From: Gregory Alan Bolcer (gbolcer@endtech.com)
Date: Wed Aug 23 2000 - 10:21:52 PDT
Mark Day wrote:
> > Well, if any of the Cosm info was actually public somewhere.. but it's
> > not.. so... Cosm itself isn't groundbreaking, it's the stuff around it
> > that is new... Yes we're having a "branding" problem, since Cosm is the
> > project, not a product, and it's a name not an acronym.
> >
> > The thing, whatever we end up naming itm is really a giant kick in the
> > arse to the industry (and the open sourcers too). Stay tuned, who knows
> > if I can pull this off or not.
>
> I don't even know why I care, but I notice that you didn't actually answer
> Jeff's question. You are displaying good Valley-CEO skills of relentlessly
> plugging your product/company at every chance regardless of the question
> asked, but I think FoRK deserves a better answer to a reasonable question.
>
> --Mark
The reasons why Adam's company hasn't gotten funding
by Greg Bolcer
Having just gone through the funding wringer and knowing just
enough about the history of distributed computing and having
programmed upwards of 30k lines of XDR/XPC code before they figured
out how to make tools for it, the first glance of Cosm seems
really interesting. That said, {Mithral.com:r} has done every
single "what not to do" gotcha that they teach you not to do
at the school of hard fundraising knocks. Just looking at
how Adam's gone about trying to launch his company and ignoring
for the moment whether the technology hidden or not actually
useful, Mithral will never get funding until he addresses
these issues and puts them all into 1 paragraph elevator pitch,
12 slide powerpoint presentation, and 30 page business plan.
1) "We have no competitors"
If you have no competitors, it's not a market that funders
want to be in. While the classic two-step business plan includes
baking up a big market and then, second, grab the top tier
for yourself, building a market involves an incredible amount
of time, effort, money, and traction. What VCs look for are
eastablished early stage existing markets that are rapidly growing
and have the potential to fluidly change who the players are.
Everyone has competitors, if not direct, i.e. same market, same
business model, same or similar product, same or similar need, then
you have fringe competitors or companies that are already funded
that could change their technology or business model. You can't
just handwave your competition away. Adam has a list of academic
competitors that was presented, it'd be very useful to differentiate
from them as not all of them are identified as "mad, full crush groove
successes". Even more importantly, why does the world need another
distributed model if it's not different from the others? What
are your key differentiators? Cross-platform, small GUI code?
Network stack? Binary format? Compilation libraries?
The problem I have with highly distributed systems is they often
are concurrent and parallel. How do you handle distributed deadlock?
Livelock? Synchronization? Service location and discovery?
2) Explicit Target Market
"We are targeting developers." Developers of what? Distributed
systems? Internet Gaming systems? Web Developers? Y2K Cobol
developers? An answer anybody and everybody means that your
technology isn't useful enough to any single one of them. I would
trade every single fairly useful technologies for one single
killer app. If you are targeting developers, target one that
you think would benefit from your technology is and find out
why they aren't using it, what they are using instead, and
how much pain you will save them. If they only have a mild
headache, you won't make much headway. If their current set
of technologies is making them bleed out the carotid, you
have a selling proposition. The next thing you need is
a *unique* selling proposition....
You either have a new technology into an existing market, an
existing technology into a new market, or a new technology into
a new market. The last is by far the hardest and requires the
most resources and most of the time these companies are born
out of the other two categories.
3) Binary Differentiators
So, with Cosm, I am stuck with a value proposition to the user--
their target market is developers--to build new and interesting
applications, but Adam thus far hasn't been able to come up with
one single application that you can't build with any other
set of technologies. Reading his phase I notes, it just sounds like
whatever technology he's offeirng lets you do things cheaper, faster,
or better, but doesn't focus on things you can do with his
technology that you can't do with anyone else's technology. Make
it specific. If I was an MFC developer, does that mean I can
write a VB script that can now run on Linux? So? Cosm is what?
Building a bunch of worm viruses? 8-)
4) Technology for the sake of technology
I love technology, technology has bean veery veery good to me,
Mmmmmm, technology. Once upon a time there was this extremely
smart guy that came up with an amazing product that nobody knew
what to do with. This product allowed you to store your shared
documents in a local database. Why would someone want to do that
when most everyone else stored their information in centralized
database. This product (as I remember) struggled for quite a while
even though the developers had some great development tools until
end users saw the convenience and usefulness of replicating data
between repositories. What was that product? Notes.
5) I could tell you, but I'd have to kill you.
I read and posted this, but I swear it happened to me
also. After a panel on the Tech Coast Angels explaining
how we got funded and what we had to go through, some woman
came up and wanted to share her own fundraising experiences.
She was at a very early stage startup and looking for angel
investment. "What do you guys do?" "We're not releasing
any informtion just yet as we're trying to protect our idea."
"What sort of money are you looking for?" "About $1.5M, we
only need that much until we launch and become profitable.".
"Great! "How much have you raised?" "<sidestep=none>We're
just starting to talk to friends and family." "So what is your
company's name so I can watch out for it and pass your info
along to a couple of angels I know." "I can't tell you that,
it'd give it away." Adam's annoying habit of saying, yes
everyone is doing that, but wait until Phase II and Phase III
is, well, annoying. If he doesn't have any differentiators for
Phase I, well, it only goes downhill from there.
6) "No barriers to entry"
So, there's either 20 and counting distributed computing
technology companies or there's no competitors. Which one
is it Adam? Pick the one that's most clueful. What are you
doing different than Popular Power? Is your stuff more
flexible and changeable? If so, where's the application that
really needs to use that? You really should go back and read
Diamtech's Unleashing the Killer App. If you get your
binary differentiators down, the killer app is going to be
the one small, stupid software that exploits them.
7) Risky equity scheme
Take the money. Several small steps go a long way. Adam's
resistance to dilution turns off 100% of investors who he's
trying to convince anyways. If Adam had both a couple of startups,
a successful execution of the dilution scheme he's proposing, and
the financial and technical credentials of a 3 time winner CEO,
he might get some traction. The only reason I can see is that
he's greedy. We have a future plan to do something really
big isn't good enough reason to invest in something no
matter how much you believe or trust in the person. You need to know
what you are investing in and what protections you have.
8) Inability to identify Risks
An assurance that there are no risks is the same as
an assurance that there are no competitors. Completely
bogus. Where are you going to get qualified people?
Are they mercenaries? If they are so dedicated, why
aren't they convinced they want to be part of the company?
Who's your first customer going to be? I.e., the first person
who's going to give you money for your product and how soon
is that going to be? How many times over can you sell that
product to other companies?
So, it looks like Mithral has a hard road to funding ahead
of it without stacking the deck against itself. If Adam will
eventually release any technical details, then maybe we can
evaluate if the business issues are really worth overcoming.
Greg
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