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Suing Gartner Doesn’t Work After All

Recently ZL Technologies Federal lawsuit against Gartner was dismissed by the Federal Court for the Northern District of California. ZL had sued Gartner over their placement in the email arching Magic Quadrant and Gartner’s supposed bad acts that had cost ZL millions in sales. ZL will not be able to cash in on the $1.696 billion in damages they had claimed. This post explores the details behind the Court’s ruling on the seven claims ZL made. We also provide some advice from a noted industry expert on how companies like ZL can actually use marketing, sales, and branding to positively influence their relative MQ positioning.

Product Management Financial Literacy

Earnings for tech companies continue to grow, but revenues are declining. Tech heavyweights like Microsoft, SAP, Oracle, & IBM saw their revenues declined anywhere from 7% to 31% in the third quarter. If these tech giants are struggling to grow their top lines, then you are probably having a hard time as well. One of the most common complaints cited by sales teams and sales management is that prospects simply cannot appreciate the value a company’s offerings bring to the table and the significant economic benefits they could achieve if they simply implemented your solutions. Often, the root cause of these problems is that product managers and product marketeers lack the financial literacy skills needed to express compelling value equations for their products and services. This post explores the importance of financial literacy for product managers, a quick test to assess your team’s financial literacy, and some resources to help close any knowledge gaps that might exist.

JDA & i2 Part Deux or The ‘New Normal’ for Tech M&A Deals

In late 2008 JDA attempted to acquire i2 by primarily funding the deal with new senior debt. As the credit markets melted down JDA was unable to close the financing and ended up walking away from the deal by paying i2 a $20 million termination fee. Barely 11 months later, JDA and i2 have struck a new deal at a higher price, but with a radically different transaction structure that is engineered to ensure certainty of closure for the i2 shareholders. This post explores the history of these two transactions and the creative structure that JDA is proposing. This new structure has the potential to become the blueprint for technology M&A transactions in the post-credit-crunch world.

[ More ] November 11th, 2009 | 1 Comment | Posted in Management, Private Equity, Product Management, Venture Capital |

SaaS Company Valuation Trends

How does the market value SaaS companies in comparison to other software companies? Out of 25 different categories of software companies, pure play SaaS companies are the third most valuable category. Not surprisingly, SaaS companies are faring well on exits as well. In this post we will take a look at SaaS valuation and exit trends as well as some interesting trends that potentially foretell a significant slowdown in SaaS company revenue growth and valuations.

Using Wisk to Clean Up Your Social Media Reputation

Earlier this week, the makers of Wisk (the ‘ring around the collar’ folks) announced a Facebook application (Wisk-It) to help you remove pictures on Facebook that you really don’t want the whole world to see. This post explores the social media reputation repair community, including the infamous Dr. Phil’s recommendation for how to fix your social media faux pas. We also ponder what other well known brands (Ivory Soap, Clorox, Preparation H, etc.) could get into the social media reputation repair business.

[ More ] November 4th, 2009 | 2 Comments | Posted in Management, Product Management, Social Media |

Suing Gartner Won’t Solve Your Magic Quadrant Problems

On May 29th of this year ZL Technologies sued Gartner Inc. and one its analysts, Carolyn DiCenzo, for defamation, trade libel, false advertising and other charges over Gartner’s placement of ZL Technologies in the 2009 Email Archiving Magic Quadrant. In their original complaint ZL asked for over $1.696 billion in general and punitive damages, plus attorney’s fees and disgorgement of any of Gartner’s profits from the unlawful acts claimed by ZL Technologies. While I can empathize with the challenges of being placed in the ‘Niche Quadrant’, I also know from experience that strong execution can improve a firm’s Gartner rating over time. This post explores the details of ZL Technologies’ lawsuit as well as the grim reality of how their competitors have scaled their businesses to the point that ZL has little to no chance of ever achieving market leadership, except by suing Gartner.

[ More ] October 27th, 2009 | 4 Comments | Posted in Management, Product Management, Venture Capital |

Mary Meeker Internet Trends October 2009

Everyone is looking for the looking for the next big wave to ride in the tech marketplace. While social media has exploded in the past year it has not created a wave of hyper-valuable new companies aside from Facebook, MySpace, Twitter, and Zynga. Morgan Stanley’s Mary Meeker thinks the next big wave will be Mobile Internet. Mary details her thinking in her Web 2.0 Summit presentation “Economy & Internet Trends” As TechCrunch’s MG Siegler noted “She thinks the mobile web will be 10 times as big as the more traditional desktop Internet, and that it will grow much faster.” The entire presentation is embedded in the post, along with a copy of the presentation she developed in March 2009 that described the background of the current recession along with her perception of the emerging Internet and Social Media opportunities.

Putting Recent IPO / M&A Hype in Perspective

In the past two weeks there has been a huge buzz about how some recent IPOs and M&A deals signals a return to the good times of great technology company exits. Thanks to some decent stats from the National Venture Capital Association and Thomson Reuters, the reality of the situation is pretty grim. Most tech companies stand a better chance of winning the Lotto than getting a 10x return exit. This post takes a look at the numbers as well as examining how minority investments may be the best short term exit alternative for tech companies.

Will Twitter Dis-intermediate Investment Bankers?

It was bound to happen sooner or later. Twitter is now being credited with playing an important role in two companies selling themselves. This post reviews the recent sales of Tinkoff Restaurants and JobVent, both of which marketed themselves for sale via Twitter.

[ More ] October 5th, 2009 | 1 Comment | Posted in Management, Private Equity, Social Media, Venture Capital |

How to Build an Exit Strategy

Exit strategies for technology companies are like sex in high school – everyone talks about it but only a few are doing it right. The objective of this post is to layout a basic approach your company can use to achieve a successful exit. There are three major components to an exit strategy: 1) Understanding Exit Options, 2) Identifying Likely Exit Scenarios for Your Firm, and 3) Developing and Working a Specific Exit Plan. The post also includes a model you can use to estimate the value of a strategic acquisition, leveraged recap, sale to a minority investor, sale to a financial sponsor, or conversion of your business to a cash flow / lifestyle model.


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