The Keene View on Web 2.0, Ajax and SaaS

While startups always make a big deal about introducing new products, the real birth of a company comes not when you launch your first product but when you land your first big customer.

Here's the difference: it only takes a demo to launch a product, it takes a business model to land a customer. Thus the scariest time in a startup's lifecycle is the period between shipping the product and closing the first big customer deal (this is period that the VCs call "proving that the dogs will eat the dog food").

In true ClueTrain Manifesto fashion, product launches are largely a vendor driven activity, that is to say mostly wishful thinking and hand waving about your new, improved, bright shiny thing. Getting a customer to dig deep and pony up 7 figures for your bright shiny thing puts you in a whole different league.

Launching answers the following questions:

1. Can we give a good 5 minute demo? Silicon Valley is littered with technology in search of a market.
2. Can we sound like we know who might want to buy this in the abstract?

Landing a big customer answers much more interesting questions:

1. Is my product solid enough for somebody else to bet their job on?
2. Does my product solve such a big problem for that person that they are willing to bypass much more established, safer vendors to bet on an unknown startup?
3. Is my business model credible enough that another company will bet their business on our being around 5 years from now?

WaveMaker launched our visual Ajax development tool in February. Yesterday, WaveMaker announced a 7 figure deal with KANA. KANA sells customer service software and has over 700 customers, including 60% of the Fortune 100. They are also one of 16 strategic partners of IBM's WebSphere division.

The most exciting element of this deal is that KANA will ship the WaveMaker Studio as a built-in customization tool for their call center platform (similar to what the Force.com platform does for SalesForce.com). For WaveMaker, this will give us 700 licensed customers by the end of the year, putting WaveMaker in the top tier of Ajax tool providers in one fell swoop.

Cool technology and $2.50 will buy you a latte at Starbucks. Having a $70M company bet their future on your product puts you into the running for the Next Big Thing! Congratulations to the whole WaveMaker team for taking the step from demoware to solving hard customer problems.

Labels: Cluetrain, KANA, startup, WaveMaker

Every software vendor dreams of having a vibrant user community to provide input, buzz and maybe even someday help make money! When I joined ActiveGrid six months ago, the user community on SourceForge was dead, with one to two posting per day. Now the community has over 15 posts a day, a more than ten-fold increase in less than six months.

This describes the steps we took to go from zero to somebody in the enterprise tools forum world. ActiveGrid is a visual tool for building web apps, sort of an MS Access for the Web. Our success as a tool is closely tied to the strength of our community.

1. Crown a community czar

Taking care of the community had been an ad hoc activity at ActiveGrid. As usual, whenever something is everybody’s job, it ends up at the end of everybody’s todo list.

The most important step we took to kick-start our community was to assign a full-time employee to manage the health and well-being of the community. The skills required for success include good technical and writing abilities combined with a genuine interest in open source communities.

2. Put all your eggs in one basket and watch that basket!

For historical reasons, ActiveGrid had several different forums. There was even an abandoned community started by an ActiveGrid fan. It was thriving, but only because spammers had loaded all the forums with postings that were off topic to say the least. It took over a month to get all the forum traffic funneled into just one community board.

3. Use best of breed forum tools

We found that the ActiveGrid SourceForge forums were hard to navigate and didn’t allow attachments. Our community czar moved the community to Drupal and rehosted it at dev.activegrid.com. The new Drupal site helped make it easier to post content, helping to drive a flood of new posts. In addition, the Drupal forum software handles attachments and graphics, making it much more valuable for sharing information.

4. Connect with your base

The first thing our community czar did was to reach out to the people who were actively posting (even though many of their postings had to do with how un-loved they were feeling). He contacted them directly through email and built personal relationships with what we called the “Fab 4” – the top 4 posters who became the foundation for the rebirth of our community. One important lesson is that a small core of active posters is the soul of a healthy community.

5. Turn off the spin

At the risk of sounding cluetrain manifesto-ish, we made an early decision to err on the side of transparency in communicating with our community. We admitted that we had been lax in our support of the community and asked for their help. We also kept the community strictly separate from the commercial side of the house. Using community to flog commercial ideas will go nowhere. It’s like the joke about why you shouldn’t teach a pig to whistle – it doesn’t work and it annoys the pig.

6. Coddle early adopters

In a new community, one active poster is worth 1,000 lurkers. Given this, anything you can do to help incubate people with the gift of gab is worthwhile. We gave away ipods, bought lunches, but most importantly built personal relationships with our community champions.

7. Foster healthy competition

Each posting at dev.activegrid.com earns the poster points, that aren’t redeemable in any way except in our rankings. Anyone in the community who wants to be seen by their peers as an ActiveGrid expert has to work pretty hard just to stay at the top of the rankings.

8. Find work for your users

Many of the posters in the ActiveGrid community are consultants. Every chance we get, we put our corporate customers in touch with community experts. This is classic win-win – our customers get their jobs done and our community champions have even more reasons to be enthusiastic about our products.

9. Take your lumps

Not all postings are positive. Not all community members are polite. Having a community manager actively working to address issues as they arise has proven the most effective way of keeping the overall tone of the community constructive.

10. Explore the boundaries

We are now at the fun stage in working with the community, where we are exploring the boundaries of what you can do with a passionate and committed group of people, all of whom are focused on helping you deliver a great product to market.

For example, the community has provided invaluable beta testing on our last three releases. Top community members have also had one-on-one meetings with our engineering team to help us engineer our next generation product. On the business side, we have asked the community for help in devising our pricing and licensing.

We have not yet fully tapped the potential of the community, but have absolutely turned the community into a powerful driver of momentum. It has been extraordinary how quickly the gains in the community have been reflected by increased business activity and enthusiasm among our commercial customers. Success is infectious!

Labels: ActiveGrid, Cluetrain, Community, social media, Web 2.0