Ryan Byrd's Tech Ramblings

Because tech companies seem to have a high rate of turnover, you’ll soon likely be in the position of leaving or interviewing an employee who is leaving. Either way, it’s important to find answers to some important questions such as:

• If the CEO left unexpectedly today and you were put in charge, what are the first things you would change?
• What could have changed six months ago that would have prevented you from looking for a new job?
• If you weren’t looking, what factors tipped the scale when an opportunity came up?
• Who do you think is next to resign and why?
• If one person leaving the firm would cause you to think twice about leaving, who would that person be?
• Why didn’t you leave us sooner than now?
• How did your manager communicate your responsibilities? DO you think he or she was fair and reasonable?
• Describe any areas of conflict that have affected either your performance or morale, or that you believe affected other employees

src: Inc. Magazine, April 2006

You all remember Josh Coates, CEO of Berkeley Data Systems/Mozy, right? Mozy is the company with the Windows program which allows you to backup your harddrive to their petabyte array all safe and securely. Truth be told, I could never get their app to work on my system, but that’s hardly significant. What is important is that EMC, the king of storage, just bought Mozy for a cozy 76 million dollars.

Mozy had raised only 1.9 million in capital, which makes their VC people (Wasatch Ventures) very, very happy.

You’ll also remember that Josh’s Mozy held the popular $20,000 dollar computer programming “death matches.”

Strong work, Josh!

* yes, I know that “mozying” is not a word; it’s “moseying”

• Does the business idea lend itself to venture capital investment?
  1. is it the next big thing?

  2. can it produce 5x-20x return on an investment of 5 million in 3-5 years?
  3. does it have some sort of infringement protection (network effect, patent, big head start)?
• Are there tiered service levels (e.g. free, basic, pro)?
• How many paying subscribers at what monthly rate do you predict in 1,6,12,18 months? (how did you arrive at your prediction?)
• Are there possibilities for affiliate relationships?
• What variable and fixed costs will you incur?
• How will you advertise and drive traffic to your site?
• How will you handle customer support?
• Is there any inventory to manage?
• How much staff is required? Where will you find the best people?

Start with a SWOT analysis

Then, find answers to these questions:

• Are there competitors?
• Does the service satisfy an important need?
• Is it a one time/infrequent purchase or would it be on a subscription model?
• What is the estimated profit margin?
• Does it depend on a lot of people resources to run it?
• How easily would it scale?
• How easy would it be for competitors to copy?
• Does it lend itself to patent/copyright protection?
• What is the market size?
• Are there substitute services?
• Does the service lend itself to the “network effect?”