Tuesday, April 14, 2009

John Landry from Lead Dog Ventures on Lessons from his Time at Lotus

John Landry, CEO of Lead Dog Ventures, and previously CEO of Lotus came in to talk to us about Lotus' role in the evolution of the enterprise software business.  It was a pretty interesting talk, some of which I don't feel comfortable posting in a public forum.  Here are some of the lessons from class.

Know what strategic partners want from you and whether their strategy will work: Companies who partnered with IBM and were asked to build OS/2 software before Windows got killed. 4,000 sales reps. selling your software for an operating system that no one uses is worse than 3 sales reps selling on the right platform.  

The key to software is integration: Software has to be able to talk to other programs to really create an effective ecosystem. Lotus was always behind in integrating with the operating system once Microsoft took that office, a major competitive disadvantage. Speed and quality of integration are key drivers for a enterprise software company success.  

Co-location is important for software projects: Communication is essential for integration. Lotus made a mistake putting its Iris group, essential to its strategy 25 miles away in Westford. That slowed integration speed and created two separate corporate cultures that didn’t communicate well.  

“Empowerment is a zero sum game”: If you empower someone, you’re likely taking power away from someone else. So think about who you want to have control.
Innovation-focused spinouts must be structured properly: Many companies these days are using spinouts to innovate. The thought process is that creating these small entrepreneurial shops permits quicker innovation. However, with Iris, Lotus did not get the incentive and cultural structure right to meet their goals. The organization needed innovation, but it needed to be integrated with their existing products. Setting up a separate company in a separate location did not fit that goal.  

Being evil can be a business model: Several of the industry veterans who were in the class pointed out how effective Computer Associates was in acquiring software companies whose clients were locked in. CA would then cut costs and treat these clients terribly to improve margins, but since the clients were locked in. 

John Landry Biography

With 25 years of experience building software and software companies, Landry manages Lead Dog Ventures, a disruptive new-age business accelerator, providing emerging technology enterprises access to a well developed network of intellectual, relationship and financial capital. Landry currently serves as Chairman and CTO of one of Lead Dog's largest investments, Adesso Systems, where he led the design and development of Adesso's revolutionary distributed applications platform. Additionally, Landry has served as chairman of various companies including Agility Systems, Narrative Communications, Anyday.com and Adjoin Solutions.

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