Southeast VC

The $100 Laptop

There is a lot of buzz about the $100 laptop which could be completed and be ready to be shipped by as early as next year.

As background, the MIT Media Lab helped launch a new non-profit association - One Laptop Per Child (OLPC). The global program's goal is to create a $100 laptop and put it in the hands of hundreds of millions of students and teachers around the world.

The five countries initially participating are: Brazil, Thailand, Egypt, United States (Massachusetts), Cambodia, Costa Rica and Tunisia. Each of them has committed to buy the laptops and give them to the students and teachers.

Prototypes should be available Q3 '06. Manufacturing should begin Q4 '06. The initial target is that 10 to 15 million test units will be ready to ship by Q1 2007.

The laptop will be Linux based, have full color, be wireless and will be capable of doing everything except it won't have the ability to store a lot of data. As a unique feature, the laptop will have windup-powered with one minute of hand cranking giving enough power for the laptop to operate for 10 minutes. Here are some pictures.

Founding members include: AMD, Brightstar, Google, News Corporation and Red Hat. Each of them initially chipped in $2 million. For more about Red Hat's involvement, read this interview with Michael Evans, their VP of Corporate Development.

As a secondary benefit, people are already talking about making a commercial version available maybe for something like $200 and some of the proceeds go to OLPC.

Variation of the Keiretsu Business Model

I hope you had a great Thanksgiving!

I am still up in Massachusetts visiting with family and just read an interesting article in the Boston Business Journal that VC firms see a return to a variation of the keiretsu business model. As a reminder, this was the model that Kleiner Perkins used to network and help build their portfolio companies.

The variation that the article points to is that some VC firms are filtering calls from service providers that want to work with all/some of the VC's portfolio companies. If the VC sees that one of their companies has a good experience with the service provider, that service provider will get actively referred out to other companies within the portfolio.

This is dead on.

I go out of my way to refer service providers that outperform for one of our portfolio to our other companies that need similar help. In fact, I really don't think of them as service providers anymore. I truly think of them as business partners. They come in all shapes and sizes - and can be (but not limited to) recruiting firms, web developers, accounting firms, law firms or even insurance brokers! As simple as may sound, I have referred in the same insurance broker that offers employee benefits to many of our companies. Not only does that firm end up saving our companies money every time - while getting them a better plan, but their service level is incredibly impressive.

Of course the final decision rests with the company, but these referrals and the careful screening process often help the venture backed companies save a lot of time. In addition, the company knows they are adding a proven, high impact business partner right away.

Rumor: Google to Open RTP Office

Rumor is that Google could be announcing that they are opening up an office in Research Triangle Park, NC.

If it is true, this would allow Google to tap into RTP's high concentration of engineering talent. My guess is that they will probably announce an acquisition here rather than start building their team from scratch.

More to follow.

Google Base - Beta Launch

Well, for those of you that don’t know Google launched “Google Base” a few days ago – of course in the typical Google way “in BETA." Here is a post on Google's blog about it.

It will be very interesting to see how this plays out. To me, it looks like Google wants to own the online commerce/classified world. This could be potentially bad for eBay, Amazon, Craigslist, Yahoo!, and a slew of other companies. Looks like I am not the only one thinking this way. Check out this story at Fool.com.

One of our portfolio companies, ChannelAdvisor, is already supporting Google Base and is seeing some good results.

Here is another interesting post on this topic.

For VCs, the Entrepreneurs are the Customers

Great post by Fred Wilson. It talks about how entrepreneurs are the VC's customer. Completely agree.

Venture 2006 - Apply Early

If your company is in NC and you think you may need venture capital in 2006, apply to present at CED's Venture 2006. The event showcases the region's top technology and life science companies and is scheduled for May 2-3 in Pinehurst, NC.

The early consideration deadline is November 30 and I highly suggest applying by then if possible.

Almost all of our companies have presented in the past. Over the last six years, presenters at this conference have raised over $1.7 billion! Last year's conference attracted over 700 people with VCs from throughout the country. I promise this year's conference will be even bigger.

If you read this and decide to apply, let me know.

Tips for Offering Great Customer Service

All companies are focused on increasing sales and building new sales channels, but sometimes offering great customer service gets ignored. Studies have shown that customer service is the third most important factor influencing a purchasing decision, ranking after confidence and quality. But sales won’t matter if the customer is quickly lost through poor customer service. The damage increases further when lost customers tell others about their poor experience.

So, what goes into having great customer service?

Great customer service starts with making sure everyone throughout your organization understands your customer’s needs and they are able to address them while exceeding expectations. Everyone needs to be prepared for the first time a customer or prospect initiates contact. Also, offering great customer service isn’t limited to just your “customer service team.” Every single person in the organization needs to believe in offering great customer service. Just as a quick example, a call may be misrouted and get to one of your engineers or someone on your finance team. How will they handle it? Think about it this way – everyone in your office needs to be prepared to interact when a customer contacts them. That can happen in your office, on the phone or outside of work – in a restaurant as an example.

We have been incredibly impressed with the way our portfolio companies have handled customer service throughout their organizations. Many of them like Art.com/AllPosters.com and ChannelAdvisor have built it deep into their culture and it has helped distinguish them from their competition. I asked executives at both of these companies for their thoughts on what makes great customer service.

ChannelAdvisor

ChannelAdvisor helps businesses of any size sell through many online channels. One of the channels they support is eBay. eBay is the largest online marketplace in the world processing almost $40 billion worth of merchandise through their site during just the second quarter this year alone! One of Ebay’stop concerns is making sure fraud is a very low percentage of their total transactions. However, sometimes legitimate merchants get caught in fraud checks and get shut down by eBay. Of course, this is a huge blow to the seller since they can get banned for 30 days, even if it is eBay’s mistake. Imagine a seller that gets banned during the busy holiday season!

ChannelAdvisor does an excellent job keeping their ears to the ground and when they hear about a merchant that has a problem, they call eBay immediately and do everything they can to get the seller’s business back online quickly. This shows how much ChannelAdvisor truly cares about the seller’s business - by going above and beyond to help them succeed. The best part? ChannelAdvisor does this for non-customers as well. Think of the impact! Of course, this is something the sellers never forget and always ends up being a positive for ChannelAdvisor in the long run.

Michael Jones, Chief Operating Officer at ChannelAdvisor offers the following “Five Tips for Great Customer Service” that he has implemented:

1. If you don't take of the customer someone else will

2. Listen to what your customer's needs are, not what you think their needs are

3. Learn your customer's language, it helps you speak to them and understand them better

4. Have everyone in your company spend time with customers, and I mean EVERYONE, they will learn so much about how to be successful that way.

5. See #1 it is the most important rule - if you don't learn it you will fail

Art.com

Art.com believes that great customer service comes from people that take customer service personally.

“Listening to our customers is not just one of the things we do, it’s a primary focus of ours – a happy customer is the ultimate return on investment for Art.com,” said Joshua Chodniewicz, Co-Founder and VP of Corporate Development of Art.com.

Recently, a distraught customer called Art.com after receiving a notice that they would be unable to fulfill an inspirational piece she was sending to a friend recently diagnosed with cancer. A representative from Art.com’s customer service team located the exact same item, paid for it with a personal credit card, and had it delivered on behalf of the customer.

Leanne Onstott, Customer Services Director for Art.com, shared with me the following Top Five Tips for Great Customer Service:

1. Desire to help others and solve problems to make things better.

2. Have excellent listening skills.

3. Demonstrate exceptional follow through.

4. Have the ability to express empathy.

5. Know who does what in the organization, so you can make a miracle happen when it is needed.