

If you buy this argument that many types of public spaces are converging on this coffee-shop-like future, then perhaps the latest development in the evolution of coworking won’t surprise you. If both work spaces and shopping spaces are becoming more like coffee shops, why not have them occupy the same space?

That’s what a handful of design and home furnishing stores are doing, inviting coworkers into their tastefully designed showrooms to work. Konzepp, a concept store in Hong Kong, combines the functions of boutique, events space, cafe and coworking space, while in Texas District Workplace coworking has set up shop in Austin Business Furniture. In Hawaii, The Box Jelly coworking makes its home in furnishings store fishcake.

The concept, as Shareable’s Beth Buczynski points out, is clearly an effort by furniture sellers to understand and market themselves to the growing coworking movement. Buczynski writes:

Every work space, whether it’s a large coworking facility or a home office, needs chairs, desks, tables, lamps, file cabinets, and various other tools of the trade. Office furniture companies want to meet those needs, and several have discovered that coworking is a great way to gain exposure among the independent workforce.

“Over the past several years I’ve had the opportunity to meet with most of the major furniture providers: Haworth, Herman Miller and Steelcase,” said Mark Gilbreath, founder and CEO of LiquidSpace. “They are all quite aware of the coworking movement, so no surprise to see them dipping their toes into the water. It’s a natural thing for them to do as they observe changes in the work behaviors of their major corporate clients (eg steady shift toward mobility) and seek to apply their knowledge of what makes for a great/productive/healthy/high performance space to the new places where work happens.”

Steelcase has taken a number of experimental steps to understand this new world. They’ve operated Workspring in Chicago for 2+ years (not a coworking space, but an incredibly cool collaborative workspace that can be booked for off-site collaborative meetings) and also operate the 654 Crowswell coworking space in Grand Rapids Michigan

Unsurprisingly given the communitarian leanings of Shareable (the hint is in the title), Buzcsynski advocates welcoming retailers to the coworking fold. “Are businesses advancing their own agenda by offering space to coworkers at no charge? Absolutely. But the onus is on the coworking movement to respond in the spirit of collaboration and community. These values minimize competition and nurture the health of small businesses and local economies. If non-coworking businesses understand those goals and want to lend a hand in their own unique way, why exclude them?” she concludes.

But others in the movement are more skeptical about the interest from retailers, suggesting that their participation in the scene could dilute the spirit of community support that coworking strives for. “It is pretty clear that coworking is the afterthought not the focus,” Liz Elam, founder of Link Coworking in Austin and producer of the Global Coworking Unconference Conference, says of these retailers-slash-space providers. “It’s like people working in hotel lobbies. It’s not the primary business and I think you would always feel like a squatter,” she says.

Should coworking fans welcome retailers with open arms or regard them with suspicion?

Image courtesy of Flickr user yutaka-f.

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Think BYOD is an issue? Wait for Stealth IT

The acronym BYOD, which stands for bring your own device, is taking over both corporate America and the press release filter in my inbox. But an analyst report out Monday suggests that BYOD has a flip side that no one talks about — Stealth IT, or the IT pro side of the consumerization trend that has swept corporate America.

There are employees bringing their own devices and apps into the workplace, as summed up by the BYOD discussions, and on the other side are IT managers taking their own credit cards (or corporate cards), grabbing company data and then playing in the cloud. Deutsche Bank notes that the issue of employees taking data and devices outside of corporate firewalls (or leaving them on airplanes) is one management headache that is getting a lot of attention and products, but the concept of Stealth IT is still ripe for new businesses and startups.

It describes the trend like this:

A much more common trend is that internal IT staff find a problem. They need more computing power, or more storage, or some outside analytical tool. Getting approval for this can often be complicated, sometimes for good reasons (i.e. security) sometimes for less good reasons (i.e. inertia and bureaucracy). Faced with a real-world problem to solve, these tech-savvy staff suffer from insufficient resources. So instead, they turn to some of the publicly available resources. The best-known of these is probably Amazon’s Web Services (AWS), but there are many, many more. … Often these expenses can be camouflaged by use of personal credit cards, or expensed as technical manuals. After all, the expense line on the credit card bill just says ‘Amazon’. A few hours of Amazon compute time typically results in two digit bill.

As someone immersed in discussion around enterprise IT and access to platforms and infrastructure as a service, I feel like this is putting a sexy name onto a problem that is already well-known among entrepreneurs, corporate IT, and even large companies trying to deliver compliance solutions aimed at this very problem. But DB says the issues go beyond compliance.

For example, the DB report asks what happens if the employee managing a corporation’s secret development sandbox in Amazon Web Services leaves. Suddenly no one in the corporation has access to that resource. Also, by going around the official processes, IT managers don’t create demand for cloud services in-house, leaving management in the dark about the potential benefits of creating an in-house platform or infrastructure as a service cloud.

I don’t find this last reason all that compelling, but I’m not the target audience of compliant-crazy and control-oriented enterprises. Easy access to devices and computing brought about by consumers choosing their own solutions instead of complicated and PC-bound corporate options are making it hard for corporations that are bound by regulations, legislation and basic corporate governance to meet compliance standards.

The folks at Deutsche Bank seem to think that a better user interface to corporate resources on the computing side and friendly apps will go a long way to solving the issue of stealth IT, but if slapping a pretty interface on top of the problem is the solution, then this isn’t that much of a problem. However, cutting through bureaucracy, giving programs a usability overhaul and finding platforms and infrastructure services that are built with compliance in mind are ways to put the kibosh on (or at least help control) corporate IT managers feel like they have to go rogue in order to get a few virtual machines.

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