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Mark Suster interviews Howard Morgan of First Round Capital


Good discussion on First Round Capital, current trends in tech investing, Board composition, and more.

{ 1 comment… add one }
  • Lillian 5 Sep 2012, 6:10 am

    the difference beeetwn products and services is blurring particularly in the world of cloud computing. what is Salesforce, Facebook, Netflix (streaming) or Google. They created piece of software / product that they run for you (provide services). Such companies are as good product companies as traditional product companies like Microsoft or Oracle. Basab I guess differentiating beeetwn consulting / support services (something delivered by human beings) and cloud based services might make sense. the reason human driven services companies might need products is to create higher quality / sticky revenue stream. Agreed that you can differentiate enough in Services. However, if your business is driven by a resource (human being), that can leave and join competition fairly easily (unlike a piece of code), the business will have significant risks that will manifest in lower multiples (controling for other factors). Brand name, client relationships etc improves profitability and growth but they will not give the pure services business the type of control on revenue that products will give.BTW, Finacle is a good example of a product coming out of a pure Services company. Agree that such examples are few and far beeetwn because it is a different business altogether and requires a different mindset (e.g. much higher risk tolerance, deep pockets for R&D etc) and capability (e.g. ability to attract great engineers, UX designers etc) that services companies dont typically have.