“Big Data” is really (not so big) Data-based story telling

Aircraft Cockpit

I’m me. My key skill is splicing together data from disparate sources into a compelling, graphical and actionable story that prioritises the way(s) to improve a business. When can I start? Eh, Hello, is anyone there??

One characteristic of the IT industry is its penchants for picking snappy sounding themes, usually illustrative of a future perceived need that their customers may wish to aspire to. And to keep buying stuff toward that destination. Two of these terms de rigueur at the moment are “Big Data” and “Analytics”. There are attached to many (vendor) job adverts and (vendor) materials, though many searching for the first green shoots of demand for most commercial organisations. Or at least a leap of faith that their technology will smooth the path to a future quantifiable outcome.

I’m sure there will be applications aplenty in the future. There are plenty of use cases where sensors will start dribbling out what becomes a tidal wave of raw information, be it on you personally, in your mobile handset, in lower energy bluetooth beacons, and indeed plugged into the “On Board Diagnostics Bus” in your car. And aggregated up from there. Or in the rare case that the company has enough data locked down in one place to get some useful insights already, and has the IT hardware to crack the nut.

I often see desired needs for “Hadoop”, but know of few companies who have the hardware to run it, let alone the Java software smarts to MapReduce anything effectively on a business problem with it. If you do press a vendor, you often end up with a use case for “Twitter sentiment analysis” (which, for most B2B and B2C companies, is a small single digit percentage of their customers), or of consolidating and analysing machine generated log files (which is what Splunk does, out of the box).

Historically, the real problem is data sitting in silos and an inability (for a largely non-IT literate user) to do efficient cross tabulations to eek a useful story out. Where they can, the normal result is locking in on a small number of priorities to make a fundamental difference to a business. Fortunately for me, that’s a thread that runs through a lot of the work i’ve done down the years. Usually in an environment where all hell is breaking loose, where everyone is working long hours, and high priority CEO or Customer initiated “fire drill” interruptions are legion. Excel, Text, SQLserver, MySQL or MongoDB resident data – no problem here. A few samples, mostly done using Tableau Desktop Professional:

  1. Mixing a years worth of Complex Quotes data with a Customer Sales database. Finding that one Sales Region was consuming 60% of the teams Cisco Configuration resources, while at the same time selling 10% of the associated products. Digging deeper, finding that one customer was routinely asking our experts to configure their needs, but their purchasing department buying all the products elsewhere. The Account Manager duly equipped to have a discussion and initiate corrective actions. Whichever way that went, we made more money and/or better efficiency.
  2. Joining data from Sales Transactions and from Accounts Receivable Query logs, producing daily updated graphs on Daily Sales Outstanding (DSO) debt for each sales region, by customer, by vendor product, and by invoices in priority order. The target was to reduce DSO from over 60 days to 30; each Internal Sales Manager had the data at their fingertips to prioritise their daily actions for maximum reduction – and to know when key potential icebergs were floating towards key due dates. Along the way, we also identified one customer who had instituted a policy of querying every single invoice, raising our cost to serve and extending DSO artificially. Again, Account Manager equipped to address this.
  3. I was given the Microsoft Business to manage at Metrologie, where we were transacting £1 million per month, not growing, but with 60% of the business through one retail customer, and overall margins of 1%. There are two key things you do in a price war (as learnt when i’d done John Winkler Pricing Strategy Training back in 1992), which need a quick run around customer and per product analyses. Having instituted staff licensing training, we made the appropriate adjustments to our go-to-market based on the Winkler work. Within four months, we were trading at £5 million/month and at the same time, doubled gross margins, without any growth from that largest customer.
  4. In several instances that demonstrated 7/8-figure Software revenue and profit growth, using a model to identify what the key challenges (or reasons for exceptional performance) were in the business. Every product and subscription business has four key components that, mapped over time, expose what is working and what is an area where corrections are needed. You then have the tools to ask the right questions, assign the right priorities and to ensure that the business delivers its objectives. This has worked from my time in DECdirect (0-$100m in 18 months), in Computacenter’s Software Business Units growth from £80-£250m in 3 years, and when asked to manage a team of 4, working with products from 1,072 different vendors (and delivering our profit goals consistently every quarter). In the latter case, our market share in our largest vendor of the 1,072 went from 7% UK share to 21% in 2 years, winning their Worldwide Solution Provider of the Year Award.
  5. Correlating Subscription Data at Demon against the list of people we’d sent Internet trial CDs to, per advertisement. Having found that the inbound phone people were randomly picking the first “this is where I saw the advert” choice on their logging system, we started using different 0800 numbers for each advert placement, and took the readings off the switch instead. Given that, we could track customer acquisition cost per publication, and spot trends; one was that ads in “The Sun” gave nominal low acquisition costs per customer up front, but were very high churn within 3 months. By regularly looking at this data – and feeding results to our external media buyers weekly to help their price negotiations – we managed to keep per retained customer landing costs at £30 each, versus £180 for our main competitor at the time.

I have many other examples. Mostly simple, and not in the same league as Hans Rosling or Edward Tufte examples i’ve seen. That said, the analysis and graphing was largely done out of hours during days filled with more customer focussed and internal management actions – to ensure our customer experience was as simple/consistent as possible, that the personal aspirations of the team members are fulfilled, and that we deliver all our revenue and profit objectives. I’m good at that stuff, too (ask any previous employer or employee).

With that, i’m off writing some Python code to extract some data ready ahead of my Google “Making Sense of Data” course next week. That to extend my 5 years of Tableau Desktop experience with use of some excellent looking Google hosted tools. And to agonise how to get to someone who’ll employ me to help them, without HR dissing my chances of interview airtime for my lack of practical Hadoop or MapR experience.

The related Business and People Management Smarts don’t appear to get onto most “Requirements” sheet. Yet. A savvy Manager is all I need air time with…

a16z brilliance vs the Leaking Bucket

Digital Ocean Logo

When I worked for DEC, I used to have a brass plaque on the wall in front of me that reminded us in the Software Services Division of our three priorities. It said, in order of importance:

  1. Warranty Customers
  2. Presales
  3. Consultancy

Paraphrased, this says: look after your customers before you go anywhere near trying to get new ones. Next, support the rest of the company selling the whole toolbox to solve customer needs (software was typically only 10% of a project sale). Finally, if we’d done those first, only then did we try to make profit for our own unit alone.

The other euphemism we knew was an old American Football one, which describes a now illegal play; that of “smacking the helmet”. That’s the crash helmet of a 30 stone athlete running at you, as anywhere his head ends up heading, the full weight of the body will follow. So, a well aimed deflection early in a move causes a disportionate effect when the rest of what’s behind it follows. And in the IT market, that front end constituency is the software development community – aka “Developers”. Hit that effectively, and you’re in great shape.

In theory, it’s a great time to be a software developer. Hardware, Storage and Network capacity is fairly inexpensive. Tools to build everything from Mobile to Enterprise applications are predominantly open source and available to all. So, a lot of the early decision making for where to site your applications is where you find a cost effective on-ramp – and more often than not, you’ll stick to where you first deploy as your business scales.

When you are a developer, you get to hear about Amazon Web Services (AWS) and their fantastic growth. This a result of their CEO Jeff Bezos telling his staff that they would deploy all their businesses as APIs, and allow other companies to use their spare compute/storage capacity. Spikes in demand necessitate massive over “just in case” provisioning, even though those spikes are few every year and very seasonal. That said, the amount of options on there is now wide and complex, and hence a learning curve before you can price your development hosting cost out. Examples here, but for my needs, it would be circa £80/month.

You also get to hear about Google Compute Engine, which open up Google’s capacity to developers who can write to their own specific APIs; that said, they appear to favour apps that can take advantage of their own unique database and auto scaling features. If you want a price, then there is a web site where you can enter a number of parameters, and it will articulate a dollar cost – which in my case, were not inexpensive. Or you can have a crack at this.

Likewise for Rackspace, who do a lot of work among the startup community, but again who have pricing suited to paying for their excellent support services. Most of which developers don’t actually need while starting to build their systems. Examples here.

Early in my own work, I saw a report from Mike Prettejohn‘s company (Netcraft) about a small New York company called Digital Ocean who were growing like topsy. From 137 machines in Dec 2012 to (at the time of writing this) 54,142 in Feb 2014:

Digital Ocean Server Growth

The main appeal to me (like a lot of developers) is that you can provision a server instance with one of a range of prebuilt Linux configs within 5 minutes. And once it’s up, it’s $10/month for a virtual server instance with 30GB of Flash Storage and 3TB of Network Bandwidth per month. Add a further $2/month to get weekly backups and the ability to take as many snapshots of your system(s) as you feel comfortable. Very simple, predictable and does the job. The words you’re reading here are being served off a Ubuntu Linux Server in Digital Ocean Amsterdam, using a WordPress network I built using one of their available images. DIY, not for everyone, but if you know what you’re doing and you can secure your site, it’s about as cost effective as you can get.

Besides seeing the volume of site growth, I look at the Netcraft Hosting Provider Switching Analysis, which gives an indication of how each provider was both growing or churning its customer base – and if there was churn, where it was going. The thing that struck me were the number of sites that were relocating from AWS and in particular Rackspace over to Digital Ocean. At a time when Rackspace have been giving profit warnings, the numbers were over 4 figures of customer sites per month – some 31,279 sites in a year.

Mention Digital Ocean to Rackspace staff (I know two of them), and the best positioning I have from them is that they have many competitors that keep them up at night. That said, I shake my head and wonder if they’re spending all their time looking at new customer acquisition (bath taps at full bore) while leaving that very large plug out of their bath.

With that, Andreessen Horowitz yesterday put some major VC funding into Digital Ocean. Given they are gobbling market share – and that my gut says it’s heavily developer focussed – I think they are a fantastic bet. I wonder when AWS, Azure and Google will have a comparable offer, and until then, i’m sure progress will continue on the current relentless path. Digital Ocean have been a revelation to me so far.

Well done, a16z. You’ve picked a great team. Again.

The Hard Thing about Hard Things

I pre-ordered the Kindle version of Ben Horowitz’s new book back in January, and it was duly released and appeared on my iPad Mini yesterday morning. Fantastic book, finished it in two sittings.

Ben is co-founder with Marc Andreessen (of Netscape fame) of Venture Capital firm Andreessen-Horowitz, otherwise known in techie circles as A(16)Z. I recall the two companies he ran in his earlier years – Loudcloud and Opsware. At the time, the Divisional Manager of BT Ignite was more interested in a company called Jamcracker, principally because she liked their name. Meanwhile I was being sent in to do technical due diligence on a few potential acquisitions, just before the dot com crash.

While the VC’s feeding ideas were ex-colleagues of the then CEO (Peter Bonfield), the quality was generally shocking; promising scale to hundreds of thousands of users with software written in Visual Basic, or (with the help of Rothschilds) proposing sale of a domain name business back to BT for £70m before finding 2/3 of the customers were referred to them by… BT. That latter one eventually IPO’d for £12 million a couple of years later. Not to mention some hosting businesses, albeit they didn’t know i’d managed to size their server numbers and customer mix per Datacentre – routinely scuppering their slides when they deviated from an exact truth. One I looked at had 14 servers deployed in one very large building; others we monitored had frequent outages (and we knew which end customers were affected each time). But I digress.

Loudcloud and Opsware, unlike most of those companies I was asked to look at, were of the highest quality. Having said that, the impression reading the book is that being the CEO of both operations was quite a job. It sounded like someone running over a field chasing a tractor trailer with tons of cash accelerating away, but pursued at the same time relentlessly by a Combine Harvester. And then finding a lot of running track between the two was littered with tripwire and sinking sand. In both cases, Ben made it to the tractor trailer – just – despite enormous challenges. Very impressive.

I can relate to the story of folks visiting him where two co-founders wanted to share all the decision making in their proposed business. The one thing I learnt indelibly from my “Leadership and Followership” Management Training at Sandhurst was, that in any team setting, however ad-hoc, job #1 was picking one leader that everyone would defer to. So, while we were free to propose any action, the ultimate call was from that one person. And once they’d made that call, it was our job as a team to execute the decision made to the very best of our mutual ability.

There is a lot of truth in Business Books talking about “Peace Time” CEOs (which get written about all the time) and “War Time” CEOs (which rarely get mentioned). The first acknowledgement of the phenomenon i’ve seen outside the excellent writings of Simon Wardley (just wish his knowledge finally made it into book form). This will become key, as the world of Enterprise IT is going to descend into war type conditions for many vendors by this side of 2017.

The other thing that struck a cord was his coverage of hiring “older” folks to positions in a company. I went for 6 months trying to get interviews at the young age of 55, something that proved virtually impossible – this despite a long, successful track record of running large Software and Internet operations for Market Leading companies and always delivering my numbers. And of developing my employees, many of whom became regarded as “fast track talent”.

Ben reminds people that the chief advantage is “time”; while some tasks like engineering can be internally focussed, that there are several things that relationship networks and business building skills in an older candidate can deliver that truly make a difference between success and liquidation. So while HR and Management ageism is endemic (and it’s not controversial in any way to suggest that – it is a fact of life), it’s my job to point out areas where I can help any organisation. There are some excellent examples of techniques taught in Andy Bounds fantastic book The Jelly Effect: How to Make Your Communication Stick that should make a material effort to that effort.

In the meantime, Ben Horowitz has written a fantastic book. Very recommended.

Bill Gates, Compaq Plus and some new thing called Windows

Apple Lisa MouseMicrosoft MouseVisiCorp VisiOn Mouse

Back in 1983, I worked in Digital’s UK PC Dealer Team, where I was the sole presales technical guy helping to grow Rainbow PC sales through the PC Dealer Channel. Around 120 independent dealers, many of whom had a background in selling Commodore, Apple and miscellaneous CP/M based machines to consumers and businesses. As the second largest computer manufacturer in the world, everyone (including ourselves) expected the PC market to become an IBM vs DEC battle ground.

We had seen the launch of the Apple Lisa, a machine that scared everybody. While most of the vendors saw the windowing system and thought Apple would eat us alive, consumers got equally scared of the $10,000 price tag. However, it set in train an arms race to provide an equivalent for other PC vendors.

The authors of Visicalc (the first and most popular spreadsheet) started engineering a Windowing system called “Visi-On”, another called Quarterdeck a system called “DesQ” that could work out of the box with existing applications, and there was a rumoured response on the way from Microsoft.

In May, we had a visit from Phil Sutcliffe and his US CEO, Bill Gates, who carried in a Compaq Plus (IBM compatible as large and heavy as a portable sewing machine) and set it up to give a demo to around 20 of us around a conference room table. Two of the DEC VIPs were stuck in a board meeting upstairs, so we all sat around the table like lemons, waiting for their arrival, Gates included. I couldn’t help myself, so I turned to him and said: “I notice you have two buttons on your Mouse there. The Apple Lisa has one, and the Visi-On mouse has three. I’m curious, why did Microsoft pick two?”.

With that, he spent a good ten minutes relating a thorough drains up of his thought process, which included many examples of areas that really sucked when using both the Lisa and in VisiOn. Extremely thorough, well thought through, and left an impression of “Wow”. The sort you walk away with if you ever meet someone who turns into a walking encyclopedia.

When the VIPs arrived, the first thing he said as he shook their hand was “When are you going to drop CP/M and move to DOS?”. A reference to Digitals then preferred OS, given it already ran thousands of applications and was an on-ramp to Concurrent CP/M, which allowed you to hop and skip between 5 running full-screen applications. That done, he then gave a demo of a new product called “Windows” that Microsoft were at that point building.

He left with some degree of frustration at not persuading the senior folks to switch immediately. Phil told me afterwards that when he got back to David Fraser, then Microsoft UK General Manager, he told him “There was only one guy in that room who knew what he was talking about – hire him”. At the time, there were few UK employees – about 10 or so if I recall. I was duly invited for interview, spoke to David Fraser and International VP Scott Oki, but ended up declining the move.

The one thing that’s always struck me ever since is how asking a good question often has a much bigger impact than knowing the answers. It’s usually a sign of good management if staff are aimed at audacious goals, and questioned about detail rather than having it prescribed to them.

About 4 weeks in after I was first handed DECdirect Software to start, I got invited to a chat with Peter Herke – the General Manager of the DECdirect Catalogue operation at that point. He had a reputation of chewing out senior people who didn’t know every detail of the business they are running (in fact, for junior people, he just asks a few pointed questions and asked them to come back with the answers when they were to hand – people learnt to keep the finger on the pulse very quickly).

I spent the whole evening before thoroughly remembering every statistic and every detail of the emergent business, from helicopter view to the smallest thing. When I got to his office, I sat down, he closed the door and just said “Are you enjoying it so far?”. That completely threw me. I recall saying “Well, it feels like i’m sitting in an aircraft cockpit, and I can see all the dials moving. I’m at the stage of watching them all, trying to work out which are the important ones”. I then took him through what I was doing, what the challenges were and how I was addressing them. At the end, he asked when I was expecting to launch to the outside world, and told me that it was my call, and not to do it until it felt right. To me. He just wanted me to have $35 million revenue in the bag 11 months later, and apart from that, it was my ship to pilot. And to ask him for help and advice if I needed it along the way.

Big team effort (8 telesellers I shared, 2 tech support, 1 logistics person and me), but we launched 3 months later, flew past the $35 million target well ahead of fiscal end of year, and in fact hit $100m within 18 months – at over 89% gross margin.

Just goes to show what people can achieve if given the latitude to grow, and just having good questions asked of them to help them steer themselves along the way. I’ve treated every employee i’ve had since like that – and have been proud of the results every time.