SiliconGrassland.com

Last week our district SBA held the awards banquet for National Small Business Week, and I was given the South Dakota Young Entrepreneur of the Year award – what an honor! Obviously this has been a really thrilling experience, and one I really didn’t expect. I’ve received so many encouraging notes in the past few weeks, thanks for your kind words!

Mom & Dad, me, and the award...

For those of you who know me well, in my short career I have had serious ups and downs. Learning to run a business young in life is very difficult, and the experience has humbled and challenged me deeply. At times it has rattled me to my breaking point, and at other times I have felt the sweetness of conquering a challenging endeavor. Today is one of the screaming fun days!

I’m also aware of the source of any talent and wisdom I have been given. Deuteronomy 8:18 sums up how I feel:

But remember the LORD your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your forefathers, as it is today.

I’m not wealthy (we’re still in startup mode!), but I’m well aware of all that I have been given, and for that I’m thankful.

There have also been people in my life who have invested in me and shared of themselves. I want to acknowledge and thank some of the people who have helped me along the way.

First, my parents and family have been there through thick and thin. Dad allowed me to start my first company, Vetter Solutions (which later turned into DataSync), in our basement. He later helped fund DataSync before any investors would look at the company. Mom has always been supportive of me, and was there to encourage me when times were tough. The rest of the family encouraged me no matter what happened.

The team at DataSync has been relentless in working through the good times and bad. Startups are not easy, and there have been plenty of chances for them to find an easier job that pays more. I especially want to thank Michael Moser. That guy has put up with me for 5 years or more through countless strategy evolutions.

I’ve been fortunate to gain the wisdom of advisers and directors who are far more advanced than I am in business. They have helped guide me and have taken time to help me grow. Some of those people are Craig Anderson, John Hemmingstad, Rich Naser, Mari Beth Baumberger, Byron Schafersman, Colin White, John Sutton, Eugene McCord, Cris Friewald, Joe Galinanes, Todd Gagne, Will Bushee, John Brown, Paul Ten Haken, Tom Halverson and so many others (I know I’ve missed a lot of you!).

Last (but not least!), my friends have kept me grounded and stable through the jungle that is entrepreneurship. In the hard times they have encouraged me, in the good times they have helped keep my ego in check, and they have always been there to listen and offer insight. I won’t mention them by name here (for privacy reasons), but you know who you are!

In all the hubris of life, I’ve realized that “this too shall pass”. DataSync still has a steep hill to climb, and awards don’t make that easier. Another deserving person win this award next year, and I will be all but forgotten. But that is ok, I’m not doing this to win awards, but to do something worthwhile. But this is real and I’ll never forget this recognition. Thank you to everyone who has helped me along the way!

Businesses everywhere are feeling the budget crunch as our economy continues to struggle for recovery. Many organizations are moving to across the board cuts, requiring IT spending reduction. This reality is causing IT managers to ask the tough questions on how to deliver the same or better services at a lower cost.

The good news is that as technology has evolved, it has become less expensive. There are new business IT alternatives that can your organization substantially without reducing service or feature quality. I’ve outlined some specific options you can consider to add value to your business IT system while reducing your budget.

Spend less on equipment

• Instead of purchasing expensive business laptop or desktop computers, get your employees ‘netbooks’. Netbooks are small portable laptops that will run most standard office software and cost less than $300.
• If you have to buy classic computer equipment, focus on matching the need for performance with the computer you buy. Most users don’t need a fast processor and lots of RAM, and won’t need this for the foreseeable future.
• Don’t buy servers, use online software instead. Some specific examples are included below.

Consider replacing desktop/server software with online (web based) software.

• Replace your file server with a online storage product like box.net, which is a fraction of the cost of an onsite server.Instead of running an onsite Microsoft Exchange server, consider a hosted email service such as Gmail, Zimbra or HyperOffice. The average firm saves 70%.
• Use Quickbooks Online instead of the desktop edition. Pricing starts at free, and doesn’t require any servers, backups or complicated remote access tools.
• Replace Microsoft Office (which retails for $270 per PC) with OpenOffice, Google Docs, or Zoho. Most options are free or cost little.
• Replace expensive Customer Relationship Management (CRM) software (such as Seibel or SalesForce.com) with less expensive solutions such as SugarCRM.

Upgrades are an option, not a requirement

Most businesses have a 3 year replacement requirement on all hardware and software. The reality is that this often isn’t necessary or prudent for many businesses:

• Windows XP has worked fine for many businesses, and requires less resources than the newer versions.
• Hardware is now built better and lasts longer (a 5 year replacement cycle is now standard for many businesses).
• Applications that serve basic business needs can be used for a long time on a current version, or they can be moved to an online alternative.

Smart IT managers consider each service, the requirement of that service, then determine the required upgrade cycle. Across the board upgrades on a rigid timeframe cost more.

The bottom line is that by evaluating your requirements against new technology, you can save significant amounts. The traditional client/server computer setup of many businesses is being replaced by flexible online systems that cost less, are much more reliable, and can be scaled up and down as your business changes. Before spending, ask the tough questions and do some research, and you’ll fine that a better alternative awaits you.

Well, we’ve worked hard and have pulled off another one. Today we announced that DataSync has finished our first round of investing with $1.2 million in venture capital. Not bad for a company from ’silicon grassland’. To top off our big day, we also announced that we have entered into a strategic partnership with SugarCRM to offer fully supported solutions to small businesses for an attractive price.

Personally, this journey has grown my faith, my drive, and my belief in hard work. Without a solid grounding in my faith I would have bailed out. Building a company like this is tough, and this journey has cemented my belief that God brings us through challenges to grow our faith and make us more effective people.

I would first like to thank the employees, investors, and customers who made this whole thing possible. It’s been challenging to make it this far. We have encountered roadblocks we didn’t even know existed, let alone how to overcome them. But we have. No one has built a business model like ours before. Delivering cloud based, integrated, small business solutions is new. Plain and simple. Furthermore, we’re out here in the midwest, far away from the built-in connections many comparison companies have in Silicon Valley. It’s taken a long time for anyone to give us the time of day outside of the area. So we’ve had to discover our own path. Fortunately, that isolation has broken. People in the valley know who we are. I’ve had the privileged of holding meetings with some of finest executives and journalists in the industry. We have worked very hard to earn that respect – something I count a blessing. We didn’t raise $10 million in startup capital, start with an experienced executive team, or try a slam-dunk business plan. But we’re innovating, and we are conquering obstacles. It’s a really cool feeling.

This blog has been quiet for the past couple of months, and the reason is above. Sometimes it’s a bit maddening running a privately held company because I can’t talk about all the cool stuff we have cooking. But it’s really awesome to be able to come out and talk about things. We’re very excited about the future of this company and the customers we can help. It is very fulfilling to work on a project that is helping people. We are finishing some compelling case studies about real organizations that have been enabled through using DataSync. We are solving real problems and helping customers win with what we’ve worked to hard to create.

This week I realized that I recently hit my 5 year mark working in the technology world. It’s been an interesting 5 years, and a lot have things have changed. Here’s a quick summary of my journey and were I’m at today.

Where I started…

My journey in technology started in high school repairing home PC’s and doing some basic business computer networking. I quickly figured out that communicating with the people I served was very important. Most of the time us techies fix things that no one has problems with, and create issues where they don’t exist.

I later worked at a bank software company for a few months and learned a lot about how software is built. This taught me how important software design and architecture was for the long-term viability of the company. Small changes in design had a major impact on operations down the road. Sadly, this company should have thought more about design. The company went under a year after my internship ended.

My last ‘job’ working with technology was at the K12 Data Center in Madison as an intern. At this job I learned how inefficient the government is. I also learned to dislike Microsoft servers. We rebooted the entire infrastructure every week. You have gotta be kidding me. It was there that I decided I had to do my own thing. I had to innovate, not just turn the inefficient technology crank.

Vetter Solutions

The early days of Vetter Solutions were pretty wild. I didn’t really know what I was doing, but I did what I knew to the best of my ability. The company fixed home PC’s, offered business networking services, and provided web development. Things went well, and I ended up going to Costa Rica for three weeks on company profits. Good times! However the good times ended when I started hiring employees and incurring overhead. The consulting model just doesn’t scale well, and it just about sucked me underwater financially. However I learned a lot about what businesses used computers for, where they fell short, and how the whole thing could be done better. Vetter Solutions existed for 4 years, and provided a great learning experience and jobs for myself and over a dozen others.

Change: The fall of Vetter Solutions, the rise of DataSync

The biggest change I’ve seen is the rise of the Software as a Service software model. In plain English, this model delivers software as a paid for service that you access through your web browser, instead of software you ‘install’ on your machine. It drastically simplifies using and maintaining software for the average person.

Because of this change, I concluded that Vetter Solutions probably wasn’t going to be viable long term. So I   began building a new company (DataSync) that focused on the emerging Software as a Service model. Once the DataSync model became viable (May 2008), I sold the assets of Vetter Solutions to another company and focused my efforts on solving the next problem: clunky technology delivery.

Clunky technology delivery rampant!

Through all these transitions, I noticed how clunky software is. DataSync is working to simplify software, but it’s a tough challenge that’s going to take some time to solve. Software vendors are notoriously out of touch with the real world – the people that use their software. Microsoft has been making ‘bloated’ software for years filled with features no one uses. You have to be a technology maniac to use Linux – which is built for everyone but the user in mind. Apple is the only major software vendor who seems to understand the people who use their software. We’re working hard to make software simple to obtain and use for the average business user. Our efforts so far have been really paying off.

Where I’m at today…

There is still much to be done to make software simple to obtain and use.  However I think DataSync is on the right track. We recently released a new website that hopefully makes the whole idea of software consolidation much more simple. We’re all still gear heads, so it’ll take some time to make our stuff usable to the average person. However we have made some major progress in consolidating and simplifying business software.

Where I’m going…

I think in a year or so we’ll have a product that just about anyone can figure out. In the mean time we’ll add value and simplicity at every step of the way. It’ll be fascinating to see where the industry goes and how we innovate within it. 2009 still has some steam left in it, and I expect to see some real progress before the new year. Stay tuned!

The past few weeks I’ve been burning a lot of time searching for talented people. This search is sometimes a frustrating process. People who are good at what they do usually aren’t looking for a job. If they are, it’s for a very short period of time. Recruiting great people takes a lot of effort (usually networking) and a solid pitch about why they should join our company.

I’m also learning that these people care a lot about culture. They have to ‘like’ the company and how it operates. It also has a lot to do with gut instinct. Even the most talented people seem to trust their gut when making a big career decision.

So in my experience running this fledging company, I’m again reminded that our products and services, although very important, aren’t what power the company. It’s people. Good people are both a cause and effect of a great culture. Building a great culture is an ongoing process that needs nurturing every day. We’re at the very beginning of building a great culture, but so far it seems to get better every day. I’m blessed to work with some amazing, talented people who are actually really fun to work with. Not only do we get a lot done, but we have a blast working on it together. Growing a company is extremely difficult, and I’d venture to say that it’s pretty much impossible if you don’t have great talent and culture.

I’ve noticed that very few people focus on doing what’s important; ideas that actually matter in the big scheme of things. Most people do whatever is next on some list, or just fill time with whatever task is easiest. I’m often guilty of this myself at times. We focus on working hard and getting lots of tasks done, but focus very little time and thought on the actual impact of what we’re working on.

Focusing on what matters changes how we think. Instead of showing up each day to get tasks done, we must show up to make an impact. DataSync is my primary form of reference for this. We constantly battle ‘getting stuck in the mud’. It’s a term we use to describe getting distracted by details and ideas that don’t really impact the bottom line. They are good ideas, but they don’t have maximum impact on our future.

An important principle that must be applied to focusing on what matters is ‘opportunity cost’. Now matter how many hours you work, it’s important to focus on projects that will create the greatest impact on moving your goals forward. Should you work on a project that will generate $1 or another that will generate $10? The answer is obvious. However often we find ourselves doing tasks that are easier or we’re comfortable with, rather than asking the question “what can I do today that will impact progress most?”. Doing this every day will change how you think about time management. Right now I’m reading Drucker on effective management (“The Effective Executive“), and this management genius makes an important point about time management. Drucker points out that what makes executives successful often isn’t their ability to focus on doing things (accomplishing tasks), but instead their ability to make decisions to focus on the right things. Anyone who’s motivated can get tasks done and be pretty darn busy working on these tasks, but an effective person focuses on doing things that actually matter.

Remember, sometimes the busiest people are also the most ineffective. I know so many people who claim to be ’super busy’, yet when you look at what they are actually impacting, it’s really little or nothing. They are just keeping up with the hamster wheel they have created for themselves. People who impact the world refuse to be too busy to focus on things that matter. Instead they constantly reassess their priorities and align their day with long-term goals that they have considered thoroughly.

Next time you feel too busy to think, understand the decision you are making. You’re making a decision to focus on things that may not make any difference at all. You may end up working endlessly on something that just doesn’t matter. You may need to ditch ideas and projects if they aren’t contributing to making an impact. We all have the desire to matter, make sure you don’t lose sight of the importance of doing what matters.

This year’s Open Source Business Conference was the best I’ve seen. Shocking, considering it’s my first one. I was definitely at the bottom of the totem pole in the room – most attendees of this conference are industry leaders. OSBC was run on the highest level I’ve seen at a business conference. Kudos to Matt Asay for putting together some of the smartest minds out there.

OSBC has a CEO track – so I was in my element, soaking it all up. I met some amazing people and gained valuable insight into running DataSync more effectively. Here’s my summary of the event:

• The leaders – Red Hat, Novell, and Sun all had their CEO’s present, and all did a solid job articulating the open source vision and direction. I was most impressed with Red Hat’s new CEO, James Whitehurst, who actually came from Delta Airlines. He has an uncanny understanding of how to monetize open source effectively, while still maintaining a vibrant community.
• Microsoft – I’ve seen this tech giant show up at just about every tech conference I attend, and they always seem grossly misaligned with the idea of open source. This audience was especially hostile. The guy Microsoft had come in (Robert Youngjohns) did a great attempt at embracing the community, but the whole message didn’t make sense. I agree with Matt Asay’s conclusion on the convoluted Microsoft message.
• The sessions – I was very impressed with the sessions I attended. Save for one session, I stayed on the CEO/CMO track. The best sessions I attended were the two CEO panels. I was especially impressed with Mike Olson of Cloudera. Mike was formerly an executive at Oracle and seems to understand how to build software better than just about anyone. He also isn’t afraid to say things how they are. I respect that.
• The message – Everyone talked about the cloud. Everyone. I got sick of hearing it. The main message this year is that the cloud will enable open source to be deployed quickly and inexpensively. I’m sure DataSync will move in that direction as well. The ROI (Return On Investment)/value message also came across strong. With the economy in the dumps, open source is a really attractive option.

Going to OSBC wasn’t free (or cheap!), but it was worth every penny. I gained a ton of knowledge about how the industry works, and how DataSync can compete and win in an industry that commoditizes everything. There’s a massive opportunity for us to make an impact; I’m excited to push forward and continue to create vale in open source software.

I love big, audacious ideas. Ideas that could quite possibly change the world in their own way. As a result, I surround myself with people who have similar big, audacious ideas. We spend a lot of time discussing how to make our Big Ideas happen. The problem with our Big Ideas (and probably yours) is that it takes a lot of time and energy to accomplish our Big Ideas, and there’s a lot of things we need to do to make our Big Idea a reality. A good example is the company I run, DataSync. It’s going to take us 5 years and countless hours to make our Big Idea a reality.

The main issue at stake is how to break your Big Idea into manageable, daily tasks. The problem about us humans is that we can only think about things in small pieces. Trying to solve a giant problem all at once simply can’t be done. Our brains choke on that. Instead we must break down big challenges into manageable task that each help (in their own small way) to accomplish our Big Idea.

So the solution is to break your Big Idea down into a detailed plan. The plan is a roadmap to getting from where you are today to where you want to get. In theory the whole process is simple. Doing it is complex. Here’s how I break down my Big Idea into tasks I do each day:

1. Define your Big Idea – My most prominent Big Idea is DataSync Suite, the software package we’re building. Make sure your big idea is big and challenging to achieve. Otherwise it isn’t a Big Idea.
2. Define ‘current state’ and ‘desired state’ – Practically define where you’re at, and where you want to be at the end of your Big Idea. We call this “current state” and “desired state”. Be specific.
3. Define projects – This high level view will get you to your desired state, so organize them according to the impact they will will make on your Big Idea.
4. Build out milestones – Break each project down into “milestones”, or required achievements to accomplish the project successfully.
5. Build out tasks – Break down each milestone into manageable tasks that can be accomplished in less than a few days.

Note that #5 is broken down far enough to actually accomplish in a given workday or a few workdays. That means you’ll be able to wrap your head around them.

The five steps I outlined above seem simple enough, but how do you actually keep track of them, and measure progress? I’ll take each section and offer some tools that will help.

1. Define your Big Dream – Mind mapping software such as FreeMind will help here. Make sure to have a date in mind to accomplish your Big Idea, otherwise you’ll have nothing to shoot for.
2. Define ‘current state’ and ‘desired state’ – Generally a good, concise document will accomplish this. Maybe a powerpoint. Probably both. You should be able to communicate your current and desired state concisely and with enough detail to define areas that need work.
3. Define projects – I’m a big fan of using a “strategy map’ to do this. A strategy map asks tough questions including the impact, effort, project goals are. Based on this info, you then make a judgement call on what the priority of the project should be. See an example we use here.
4. Build out milestones – This is where you bring in project management software. Base Camp, SugarCRM, activeCollab and others will help you out. Use something that fits what you’re working on. At DataSync, our engineering department utilizes ‘agile development’, so they use a special homebrew application. Use what works for the project you’re working on.
5. Build out tasks – This is where your solution varies widely. If you’re using project management software, use the task management built in. If you don’t use project management software or that software doesn’t do what you want, pick your own solution. Many people I know use OmniFocus. I am a BlackBerry junkie so I use ToDoMatrix, and I couldn’t live without it. The key is to find something that works for you. Make sure whatever tool you pick allows you to set the following: area, priority, and date due. Those 3 indicators should reflect what you defined in your milestones and strategy map.

I want to point out that no one software application is right for everyone, and no one software application will do it all for you. Managing your time effectively requires constant reassessing of values and making sure your day to day tasks are aligned with your Big Idea. Every minute you spend working on tasks that have less than maximum impact on your Big Idea, the slower it will take to get there. Many folks get so distracted that they never achieve their Big Idea. Don’t let it happen to you. Look at your Big Idea, strategy map, and milestones often and make sure you stay on track. I do it every day.

As I mentioned at the top, I haven’t figured this whole problem out yet, but I’ve made a lot of progress. I would welcome feedback and ideas on how to do this more effectively.

Thank you all for your words of encouragement regarding my recent posts about DataSync. In the mist of the thrill of what’s going on, I feel I need to recognize a couple key truths:

1. This happened because of God’s blessing and hard work by a large group of people. It didn’t happen just because of me, but I’m honored to be a part of it all.
2. This is just the beginning, we have a long, difficult road ahead of us.

I firmly believe that this project is working because God’s hand of blessing is on it. At most times it wasn’t deserved. Success is built on so many ‘chance’ encounters that I choose to believe stuff like this isn’t chance. God chooses to give and take away, and in this season he’s blessed our work.

In addition, we got funded because of a team at DataSync that was relentless. The people behind this project believe in it as strongly as I do. They kept hammering on it through the dark times along with me, and I’m grateful for all of their help. Second, our advisory team was instrumental in getting this project moving. Mari Beth Baumberger (Enterprise Institute), Al Kurtenbach (Daktronics), John Hemmingstad (Small Business Development Center), and my entire seed advisory board contributed greatly.

It’s easy to bask in the glow of winning, but that would be very short sighted. A close adviser told me this today: “You’ve graduated, Congratulations! Enjoy the moment… You now have significantly more at stake… it’s time to get serious and lead your team to the next level. Ready?”. I am ready. The rough road has just begun. It’s going to get more challenging for the company in the coming months and years. After all, we’re growing into a shrinking economy. It’s not going to be easy.

However this company is built on the principles of faithful, diligent, and outright hard work. We’re going to be up against great challenges and difficult decisions. We will prevail.

Thanks for sharing the journey with me!

For those of you who are watching the company I run, DataSync, you’re probably aware that we raised our Series A venture funding back in December, 2008. It was quite the journey.

According to a recent article by the Angel Capital Assocation, early stage investing went down in 2008, and will probably drop more in 2009. Because of the recession, angel groups are focused on ensuring existing portfolio companies survive, so they are spending less on new startups. Raising capital wasn’t easy to begin with – fewer than 1 in 100 companies actually acquire venture funding (src: Launch Utah). That number is probably worsening every day.

So how did we do it? The answer, in my opinion, is found in more than one factor:

1. Low capital requirement – It takes a lot less capital and time to get a software company launched, compared to ‘invention’ or research type companies. This put DataSync in a great position to ask for capital now – we didn’t need a lot of dough, have fast growth potential, and an ‘annuity’ type income stream.
2. Product already in marketplace – We already have a significant and growing customer base, so investors have the assurance that our product would actually generate revenue.
3. Product sells well in a bad economy – DataSync offers software that requires very little upfront and recurring cost and has an immediate payoff to our clients. Often our clients save money the first month.
4. Great advice – The Small Business Development Center built out our financials and advised heavily on positioning the deal, the Enterprise Institute worked with our value prop for investors, and RAIN Source Capital helped wrap out the deal with their capital network. Solid, experienced advisers are key to successfully raising angel capital.
5. Unshakable belief in our vision – I believe wholeheartedly in what we’re doing at DataSync: providing businesses with the best software, consolidated it, and delivering it for a competitive price. That’s what we’re all about at DataSync. We live it, we breathe it, we’re going to make it happen. You have to have that level of belief in your vision to fight through obstacles. We have that desire.
6. ‘Hardiness’ and tenacity – Hardiness is a word we use a lot around DataSync – one definition is “capable of surviving unfavorable conditions”. It took us a year and more presentations than I care to remember to raise capital. We knew we could execute on the goals we set, so we kept knocking on doors until we found investors who saw promise in the same mission.

If you’re running a company that’s poised to succeed, but need capital to get there, take heart. A bad economy weeds out bad ideas and people who aren’t as committed as you, giving you a long term competitive advantage. However it’s not going to be easy to get there. Make sure you have a solid idea you can believe in, build a network around you to best position your company, and network around the clock to find investors who believe in your idea. You’re going to have to beat the odds. After all, you’re trying to be the less than 1 in 100 companies who actually gets funding. It’s not supposed to be easy.