OpenView Labs Projects: A Retrospective
Looking back over the last 5 years
Around the turn of the new year, I am in a retrospective mood. Having recently written a few blog posts about how OpenView Labs consult with our portfolio companies, I was interested in seeing how our projects have changed over time, since we began working as a value-add team (and then later as a formal team) for OpenView’s portfolio companies. I quickly realized that there was a veritable trove of data on our own operations over the last 4-5 years sitting in our various project management and collaboration systems, waiting to be mined and analyzed, exactly the way my own team would on any research and analytics project with the portfolio companies.
For example, since the beginning of 2009, we have used VersionOne as a firm-wide project management and tracking tool. Every single project is planned, tracked and its tasks archived in VersionOne’s robust database. Going back beyond that, since early 2008, we have used CentralDesktop as our central collaboration platform, and had made a commitment to store and organize all project documents and outputs on CentralDesktop. Looking back at the massive amount of data that we have accumulated over the last 4 years, I was grateful that we made those decisions back in the day.
My main questions were:
- What were the types of projects we worked on over the last few years? Did they change over time? Is there a pattern that correlates our work with the stage a portfolio company is at, or with the macroeconomic environment?
- How deeply does each portfolio company get engaged with OpenView Labs? Is there a time trend?
- How broadly is OpenView Labs engaged with the whole portfolio companies? Why do we work with some companies at some points, and with other at other points?
To answer these questions, I first built a comprehensive list of all project-based engagements we have done with the portfolio companies since 2007 (although OpenView Labs started in 2008, the Labs team members had been working with the portfolio companies on value add projects since the founding of OpenView in late 2006). I excluded the recruiting projects because of two reasons:
- The formal full-time recruiting function at OpenView only started in late 2009 with the arrival of Diana Martz. We had always engaged in substantial recruiting efforts for important roles at the portfolio companies before that, but never did at the same scale as with our full time Recruiting Team now.
- I did not have a chance to fully vet my list of recruiting projects with the current Recruiting Team, and so feel that they deserve a separate, later analysis that focuses only on the last 2.5 years when recruiting is a formal function at OpenView.
Because of time constraints and my inability to validate my lists with all team members at Labs, I am positive that I did not capture all of the projects that we have worked on, but after reviewing our records in VersionOne and CentralDesktop archives and matching them against the entries in my list, I am confident that up to 90% of the work is captured in my data set.
I also did not include one off advisory engagements and the quarterly forum that OpenView Labs organize for the portfolio companies, as my goal was to understand the Project-based consulting engagement that we did in the last 4-5 years.
The VersionOne and CentralDesktop data also helped me in classifying the projects engagement by the Types of Project (which I will explain in more details below), and a rough estimate of the amount of workload involved in those projects, relative to other projects (because our projects were planned and recorded in Scrum fashion, in “points” and “perfect hours”).
There were literally over 100 projects done with varying degrees of complexity and intensity. They fall under the following main categories:
- List Generation: Development of sales and marketing lists in specific segment per the portfolio company’s requests
- Market Research: Primary and secondary research and analysis on a wide range of issues: market segmentation, competitive landscape, messaging, strategic partnerships, M&A targets, customer feedback, software evaluation, marketing channels identification, keyword research
- Marketing Operations: Development and implementation of marketing processes and tools, or optimization of marketing channels or campaigns
- Operations: Improvement of back office operational issues, customer services, professional services, legal and contract review
- Product Management: Process development, management and optimization for product management, product development teams
- Sales Operations: Development and implementation of sales processes and tools, or optimization of sales channels. Note that this assumes that a sales team is already in place
- Sales Team Development: Development or relocation of sales team from the ground up, in particular inside sales and lead qualification teams
- Strategy Planning: Projects that support and facilitate Executive and Board level strategic decision making
As I have already explained elsewhere, there were many lightweight advisory engagements that went beyond these main areas of expertise that were not included in this analysis, simply because they did not become full fledged consulting engagements with OpenView Labs.
Here are some preliminary findings:
1. From 2007 to 2011, our most heavily engaged areas are: Sales Team Development, Market Research and List Generation.
2. While Sales Team Development has always been far and away our most significant engagement area, there are variations from year to year, and Marketing Operations and List Generation are also very important areas.
There is one important observation to make here: Strategy Planning projects typically engage 1-2 resources very intensively over a short period of time (2-3 days), and do not capture the overall amount of workload that is anywhere close to the Sales Development projects, which require ongoing supervision over an extended period of time or Market Research projects, which tend to have multiple team members engaged intensively over a period of several weeks.
3. OpenView Labs typically engages with a portfolio company immediately after the investment is made, and this engagement typically grows dramatically in the next two years, before dropping off in the 4th year, as the chart below shows (it charts relatively growth in workload over the first year’s engagement, averaged over all portfolio companies who have been in OpenView’s portfolio for at least 4 years).
The drop-off is actually what we hope for – over the course of 2-3 years, the engagement with OpenView Labs has helped the company execute its operational strategies, but also helped it in developing internal capability and methodology (through recruitment of key team members and knowledge acquisition/transfer), and thus does not need the support of the OpenView Labs project teams anymore. We like to see it as the outgrowing of the expansion stage of the portfolio company. Again, this is exclusive of the ongoing advisory that we provide, the engagement at the Board Level of our Venture Partners.
4. The last chart is a somewhat normalized estimate of the percentage of our portfolio companies that were actively engaged with OpenView Labs projects in any given year. It is a rough estimate because some companies went into the portfolio at the very the end of the calendar year, there would not be any opportunity for OpenView Labs to engage with them right then for that year. We also exited from Loyalty Lab in late 2010 and thus continued to consider them part of the portfolio company through the whole year.
This chart in a way mirrors the previous chart. The first crop of OpenView’s portfolio companies (Exinda, VersionOne, Attask, Loyalty Lab, Intronis and Open-E) came on board in 2007, and this batch continued to stay engaged with OpenView through the next 2 years, as we also added more portfolio companies, reaching a 100% engagement in 2009. The engagement with the first batch then drop off in 2010, even as we brought the next set of portfolio companies onboard (Kareo, uSamp, Prognosis, Skytap). In 2011, we continued the investment pace even further, adding Instructure, Mashery, NextDocs and Xtium to the portfolio, while starting to deeply engage with the crop of 2010, and thus the coverage percentage is rising again, and that is not including the constantly growing recruiting needs across the portfolio companies.
So what is in store for 2012?
If the trends are to be continued, we will have our hands full with many more engagements. Our core areas of expertise such as Sales Development and Market Research will continue to grow, while we also fully expect that we will engage on substantial projects in new areas such as Customer Service or Professional Services.
To support this, next year we are bringing on board 2 new recruiters: Katy Smigowski and Lindsey Gurian, welcoming back our former Sales Analyst Ori Yankelev in the role of Sales and Marketing Associate, and hosting a second Sales Execution forum in January of 2012.
For more information…
Read about OpenView Labs’ engagement models with our portfolio companies.
Read about OpenView Labs’ tools and methodologies.
Read our case studies for more information on specific consulting projects in the last 3 years.