When Startups Face CIOs - InformationWeek

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9/23/2008
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John Foley
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When Startups Face CIOs

When six startups took the stage at InformationWeek's annual conference last week to make their business pitches, Xkoto wasn't the odds-on favorite. Its Gridscale database load-balancing software isn't sexy or cheap, and end users never see it. Here's how Xkoto CEO David Patrick swayed the judges in his favor.

When six startups took the stage at InformationWeek's annual conference last week to make their business pitches, Xkoto wasn't the odds-on favorite. Its Gridscale database load-balancing software isn't sexy or cheap, and end users never see it. Here's how Xkoto CEO David Patrick swayed the judges in his favor.Patrick and five other startup executives had a mere three minutes to make their business case in front of our CIO audience. The others were FireScope (business service management software), SugarCRM (open source CRM), Mi5 Networks (Web filtering appliance), Pentaho (open source BI), and Vyatta (open source networking). The six contenders were chosen by InformationWeek readers in an online poll conducted in August. For more on the methodology and poll results, see "Top 10 Technology Startups."

In last week's live contest, slide presentations and other audiovisuals were banned, putting a premium on clear, concise verbal presentations. A panel of three CIO judges (Carolyn Lawson with the California Public Utilities Commission, Robert Reeder of Alaska Airlines, and Mike Cuddy of Toromont Industries) questioned each presenter and graded them, on a scale of 1 to 5, for business feasibility and value.

Mi5 Networks finished slightly behind Xkoto in the scoring, and all of the startups scored four or higher with at least one of the judges. But Xkoto got its message across with the greatest success. (See "Database Virtualization Vendor Wins Startup City Contest.") Here's how:

Clearly stated enterprise value. Scalability, performance, and system availability are like oxygen to IT departments, and they were the gist of Patrick's presentation. Xkoto's load-balancing software increases resiliency and performance by creating "active" copies of databases between databases and the applications accessing them. The CIOs got it.

Right message for the audience. CIOs aren't system administrators, but they require enough of the technical nuts and bolts to determine whether a new product is a good fit for their IT infrastructure. Some of the startups failed to clear that hurdle in the few minutes available to them.

Straight answers. When I asked Patrick how much Xkoto's software costs, he didn't waffle: $100,000 for the DB2 version, $20,000 to $30,000 for the SQL Server version. Such unequivocal answers give startups credibility, while anything less sets off warnings. Says Cuddy, "You have to avoid the temptation to say yes to every question from a customer."

It's not easy getting a crisp message across in 180 seconds. While all of the startups on stage did a pretty good job, some would undoubtedly do things differently if given another chance. In the real world, however, startups don't get a second chance with CIOs. Everything depends on getting it right the first time.

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