EXCLUSIVE INTERVIEW

Startup, Know Thyself: Q&A With Sierra Ventures Managing Director Tim Guleri

In this business climate, the road to striking a venture capital deal is difficult for both funder and fundee. Small startups with big ideas obviously have a harder time finding VC firms willing to take a chance on them, but those VC firms themselves are under added pressure to make the correct decisions regarding where to put their limited resources.

In the case of Sierra Ventures, one of its latest bets is on a firm called “webappVM.” WebappVM is attempting a next-generation approach toapplication management that leverages cloud architecture ratherthan adapting a previous architecture that hinders cloud benefits.

WebappVM’s new approach works as a virtual layer without agents. Otherapproaches use a series of agents and management servers to achieveapplication management functionality. The minds behind webappVM believe the latter approach can disrupt the benefits ofmoving to the cloud: on-demand scaling, portability, low cost,self-service, etc. Instead, webappVM goes in as a virtual layer.

The E-Commerce Times spoke with Tim Guleri, managing director at SierraVentures, about the state of the tech VC marketplace today and ways in which new companies can catch the attention of venturecapitalists.

Guleri has led the firm’s investments and serves on the boards ofApprova, CodeGreen Networks, DotNetNuke, Everest Software (acquired by Trilogy), Greenplum, MakeMyTrip.com (in India), Sourcefire and CarWale (in India), among others. A serial entrepreneur,Guleri built two software infrastructure companiesbefore joining Sierra in 2001.

E-Commerce Times: How much more difficult is it to obtain seed money andsupplemental rounds of investment support in today’s economic climate?

Tim Guleri:

It’s a tough climate for companies to raise capital. Onereason is the macro financial markets have been very choppy. Andobviously the growth over the last couple of years fell off. The lasttime we saw this was after the 9/11 event. The second reason is thecapital which flows into venture capital funds was also at a lowpoint. So there is less capital coming in, and the market is in thedoldrums. This makes it a tough market. The balance is that greatentrepreneurs with well-thought-out business plans are still gettingfunded and are the kind of businesses that we scour the landscape for.

ECT: In light of what you’ve just said, how different is therole of providing funding in today’s market?

Guleri:

We haven’t seen the process change much. We do the sameamount of due diligence and still call customers and prospects and tryto get confidence in the financial model that’s been presented to us.

I think it’s fair to say there is a little more time that’s availablefor us to make these investments from the venture capitalist’sstandpoint, so both sides– the entrepreneur and the venturecapitalists — can do more thorough work. I think the process canstill be very efficient, but at the end of the day, it all comes downto the idea and the team.

ECT: Does that hold true whether the applicant is an opensource company or another type of company? Are there differentqualifications depending on the type of business the applicant comesfrom?

Guleri:

Yes, precisely. Venture capitalists like to invest wherethe market is. There’s going to be correcting in a few years, so wetend to invest ahead of the market, so if you can get to us beforethese ideas become mainstream. We are looking for emerging trends andcompanies that have a sense of how to capitalize on these moderntrends.

So from that standpoint, new things that are affectingexisting architectures — like cloud computing, like a whole newgeneration of storage, like a whole new generation of databasearchitectures, a whole new generation of how you manage applicationsin the cloud — those are the kind of forward-looking trends that welike to pick up on early and then get behind.

ECT: If I were an open source vendor, would I have a leg upin getting considered for a VC money award?

Guleri

You would have a major step up over others if you were anopen source company. Open source used to be a bit of a misunderstoodbusiness model. Now it is something that has picked up good momentumand is something that VCs love to see.

ECT: Are you seeing more requests from open source startups,or is that still a sparse field?

Guleri:

It’s still a sparse field, and that’s a good thingbecause every discipline, be it software or hardware or data center, hasan open source project that knocks them to death. So consequently, whathappens is that the customers are not getting a value from a closedsource like a McAfee or Microsoft. They would rather look for an opensource company. And when that open source company gets to scale, thenthat open source company will come looking for money. So that fieldhasn’t become over-crowded. There are only a handful of companies thathave reached commercial status following open source

ECT: What advice would you give to a startup entrepreneur whois reaching out for VC support? Are there certain things that need tobe done, or are you just looking for something that is out of theordinary?

Guleri:

The first thing to do is get conviction around thecustomer ROI. The way to do that is to know the market and getconfidence in the market. So number one is product market. Number twois getting confidence in your financial model. This is where I tend todo a lot of work. I like to invest in companies that are efficient inservicing customers. I like a company to know how to develop thecompany and how to leverage that. So entrepreneurs need to be veryfocused on this early because the decision we make today about fundinga small company will be based on how do you go to market, how do youmarket and how much money do you need to raise.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories
More by Jack M. Germain
More in Business

Technewsworld Channels

OPINION

How Not To Do CX, Lenovo Style

Customer Experience CX

Sometimes the world of smart technology innovations collides with the planet of dumb customer service provisions. That collision usually does not bode well for the customer.

In my case, that scenario is particularly true. I bought Lenovo’s Chromebook Duet 5 for an attractive price from a major national electronics store. In hindsight, that was a purchase I wish I could undo.

The Duet 5 is regarded in numerous reliable reviews as the best overall ChromeOS tablet/detachable computer available this year. Its larger screen and detachable full-size keyboard make a usable and fun tablet experience not available with pure Android devices.

For me, that accolade falls far short of reaching that mark. In fact, if your primary need for a Chromebook is to run Linux apps, think again about not buying Lenovo’s Duet 5. You might get a unit like mine that does not do Linux even though it is supposed to work. That failure is not considered a valid claim under Lenovo’s warranty.

I have become quite fond of Chromebooks. ChromeOS devices supplement my home office cadre of Linux computers. They link to my Android phone and its apps. I can run the same productivity apps and access their data directly on the Chromebook.

What fed my attraction to the Duet 5 is its logical follow-up to the very popular 10.1″ original Duet I bought a few years ago. The Duet line has a detachable keyboard and is a stand-alone ChromeOS tablet.

Putting want versus need aside, I debated the prospect of more productivity and convenience with a bigger screen at 400 nits, larger keyboard, and 8GB of RAM. I knew the manufacturer and the retail store as well as the product line. Or so I thought.

What could go wrong? Three things: a failed product, no support, and a warranty that also did not work!

Maybe One Too Many

The last thing I needed to buy was yet another Chromebook. Over the last few years, I have used four or five models from HP, Lenovo, and Asus.

The Duet 5 seemed to check all the boxes. As it turned out, the check mark fell out of the box for reliable tech support and customer service.

Nope, I could not return the computer. By the time I discovered its defective nature the undo window had closed.

I suppose this incident will nudge me to buy expensive add-on store warranties for less expensive electronic devices. Adding insult to injury, Lenovo tech support said the malfunction was “beyond the scope of the manufacturer’s one-year warranty.”

A final correspondence from Lenovo’s tech support told me that if I shipped the device to its repair facility, all the technicians would do is reset the unit to its original OS status and remove Linux.

Heck, I had already done the same thing twice.

Lenovo Buyers Beware

This account is not intended to be a product review. Rather, it tells what happens when corporate arrogance destroys the customer experience.

I usually write about business technology issues and open-source developments impacting the Linux OS. My reporting beat overlaps with e-commerce and customer relationship management (CRM) issues.

As a tech writer and product reviewer, I am used to manufacturers sending me top-of-their-line products in hopes of showing off their best wares. Marketing marvels often offer high-end configurations to curry consumers’ attention. They go out of their way to make sure the reviewer is fully satisfied.

Too bad that mentality does not always exist when lowly consumers are on the receiving end. But I was not using a loaner unit I would send back anyway, satisfied or not. I bought this model with no plans to review it. I just wanted to use it.

My personal experience hardened my resolve to not buy a Lenovo product going forward. Not because of a bad product encounter. Lenovo lost my customer loyalty because of shoddy customer service and no dedication to resolving my issue with a malfunctioning computer that they built.

The Gory Details

According to Lenovo’s ill-conceived logic, the warranty on Chromebooks does not cover user modifications. Since I activated the Linux partition, ran into a problem, removed the partition, and reinstalled Linux apps not there when I bought it, I was guilty of modifying the device.

To clarify, all Chromebooks require the user to turn on the Linux partition and install Linux apps. That is the same process for using Android apps on Chromebooks.

Chromebooks are built to run the ChromeOS and optionally to run in separate built-in containers Android and Linux software. Google certifies the hardware to ensure the software works.

The ChromeOS similarly enables users to access websites in a browser environment. An added option lets users access those web destinations to run application services within tabbed browser windows or as progressive web apps (PWAs) in their own isolated windows.

That is what Chromebooks are designed to do on any manufacturer’s hardware. Turning these built-in features on/off should not be construed as “modifying” the device.

Tech Support Hell

A few weeks after receiving the Duet 5, I experienced only an intermittent screen flickering issue. That cleared up after a system update. No worries. No concerns.

At that point I turned on the Linux partition and installed the same Linux apps that I use on my other lesser-endowed Chromebooks. Those devices worked fine with the same apps installed.

But the Lenovo Duet 5 froze after loading the Linux apps and running for a few minutes. Glitchy installations happen. So I did what is standard troubleshooting. I reset the ChromeOS to its original status. I then set up the Linux partition and sized it well beyond the Google-recommended minimum size.

Problem NOT solved. So I wiped the Linux partition again. This time, I installed a single Linux app one at a time looking for the culprit throwing the others out of whack. Every Linux app in isolation froze.

Lenovo tech support declined to investigate or test the hardware. The agents suggested finding an affiliated tech center to pursue a solution.

Stuck With No Options

I gladly would have done that. But the nearest such Lenovo repair center was across state lines some 150 miles away.

I reached out to the Google Chromebook support community for an alternative solution. A support person there had me run the “df command” in a Linux terminal to determine the physical health of the partition.

The readout from that diagnostic confirmed the device has a valid and working Linux container. That partially settled the question about the hardware. It did not, however, identify what other hardware issues might be involved.

The Google support forum tech then suggested I look for one or more dud packages by following the procedure outlined above. But, of course, I already did that several times.

Lousy Lessons Learned

If you plan to buy a Chromebook just to have easy access to selected Linux apps, seriously consider my experience. Maybe look elsewhere instead of the Duet 5. Numerous Chromebook alternatives exist.

Who knows? Maybe the Linux apps will work fine for you on your Duet 5. As I said, I have not had this situation on any other Chromebook product I use.

No doubt my experience was a gross anomaly. The aggravating part in all of this is that I will never know the cause.

But if you buy a Duet 5 from a retail outlet instead of directly from the manufacturer, be sure to confirm how that store honors the warranty. You now know how Lenovo honors its warranty.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.
Jack M. Germain

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories
More by Jack M. Germain
More in Tech Blog

Accent Altering Voice Tech Aims To Replace Frustration With Communication

frustrated customer calling customer service

Having trouble understanding that person at the end of the support line you’ve called to get some customer service? A Silicon Valley company wants to make those kinds of problems a thing of the past.

The company, Sanas, makes software that uses artificial intelligence to remove the accents in the speech of non-native, or even native, English speakers and output a more standard version of the language. “The program does phonetic-based speech synthesis in real-time,” one of the firm’s founders, Sharath Keshava Narayana, told TechNewsWorld.

In addition, the voice characteristics remain the same even after the accent is removed. The voice output by the software sounds the same as the voice input, only the accent has been removed so, for example, the sex of the speaker is preserved.

“What we’re doing is allowing agents to maintain their identity, maintain their accents, without the need to change it,” said Sanas CEO Maxim Serebryakov.

“The call center market is enormous. It’s 4% of India’s GDP, 14% of the Philippine’s GDP,” he told TechNewsWorld. “We’re not talking about a few thousand people getting discriminated against on a daily basis because of their cultural identity. We’re talking about millions and millions of people that get treated differently because of the way they sound.”

“The concept is sound. If they can make it work, it’s a big deal,” observed Jack E. Gold, founder and principal analyst at J.Gold Associates, an IT advisory company in Northborough, Mass.

“It can make companies more efficient and more effective and more responsive to consumers,” he told TechNewsWorld.

Talking Local

Gold explained that locals tend to better understand local dialects and associate with them better. “Even talking to someone with a heavy Southern accent sometimes gives me pause,” said the Massachusetts resident. “It affects the effectiveness of the call center if you can be much more like me.”

“Many call center workers are based overseas and customers could easily have trouble understanding what they’re saying in the case of strong accents,” John Harmon, a senior analyst with Coresight Research, a global advisory and research firm specializing in retail and technology, told TechNewsWorld.

“But the same could be true even for regional U.S. accents,” he added.

However, Taylor Goucher, COO of Connext Global Solutions, an outsourcing company in Honolulu, discounted accents as a source of customer frustration.

“It is well known that companies outsource call center support to different countries and rural parts of the United States,” he told TechNewsWorld. “The larger issue is the right selection of employees for the position and the training and processes that are in place to make them successful.”

Customer Perceptions

Harmon noted that consumers can have a negative reaction when they encounter a support person with a foreign accent at the other end of a support line. “A caller could feel that a company is not taking customer support seriously because it’s finding a cheaper solution by outsourcing service to an overseas call center,” he said.

“Also,” he added, “some customers might feel that someone overseas might be less able to help them.”

Goucher cited a study taken by Zendesk in 2011 that showed customer satisfaction dropping from 79% to 58% when a call center was moved outside the United States. “Everyone that I know has likely had a poor customer experience at some point in their lives with an agent that they couldn’t understand,” he observed.

He noted that the biggest problem with bad customer experience is the lack of support systems, training, and management oversight in the call center.

“Frequently we see companies move call centers offshore just to have the phone answered.” he said. “In customer service, answering the phone isn’t the most important part, it’s what happens after.”

“Agents, accent or no accent, will be able to provide winning customer experiences if they are the right person for the role, have the right training, and have the right tools to solve customer problems,” he added. “Saying the accent is the problem is an easy out.”

Bias Against Accents

When a customer support person doesn’t have the tools to solve a problem, it can be a huge frustration to a customer, Gold observed. “If I call somebody, I want my problem solved, and I don’t want to go through 88 steps to get there,” he said. “It’s frustrating to me because I just spent a whole bunch of money with your company.”

“Anything that can be done to get over that hump faster has multiple benefits,” he continued. “From the consumer perspective, there’s the benefit of not pissing me off. In addition, if I can get through faster, it means the service person can spend less time with me and can handle more calls. And if I can hone in on the problem better, I won’t have to call again about it.”

Regardless of whether a customer support person has the tools they need to provide top-notch service, accents can influence a caller’s response to the person at the other end of a phone line.

“A customer could become upset at having to decode a foreign accent,” Harmon said. “There is also the stereotype that some U.S. accents sound uneducated, and a customer could feel like that the service provider is getting by with cheaper support.”

“In some cases, I think the biggest pre-existing bias is that if the agent has an accent, they aren’t going to be able to solve my problem,” Goucher added.

Choice for Voice

Serebryakov noted that one of the goals of Sanas is to provide people with choice when it comes to their voice. “When we post photos on Instagram, we can use filters to represent ourselves however we want to,” he explained. “But you don’t have a similar medium for voice. Our mission at Sanas is to provide that kind of choice.”

Although Sanas has initially targeted call centers for its technology, there are other areas that hold potential for it.

“One of the biggest uses we see for the technology is in enterprise communication,” Narayana said. “We got a call from Samsung saying they’ve got 70,000 engineers in Korea who interact with engineers in the U.S., and they don’t talk at team meetings because they’re scared how they’ll be interpreted. That’s the next use case we want to solve.”

The technology also has potential in gaming, health care, telemedicine, and education, he added.

Sanas on June 22 announced a $32 million Series A, boasting the largest Series A round in history for a speech technology company.

John P. Mello Jr.

John P. Mello Jr. has been an ECT News Network reporter since 2003. His areas of focus include cybersecurity, IT issues, privacy, e-commerce, social media, artificial intelligence, big data and consumer electronics. He has written and edited for numerous publications, including the Boston Business Journal, the Boston Phoenix, Megapixel.Net and Government Security News. Email John.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories
More by John P. Mello Jr.
More in Emerging Tech