Kellblog

> they can’t turn a profit, and for any hope to turn profit they need this continual growth at a loss, and at some point the investors dump the bag on the public getting a return in a bubble they created and let the public fund the losses. Could you provide some data to show that companies which, at IPO, have any cumulative loss or a very large cumulative loss (as a percentage of valuation or offering size), perform worse as investments or as going concerns? From your other comments, it seems like the foundation of your proposed change is that going public with significant losses is an attempt to get less-sophisticated investors to compensate more-sophisticated investors. While there are many arguments against your proposed change, the first step seems to be establishing that the problem you’re trying to solve actually exists. I’m not convinced that it does (but don’t have data either way - that’s just anecdotal), and in fact many - maybe most - institutional investors in private companies continue to hold post-IPO shares long after the lockup (and gradually sell over 1-3 years simply to diversify). As you investigate this, it might be worth reading about the “CAC payback period” and how it can lead to significant upfront losses: https://baremetrics.com/academy/cac-payback-period, https://kellblog.com/2016/03/17/cac-payback-period-the-most-misunderst…

Not that much controversy over that. HHS said most of the same this morning...I (and many folks) disagree with the premise that MarkLogic had anything to do with it. If the exact same processes and analysis were applied to a LAMP stack or an Oracle Exa-stack, the results would have likely been the same. I think the public news about the firewall sizing (4G instead of 50G) supports my claim. So far, there have been two contractors that have been changed out - QSSI took over from CGI to lead rebuild and, recently, Terramark to be replaced by HP. Maybe this has absolutely nothing to do with not being familiar with MarkLogic. http://kellblog.com/2013/12/01/the-pillorying-of-marklogic-why-selling… There was a healthcare exchange built 100% on Oracle in Oregon (Oracle team, Oracle packaged software including Siebel, Peoplesoft, IDM, Oracle integration SW + people,Oracle infrastructure, Oracle hosting). It's not going particularly well. I don't think familiarity of technology has one thing to do with it. I do think that MarkLogic's ability to be agile - programming (EasyApp), infrastructure (speed of transition) and performance - have a great deal to do with the speed of the team being able to deal with the software bugs above MarkLogic and the weak infrastructure around us. (For those joining this conversation in progress, I'm a product manager at MarkLogic - I'm in charge of infrastructure like storage, performance…

A good article, but the thing I liked most about it was following the link to discover Dave Kellogg's superb blog post, Why Palantir Makes My Head Hurt: http://kellblog.com/2011/06/27/why-palantir-makes-my-head-hurt/ which, among many other points written up in an entertaining manner, gives the better summary of how investors look at the difference between service and product companies: >That last point [about whether Panatir sends in consultants or research engineers to its clients operations] is important. Why? > - If field technical staff are engineers, then the associated revenue is presumably license fees and the cost is R&D. > - If field technical staff are consultants, then the associated revenue is services and the cost is COGS. >Why does this matter? Because most software company boards and investors see the world in a pretty black-and-white way: > - License revenue is good. Services revenue is bad. (Largely because gross margins run 98% on the former and 20-30% on the latter). > - R&D expense is investment and ergo good. Cost of goods sold is bad. >Almost all Silicon Valley boards will want an emerging enterprise software company to run with a consulting business that’s no more than about 20% of total sales. In practice this means a company can have at most about 1.5 consultants (pre- and post-sales) per salesperson. Any work that can’t be done either as R&D investment or by that small consulting team needs to get handed off to partners. So, do…

- The lower-level the category the more customers want support on it. - The more you can commoditize the layers below you, the more the market likes it. Red Hat does this for servers. - The lower-level the category the more the market actually “wants” it standardized in order to minimize entropy. This is why low-level infrastructure categories become natural monopolies or oligopolies. source: https://kellblog.com/2014/11/18/it-aint-easy-making-money-in-open-sour…

As well as Red Hat has done, they are dwarfed by many other companies. This post about open source compressing the market size by 10x made a lot of sense, and was also a little depressing. http://kellblog.com/2014/11/18/it-aint-easy-making-money-in-open-sourc…

You can take a look at "Insight Ventures Periodic Tables of SaaS Sales and Marketing Metrics" [1]. - [1] http://kellblog.com/2014/01/21/insight-ventures-periodic-tables-of-saa…

There was useful high-level content in this video, but anyone who is serious about building for the enterprise should definitely study other enterprise SaaS companies. Box's financials, on the surface, are comparatively unimpressive and some of them even raise questions about the company's long-term viability[1][2]. Some folks argue that Box is in better shape than it might appear to be in[3], but this is based on assumptions which may or may not prove to be valid[4]. [1] http://kellblog.com/2014/03/27/burn-baby-burn-a-look-at-the-box-s-1/ [2] http://tomtunguz.com/box-ipo/ [3] http://www.businessinsider.com/heres-why-boxs-aaron-levie-is-a-genius-… [4] http://kellblog.com/2014/05/15/the-box-s-1-delayed-ipo-and-the-genius-…

Some incisive analysis here: http://kellblog.com/2011/06/27/why-palantir-makes-my-head-hurt/

Their main products are oriented towards integrating structured and unstructured data from lots of different data sources: http://en.wikipedia.org/wiki/Palantir_Technologies#Palantir_Government Other articles on the company make it more clear that the reason why they need so many "forward-deployed engineers" are because they heavily customize the installed software for each customer, i.e. you have to do a lot of custom work pulling data out of Proprietary Customer Database X to feed it into the system (and back out). See "Why Palantir Makes My Head Hurt" http://kellblog.com/2011/06/27/why-palantir-makes-my-head-hurt/

Don't believe the reviews. I was considering a position there, and did some research into the company culture (because everything else about them just seemed impossibly awesome, with the exception of pay). Apparently, they had a fairly low review rating about a year ago which was hurting recruiting efforts, so company leadership "asked" employees to write reviews and a bunch of 5-star reviews popped out in a very short period of time. They all sound like PR copy, all cut from the same mold, and the "cons" of the company aren't really negatives but disguised positives. If you click on the "rating trends" next to the overall star rating you'll see when this happened. Totally creepy and a bit cult-ish if you ask me. Some of the other reviewers actually called them out about this, but since they're an "engaged employer" on Glassdoor, it appears those reviews are getting buried in favor of the ghost-written ones. You can still find them fairly easily though because they'll have 20-50x more helpful tags than the kool-aid reviews. Turned me off completely to them, and makes me think there are some serious issues going on underneath the surface. I also found this blog post written a while back about their business model which I found quite enlightening: http://kellblog.com/2011/06/27/why-palantir-makes-my-head-hurt/ It's a little dated, but I think he hits the nail on the head in a few places.