Vlad Mazek – Vladville Blog

Ok, I’ll admit that I chose the title to see if I can give my buddy Scott a heart attack. Don’t worry, this message is not about SPAM and it’s not funny.

The Leave

I’ve been somewhat disconnected from the core OWN businesses for about a week now which has given me some fresh air to contemplate exactly what our next move is and how committed I am to it. In order to tell you where we’re heading, allow me to tell you where we’ve come from.

My Take On Business

My parents are immigrants. The way immigrants make money is simple: “Hey, look at all that money those people gave to those people. How can I get some?” That in a nutshell is how OWN came to existence – I saw how much money people were willing to part with for Internet presence (so I started web hosting) and how when people are sufficiently annoyed by SPAM they will pay to get rid of it (so came ExchangeDefender) and how much it costs when they go down (LiveArchive) and how much people genuinely hate IT costs (so came our hosting/cloud revision in 2007 – for those of you that remember, I called it “The Lucy’s Sail” and outlined what you see today in a few articles on this very blog).

It’s a simple concept – find out where people are successful and find a way to fit in.

But… things have changed my friends.

Things like redundancy, in the words of my latest hire:

“it’s not a good word, it means that something is unneccessarily duplicated – but from reading your material it sounds like it’s a good thing?

Ouch! I think she’s 23. Which is the age of people starting businesses out of college.

Things like redundancy, clustering, failover, etc are a foreign language to them much like things like “legacy” and “Novell” were to me when I was starting my business. No, I was never impressed by someone who bragged about their Lotus 1-2-3 or how heavy their laptop was. Move aside geezer, take your stack of floppies over and let me show you this Internet thing.

That was 1997.

It’s been about 13 years since, I’ve built a multi-million dollar software company and a Ferrari Fund that will likely buy me a new model in every color for as long as I live and am stupid enough to spend money on cars. (P.S. Thank you for all your money!)

Life is good.

But solutions have to evolve.

Now, the complicated part:

Not all things evolve. Some die a horrific extinction.

Our current business – that of selling expensive technology solutions to people who appreciate the old way of doing business (relationships, global redundancy, failover, clustering, commercial licensing, etc) is coming to an end.

I will go on record in saying that I do not believe Microsoft Exchange will be the dominant messaging platform 10 years from now.

So, that leaves a bit of an awkward taste in your mouth when you say it.

It certainly leaves your employees a little uneasy.

But, at the end of the day it has to be said and something has to be done.

If there is one thing I believe…

You can’t ignore threats. Just because it threatens me, doesn’t mean I can ignore it because someone else will go for it. Inevitably, everyone else will go for it.

There is being right. And there is being broke. I’m trying to find the middle 🙂

The Honest Part

Part of me (and part of my company) believes that pursuing Microsoft and Google down the path of platform destruction is dangerous for two reasons: 1) With tight margins, value is destroyed and sacrificed for operational efficiency and 2) Who needs Own Web Now if they can get Own Web Now Lite for the third of the cost?

Both are valid concerns.

Allow me to address them as honestly as I can.

To make things cheap, you sacrifice value. However, the value being sacrificed is clearly something people are not interested in to begin with. The most successful companies on the Internet never publish a phone number. It doesn’t hurt them. So, is a human being that can help you a value or not? I’d argue that it doesn’t matter – if you don’t care about that, you will not pay for it – so it’s not a value after all. There is a long list of awesome and really incredible stuff we do at Own Web Now – but we work with Fortune 500, government, health care, financials and worldwide organizations. What we value will soon not be what the people demand.

There will be attrition if we devalue ourselves. Same response as the above: If people choose a solution with less “features” or “value” then our offering that means our offering didn’t actually have a “value” or “features” worth paying for. It’s a simple supply & demand argument.

What I’d really like to say is..

When competing against yourself, you’re trying to buy stuff you’d sell yourself.

When you look at a competitive offering, the natural fear is that it would cannibalize your revenues and destroy your company.

So there are two options: 1) Do nothing and eventually lose anyhow or 2) Do something and win less.

The math becomes very simple: Run things into the ground or make less money over longer term.

In one scenario, you end up with $0, in the other scenario you end up with something more than $0.

In the meantime, since you are competing with more than yourself only one of those outcomes is certain – the one in which your empire falls.

Bottom Line

I don’t know that Microsoft, Google, Amazon, etc are right.

I don’t know how committed I am to building something that’s not the “best thing, ever”

I do know that I’m not willing to surrender to any of them.

I also know that no matter how high the fear and uncertainty may be, I see my current attitude towards all this in the same way old people look at Facebook. The same way they can’t visualize the world without Quickbooks and the abomination that is a device that doesn’t back itself up every night is perhaps the kind of a tone my new hires get from hearing me.

And in all seriousness, I don’t want to grow up to be a CPA (not that one, I love her) of the technology world that can only offer a solution because of government regulation and clients sense of fear.

It’s time for something new.

Karl has made quite a bit of noise with his $249 / 5 user package and how he’s making money hand over fist. As usual, the devil is in the details but you can sign up for his Cloud Podcast over at www.smbbooks.com and at $5 a month it’s a steal – not to mention that it comes with 17 hours worth of service. Karl has blogged at length about it but this is really where it makes more sense to study than to just push the button.

Here it is in a nutshell:

5 Exchange Mailboxes w/ Antispam, Antiav..

250 GB File Storage

Destkop AV.

Vlad’s Pack:

The Exchange 2010 hosting package from Own Web Now – $10/user. This solution comes with SharePoint 2010. Mailbox, public folders, mail enabled contacts, all of SharePoint goodness.

ExchangeDefender – $0/user. This solution comes with SPAM filtering, antivirus, web filtering, business continuity (1 year worth of archiving powered by Exchange 2010) and so on.

Amazon S3 / Jungledisk – $5/user, $0.16/GB. Gives you a mapped drive on a Windows system tied directly to S3 service.

Note: You can get all the specific pricing and marketing plans, assistance from Own Web Now Corp. Because we don’t sell direct (only to IT Solution Providers) there is a short app but it’s free and just meant as a deterrent so we don’t end up with a law office as a client. 🙂

Let’s total this up, for 5 users and 250 GB of storage: $50 for Exchange, SharePoint, ExchangeDefender, LiveArchive, AV/Antispam, Web Filtering, Web File Sharing. $65 for 5 users of JungleDisk and 250 GB storage.

Total cost: $115. / mo

Total profit: $134. /mo

This price is far less than what people currently charge to manage an SBS server (for example) and the profit margin is higher. Besides, you don’t have to do a thing! Just crank out sales agreements and collect over a grand for it. When they ask for support, pile on more!

As usual, see www.smbbooks.com for more. ABP.

Knowledge is crack, just try it and you’ll be hooked. And you’ll find out how clueless you were beforehand, or how clueless everyone around you is. That’s what’s so wonderful about technology, Internet, etc – it’s possible (given time, effort and actual willingness) to gain expertise at literally anything.

There are so many best practices on how to hire and groom good people that would make your head spin. Unfortunately, they are only good for hiring remedial labor when you’re seeking complacent people that treasure stability, no change or accountability (ie: drones). But most businesses do not grow (or in this climate, survive) with drones. And when you look for more gifted and talented people, the unfortunate circumstance is that smart people know how to manipulate data. Things like DiSC profiles for example, can be easily skewed if you know what the hiring manager is looking for.

To date, I have only found one thing that makes good people stand apart from the army of idiots looking for a paycheck: eagerness to learn.

Literally everyone who ever used to work for Own Web Now is no longer here because they refused or showed no interest in self improvement – from reading long form books that establish expertise down to reading Google. People that wait for direction and expect to be forced/sent to training are usually directed back to the job search.

It sounds harsh, but it’s all about superpowers..

If you’re skilled enough, you get a job.

Just because you got a job doesn’t necessarily mean you get to keep it.

And it certainly doesn’t mean you’ll ever get a raise or move up.

It’s amazing how many people don’t get the above fundamentals of work in the 21st century. Like I recently wrote in the Death of a Services Salesman, the opportunity to hide and slide is only there in the infancy when everyone is trying to figure out how to make it. Once the best practices are established, the only ones that survive are first movers (people who figured it out first and created a very large client base) and the cost leaders (people that can automate and price the solution down to the bare bones)

Where does that leave people in a job?

Well. I sat around with my marketing folks yesterday and we went through the agenda for the next month. Development of superpowers was key. What I mean by that is that things are only apparent and common sense when you study and learn about them.

They are only common sense because you’re aware of them.

The rest of the people have no idea that they are being manipulated, that everything they say and how they say it reveals what they are up to, that they are being coached and guided towards the (mutually) beneficial result.

In 2010 and beyond, I am only looking for people that are looking for more & better. I don’t care what your DiSC, history, education says – because that’s largely irrelevant. A year from now we’ll be doing very different stuff than what we do today and we need people that can get from here to there on their own.

It took over a week to catch up with the comments regarding the “Death of a Services Salesman” blog series. I’m glad so many of you enjoyed it, I got more comments on this and more ad money than ever before. Now I can retire and live in a tent! 🙂

The commentary seemed split between oneliners that I read and long, extended rants that I deleted. Told you I would do that. If you have an opinion or insight that can fill more than a paragraph, honestly, you’re doing yourself and everyone else a disservice by not having a blog of your own.

“Nice Eulogy”

If you saw DoaSS as an eulogy, it probably was. Please turn the lights off on your way out.

On the other hand, we’ve seen this before. Technology (and solution providers) are naturally phased out by technological improvements. But that doesn’t mean that there is a mass extinction event on which everything as you knew it a second ago ceases to exist. Remember that Gmail has been out for 6 years and Microsoft signaled the current state of affairs at least 4 years ago (which leads me to believe that people that thought it was an eulogy didn’t actually read the blog posts but instead just reacted to their own fear of not being able to continue running business as usual)

Quite the contrary, the phase out period is extended – but only the first movers tend to survive. They get to the new market before the rest of the sheep flood it and completely render it impossible to differentiate and compete in.

The faster you accept that things are changing, the faster your company will grow. No, this blog is not meant as an abuse broadcast system (another comment) – it’s meant as a sounding board. I speak to hundreds sometimes thousands of people each week – and I use this blog to voice the insight I get from my interactions to see if I’m only getting a message from a small/vocal biased group or if this is an overall state of industry.

That’s how I know that if you’re sitting around formulating strategies over virtualizing servers in the cloud you’re stuck in 2006. Remember when good ol’ Vlad talked about a $99 SBS box and had thousands of them running? Yeah, good luck selling that today – you’ll find a handful of people with a lot of money and the number of people that consume IT like that is decreasing, not increasing. So by all means, try to run your consulting practice like you did in 2006 – few clients with thousands of dollars to burn on IT. High risk, slow deployments, expensive staff – and the few SMB bloggers that are still around will hopefully speak fondly of you and what a great job you did building the company’s first LAN.

The point of DoaSS is to make you move – quickly. If after reading it you don’t have a sense of urgency, go read it again.