FAW #7: Ray Ozzie of Groove Networks
Base your company on a future need, not a future technology
Ray Ozzie founded Groove Networks in 1997 after successfully developing the Lotus Notes product and getting his former company, Iris, acquired by Lotus in 1994. Ray says, “I’ve never taken the perspective of ‘build a cool piece of technology and see where it goes.’ It’s more or less been based on an intuition about a hole in the market - or, more accurately, a future hole in the market…it will take you several years to build anything that’s worth building. So you don’t want to fill today’s needs but try to capture some window that will happen in the future.” This is entirely consistent with the advice of the Innovator’s Solution and the notion of “skate to where the puck will be.”
The hole that Groove fills is obvious now but took foresight to identify the time they started the company in 1997. Various factors are leading to more distributed team environments- outsourcing, globalization of the workforce, and the acceptance of telecommuting translate to more and more people working remotely. I used Groove extensively during my work as a trial consultant to securely collaborate with people across different legal teams and expert witnesses. I wrote about its implications for the legal market back in 2005. At the time Ray Ozzie gave an excellent talk that was later syndicated as a podcast on ITconversations in which he explained how Groove helped in the humanitarian cleanup operations in Iraq in 2004. The essence of Groove is its “masterless synchronization” magic and it’s ability to facilitate ad hoc work spaces that allow you to connect with people external to your organization and securely share information and have “presence awareness” (knowing who is working on what in real-time). It’s like a souped-up IM client / WebEx system that keeps a synchronized workspace allowing you to make changes offline and have them sync once you’re connected. It also has an adaptable interface depending on what tools you need to do your job. Ray knew that work would ultimately evolve towards a more distributed arrangement and aimed to build a product that would meet the challenges involved.
Ray said: “With Groove, it was an observation that the nature of work was changing. Technology at that point had largely been applied to helping people work together within corporate boundaries. People were increasingly going ot be challenged trying to apply that same technology across boundaries, because you can’t control the technology chosen by your business partners. I might choose Notes, you might choose Exchange, the other person might choose someone else. We saw a lot of frustration when our customers tried to deploy systems across enterprises. So we came to the conclusion that what we really needed was to build a system that just worked instantly, right after download, for the end users.” Amen brotha. We feel the same way about Open Source.
In our JumpBox world, the technology through which we deliver bundled Open Source applications currently relies upon virtualization and though it appears that this is the essence of JumpBox, it’s not the destination but merely a means. The essence of JumpBox is more accurately described as “whatever is necessary to form the quickest path to productivity for the consumers of these applications.” It’s conceivable that in five years time there will be a better way of deploying applications - if there is a successor to virtualization that simplifies things even more, JumpBox will evolve to embrace that technology to achieve this goal.
The “larger mission” carried them through rough times
There are times in a startup when things look grim. A theme across FAW stories that was reiterated in the Groove instance was that in those bleak times, the factor that kept people putting one foot in front of the other each day was this idea that they were building something that would positively sculpt the landscape of their industry. When there’s no money coming in and you’re grinding out long hours, there’s clearly another motivator that’s fueling things. Ray said: “what held people together was the belief that you’re really going to change the world. I think that’s the nature of many startups. You believe that what you are doing is going to have a dramatic impact. You might not exactly know how, but you really have a belief. That keeps you going and going through many changes and a lot of uncertainty.”
We share this perspective with JumpBox. Having poured nine months of our lives and large sums of money into the development of this technology, the thing that primarily powers the team at this point is this idea that we are creating something truly revolutionary which has the ability to eradicate countless person-hours of frustration, and to bring Open Source within reach of a new audience of non-technical people. Sure, it’s potentially a lucrative business but all money aside, it’s like there’s an obligation for us to deliver this technology to the public now that we know it’s possible.
The educational challenges of a new technology and “late-binding” positioning decisions
Something we constantly face that Ozzie touched upon is the challenge of educating a market when your technology is so new and foreign that it solves a problem that people don’t necessarily know they have. For us to explain the concepts of Open Source, virtualization and multi-user server-based applications to folks unfamiliar with this stuff, it’s a lot of concepts to digest in one sitting to be able to appreciate the value of what JumpBox does. We’ve chosen to stay very much focused on reaching the technical community at least for the short-term. At the risk of excluding a big chunk of non-technical people out there, this allows us to provide value to the people that already get what we’re solving and defers the educational responsibility until later.
Ozzie also refers to the challenge around the changing landscapes of tech and market during their three-year development process. Ray said: “In both Notes and Groove, there was both technological uncertainty and market uncertainty. We knew we were embarking on something that was technologically very difficult and would take several years. But you know that the market is going to change during those years, so virtually everything you do, you have to late-bind the decisions. You can’t completely predetermine all the user interface or integration decisions. You cannot early-bind marketing and positioning decisions because the market and competitive environment will be different.”
“Why isn’t Microsoft just going to crush you tomorrow?”
This question today is perhaps better asked substituting Google for MS but it’s a valid concern from potential investors. Ozzie answered it by taking investment from MS and aligning their interests with his own. MS had let Lotus slip undetected under their radar years earlier and was not planning to make the same mistake with another one of Ozzie’s companies. They invested mostly to keep a watchful eye on the Groove strategy and know what they were up to.
Groove and Ray Ozzie were both acquired by Microsoft in April of 2005 for $120MM. Ray Ozzie now serves as CTO of Microsoft and the Groove Virtual Office product is offered as Microsoft Groove Office 2007. Listen to his excellent keynote from the SuperNova conference in 2005.