I love football. To me it’s the only real sport in the US worth watching (besides playoff Hockey). There are a lot of really amazing quarterbacks in the league today. Since its a throwing game a good amount of the pressure is on the QB to execute. All QB’s dream of Rings, and there is only a certain window of time that is open for a QB in his prime to get to a Superbowl and win a ring. Example: to the left, see Tony Romo. Tony Romo will never win a Superbowl. His window is closed (Cowboy fans you know this to be true). I could probably say the same thing for Philip Rivers and my beloved San Diego Chargers, but I won’t because I’m a total homer.
Now, in technology this is also true. There is a very limited window for a a disruptive company to make or build enough of a market to break out and cross the chasm (executing before the window closes). New companies are very much like freshly drafted QB’s. They have a lot of promise, they have a lot of focus,momentum, and drive. What they do not have is a viable track record of success. Sure their college days may point out potential, but if we are honest, the Pro game is so much faster that many times a prior history of college success will not translate into professional success.
The next image presented, that is the Adoption Life Cycle, that gap is the chasm. It’s the area that all start ups are looking to cross. Relating to football terms, its the move from the Combine, to the Draft, to Starting QB. In the technology space, this is where the startups focus. There is ample advice out htere today for those new companies on how to cross the chasm. Some good, some bad. The point remains, the focus as a product goes to market is on that gap, and there is a very limited amount of time before the window of opportunity to close that gap, and cross the chasm closes.
From College, to Combine, to Draft Day, to the first Pro Start. That’s the move across the adoption cycle for QB’s and Tech startups alike. Does the QB make it to year 2 or do they pull a Ryan Leaf? Legitimate question. And once they are on the path will they ultimately be successful and reach a majority status (aka the Superbowl)? Only time will tell.
Now sometimes a company crosses the chasm, and gets to a specific point, and still burns out. Today I’m calling this the Fusion-IO effect.
Fun fact, I looked at joining Fusion-IO in 2010. Honestly, if I had, I would have probably made a good amount of money as they really hit a stride and brought server side flash into the market and changed some dynamics that have lasting affects today. Still the company today shows a very different story. I’m not trying to knock them, but they do serve as a good illustration of some of the challenges around going to market, staying relevant, and moving further along the adoption curve. It also illustrates that even good marketing and momentum may not be enough for long term success, and even the best QB’s can put up amazing numbers and still never win a ring.
Fusion IO had a lot going for it. A disruptive product, aggressive sales team, good capitalization, and some high profile name recognition (Woz was their Chief Technologist). And yes, they did IPO, and yes friends of mine at the company at the time made a lot of money, and told me that they were a 2B+ company and would grow to enormous proportions. Yet in the back of my mind, I still always thought that the company really would struggle long term.
Why did I think this? Lets continue with the QB analogy, strong QB’s in college benefit from a multitude of things that make them look far more successful than they would be in professional football ranks. Be it college rules, strength of schedule, or simply the fact that they are playing seven teams who finished below .500 the year previously (cough 2013 Louisville Cardinals), there are many factors that go into their success in College that won’t necessarily be there when they hit the Pros’. They have the opportunity to put up big numbers, and appear to be far more adept then they really are (aka Tim Tebow). This leaves a false sense of security that can, and many times does, translate into disaster. There are similarities in the technology space as well.
Fusion IO were first to market in a disruptive space. They had a solid product, and hit some perfect timing when some of the web giants were in desperate need of some significant high performance storage tiers that didn’t consist of disk. They ramped quickly and eventually picked up enough sales and momentum to IPO. Still over 60% of their sales came from 2 companies (Facebook being the biggest), and that doesn’t bode well for longevity. With all that success, I never saw them as a long term viable product or company. The primary reason being, is that what they provided was something that was easily repeatable. It was only a short matter of time before the major companies (EMC, IBM, Intel, Etc.) caught up in terms of functionality/performance and simply erased the small competitive advantage that Fusion IO had.
You have a very short window of opportunity to strike while the iron is hot and maintain that high level of execution. Very few companies disrupt, and capture long term market share, especially in the hardware market and here we see what happens when that window starts to close. With Fusion IO, their downward movement was quick. From a moderately successful IPO, to being sold to a low end commodity flash vendor with questionable Enterprise experience. It’s not what I would denote as a successful experience for anyone other than the base investors, and early corporate officers who made huge amounts of compensation.As such, their being purchased by San Disk (and there were 11 companies that turned them down) leaves me less than optimistic for their future.
Now why is that? Well for the most part, they had a very viable technology, yet it was easily repeatable. Yes the magic is in the software. Yes they had a smidgen of patents which denoted true IP. Yet their competition caught up, and they did so quickly with products that were “good enough” to be competitive in the space. This begs the question, does having the better technology itself equate to success? I would say no
much as we may want to say that the best tech wins, this isn’t always the case. In many instances, all you need is “good enough” from a tech front and OMG Awesome from the marketing and execution side of things. This is where hiring rock star talent really helps, as those A players can run rings around the B & C players that the larger orgs tend to retain.But those A Players cost a lot, and your burn rate accelerates when you get a concentration of them in one space. If you are not executing on the sales front to keep that level of intensity on, you can flame out very quickly. Also, having superior marketing and messaging is a huge plus, and can make up for a product that is less than perfect (not that any product is). You can have an inferior product, but if you project from a position of strength, and momentum, you can make up for functionality shortcomings. I hate to use the Beta/VHS analogy, but it does illustrate the point. I’m not even about to go into the long history of that example, thus google it.
So this post is getting long winded, and I think I have more thoughts around this that I’m going to push into a second post soon. I just had too much of this in my brain to not commit it to text.