I’ve said from day-one; “my job is to make myself irrelevant“, but that has proved tougher then I originally thought.

I’ve spent the last week away on vacation; as detached as my iPhone will allow me to get. Being out of the loop on the day-to-day team dialog and hands-on involvement has really given me a better appreciation and perspective of our office and our team’s capabilities. It’s reassured me that it’s OK to let go, bruised knees are just part of the learning process.

Owners of small businesses wear many hats but others need to try on those hats from time to time if you plan on growing as a company. Take for instance the sales process. For the last 7 years this has been part of my domain. I have a very established way of doing things which has worked very well for ME and Imulus. I was reluctant about leaving the sales process up to the rest of our office while I was gone. I believed I hadn’t trained them enough; I didn’t give them the necessary time with the training wheels on.

Thankfully with the lead of our Project Manager Stephanie, the office strongly pushed back on the notion they weren’t up to the task. I tucked away my fears and took a seat in the back. Over the next few days I watched the dialog between us and two perspective clients. I was impressed by what I learned. They deeply engaged with the prospects, were exceedingly quick to respond and thorough beyond my standards. Not only did they live up to the task but they taught me what I needed to do to improve my sales process.

I emphasize process because this term gets a bad rap, yet it’s critical to running a successful company. I think it’s important to stress a key principal at Imulus before I continue. We don’t grow for the sake of growing; to maximize profits; or to add extra personal to drum up our size. Nope, we’re not that shallow. Instead our growth is aimed at creating a better company. One that is enjoyable to work at, for and with. Everytime we add someone it’s because we want greater specialization and expertise. Process gives us constraints and structures to be creative within; as opposed stifling creativity.

My tip
Step away from the office and watch your team work. Take notes, refine and re-implement your process. The key is to let your team drive the company’s process rather then just the owner(s). Look at your process as the joint brain trust of the kick-ass people you’ve hired. Have the faith and confidence in your team. It will go a long way to improving your small business.

Last week we were recognized as the 20th Fastest Growing Small Business (sub $2 mil in revenue) by the Mercury 100 for Boulder & Broomfield Counties here in Colorado. On the surface this might seem like a great accomplishment, however it’s a false measure of success, and I’ll tell you why.

• The Mercury 100 just looks at Boulder / Broomfield County. Not Denver or the rest of the state. Colorado is loaded with great startup companies. Sure, Boulder & Broomfield are a hotbed of entrepreneurial activity, yet sizing yourself up against a small group isn’t a true validation of efforts.
• You have to apply to be in the Mercury 100. Who knows for certain how many small business out there have not submitted their information. Clearly if you’ve found wild success in a business model why, other then selling the business or gaining investor dollars, would you feel the need to tell others?
• The growth is skewed as a startup. It’s not difficult to show 500% growth when your first year consisted of the 3 months in ‘06 followed by a ramp up in ‘07 and sustained business in ‘08.
• Revenue growth doesn’t equal profitability. While our revenue has grown over the last few years our most profitable year was ‘06. Arguably we’ve become less efficient as a business, and that is certainly not a measure of success.

So why are we rewarding pure revenue growth?

Don’t get me wrong, I like the recognition we receive for things like this. I just want to stress to other business owners that measuring success by pure revenue growth clearly isn’t the best option.

Unlike the technology analysts, I’m not paid to see the future. In fact, I’m not big on predicting what’s going to happen, but in this case, I have a strong feeling. Here’s how I see it in Jan 2009:

• The US economy has tanked
• The WW economies are tanking
• The software sector (technology) is changing
• The enterprise software vendors are way down
• IT depts are shrinking – people & costs

Lately, I’ve spent a lot of time researching Cloud applications, cloud stacks, and 3rd party cloud add-ons. Salesforce.com is a well know story, but the seismic shift is how that platform has been “genericized” and built out to become Force.com. Also, look at Amazon’s EC2 and Google Apps/Code/Engine. This is truly revolutionizing application development and thus will revolutionize IT across every industry vertical. This is not about SMB, this is about companies small to very large. Companies with 10 to 10,000’s of employees. You don’t have to be a ‘digital native’ to get this.

I will also add this isn’t about social networking. As these business applications develop, yes, they will have integration points into LinkedIn, etc. But it will be about providing value to the business, not about over-communicating with your virtual friends.

A whole new breed of software is being developed for the cloud applications and platforms. New types of monitoring solutions, new types of middleware, new tools, etc. In many cases, systems and security mgmt is being re-invented, as cloud-native. It’s exciting to see.

Where is this going? I predict that the enterprise software vendors will get slaughtered this year. Many will survive, but they will look very different when the economy does start to pick up. Given that companies and IT depts are shrinking now, I predict that when the economic clouds pass, the software clouds will roll in. When companies do start spending again, they will choose cloud applications for their new application needs. They won’t have the people or the budget to go back to an “old style” enterprise application, plus, they’ll find what they need on the market, on demand, and at a low $xx/user/month cost.

I’m not saying the world will abandon enterprise software and make a wholesale shift to cloud applications. Over the last decade, companies have collectively spent billions of dollars on SAP, Oracle, etc., so integration into these “legacy” apps will be important for more than a decade. What I’m saying is that the recession/depression will lead to a massive jump in cloud application adoption. I could be wrong, but I see the writing on the cloud….

About the author: Greg Davoll is an independent consultant specializing in software marketing and product strategy. Greg has over nineteen years of enterprise software experience across an array of branded technology companies including IBM, NetIQ, Sybase, BMC Software and Embarcadero Technologies. Learn more at http://www.linkedin.com/in/gregdavoll or contact Greg at greg.davoll@gmail.com.

Over the past few years the landscape of home entertainment has been changing. As broadband internet access has found its way into households across the country the utilization of on-demand content is becoming commonplace.

Netflix, who we’ve criticized before and been pleasantly surprised by their response, has been really on top of capturing this next generation of home entertainment. In fact, it seems like they’ve secretly been waiting for this moment since the incarnation of their brand “Internet Flicks”.

When I first heard of Netflix I was in early high school, my friend’s parents had just signed up for this new service that delivered movies via mail. I was confused, how in the world did the name Netflix really correspond to mail delivery movies? Further, was it really worth waiting two days to get a movie when you could go to a local store and get it in 30 minutes? Well, as they say, the proof was in the pudding. As the internet boomed in the early 2000’s Netflix became a real time rival to those other rental services such as broke-ass-buster Blockbuster and Hollywood Video.

However, it wasn’t until this past year that I really started to respect Netflix as a company with vision. In fact, I find it almost creepy how well they’ve positioned themselves in today’s current home entertainment market.

I imagine the idea of on-demand content has to be terrifying to most rental services. With pay-per-view, Hulu, torrenting, and iTunes the idea of brick and mortar rental is on the way out. And while DVD mail delivery isn’t quite as dead as store rental it definitely has a limited lifespan.

Here’s where Netflix is different from a lot of companies. They recognized their business model was dying and instead of whining about it they acted. They didn’t whine about liscensing costs, they didn’t worry about not having a media center product. Instead they took their vision and started working. Giving their customers an opportunity to watch movies instantly on their PC’s for free. Hear that? I said FREE. By not expecting immediate returns on their investment they captured a substantial portion of the online steaming market share and the buzz around it.

It comes down to this. How many people would have been willing to pay an extra $10 a month to try online movie streaming? Maybe a few. How many were willing to try it for free? Everybody.

Netflix, whose name now seems surprisingly perfect for their service, is suddenly a leader in the online delivery world. Since they started delivering online content they’ve cut deals with a number of home media center device manufactures. Including Roku, a few Blu-ray players, and Microsoft’s Xbox. Further, they’ve bundled their online delivery with their plans at no additional cost (I imagine they make up some money by not having to use as much postage) and they’ve started adding HD quality (720p) content.

In essence, Netflix lined up their challenges, picked up a bat, and started knocking them out of the park one by one.

Now granted the battle for next generation content delivery isn’t over, but it seems clear that Netflix isn’t holding the losing hand. They’ve played their cards perfectly up to here and I can happily say that I’m a user of their service and it rocks.

We did it back in 2002, but here is how we’d do it again in 2008 on a shoe-string, bootstrap or sandal-thong budget.

Let’s assume you are starting a company because you’ve either been laid-off, had it with the boss or decided to pursue your dreams. My guess if you are like most Americans then you likely won’t be able to give more then $1,000 to the cause. Let’s be real, you are likely not going to receive a bank loan anytime soon.

1st.
Pick a company name and register your business with your State’s Secretary of State. I’d recommend using LegalZoom to setup an LLC, especially if you have business partners. The LLC let’s you get up and running quickly with minimal costs. As your business matures, then decide if another corporate suffix is better for you. You’ll be able to afford fancy lawyers at that point.

Cost $149

2nd.
Find a domain name. Good luck with this one! It’s the main reason why you see so many companies with funky, misspelled names these days. If you aren’t the most creative person use a services like NameBoy to toss around word variations. Once you find one which works, register it on GoDaddy.

Sure I’ve ranted about GoDaddy in the past but their service is still pretty darn good.

Cost $20

3rd.
Buy a Synology NAS with two 1TB internal drives. If there is only one thing I would suggest you spend money on, it’s this. The Synology NAS will give you RAIDed network file storage which can be shared with other co-workers as your company grows. It’s especially nice because the Synology NAS allows for FTP services for those co-workers which are connecting to you remotely. I’m figuring you haven’t closed on that fancy first office just yet.

Bonus: Synology can run FTP, SSH, DDNS and Apache so you can use it to run your web site while you start figuring out your business plan.

Cost $550

4th.
Using GoDaddy as your DNS server, point your email hosting to Google Apps and run your domain name using GMail. You’ll get a free email service which kick the crap out of spammers.

Google Apps also contains Google Docs and Spreadsheets but there is just something nice about having files on your a Synology NAS as opposed to in Google. Once Google develops a way for me to download a backup of the data then I might reconsider this.

Cost $0

5th.
Download and install OpenOffice. I don’t care if you are running Mac, PC or Linux. The OpenOffice team deserves a lot of respect for building a kick-ass free alternative to Microsoft Office and this desktop download won’t disappoint. It will allow you to create spreadsheets, word docs, presentations, drawings and simple databases. You might even consider keeping it as you grow.

Cost $0

6th.
Setup chat, AIM, Skype and any other of the plethora of instant messaging tools. This will help you resist the need to purchase land-lines from the blood-sucking telcos.

Cost $0

7th.
Setup YouMail. This service will give your cell phone some class. I’m guessing it’s going to play double duty between your home life and your new business identity. YouMail takes your cell phone voicemails and emails them to you as MP3s. It also let’s you personalize the voicemail greetings so you can filter the call for a more professional greeting depending on which client or prospect is calling in. Goodbye generic voicemail messages!

Cost $0

8th.
Purchase a real accounting package like Quickbooks. Yes, I know there are tools like BlinkSale and others which you can generate invoices with, but Quickbooks is time-tested and at the end of the year your accountant will thank you.

Cost $180

9th.
Lastly, use BaseCamp to setup a collaborative environment between your internal team and your customers. BaseCamp is free to manage your first project on, after that you’ll have to pay a minimal fee to add more projects and features.

Cost $0 (at first)

There, that’s it! This is how we’d do it again in 2008. The combination of these tools and services will give your new start-up the legs it needs to move forward as well as a polished image which will hide the fact that you are poaching wireless internet and working in a nearby coffee shop.

Good luck and don’t let this shitty economy get you down!