Learning to respect my gut feelings again

A “gut feeling” is, at a deep level, a fundamental sense of something that you can’t necessarily ascribe metrics to, you can’t quantify exactly. Its not always right. Its a subconscious set of facts, ideas, concepts that seem to suggest something below the analytical portion of your mind, and it could bias you into a particular set of directions. Or you could take it as an aberration and go with “facts”.

As an entrepreneur, I’ve had many gut feelings about what to do, when to do it. They aren’t always right. But when they are … they are usually whoppers.

In 2002, when Vipin and I were in his lab looking at 40 core DSP chips, and speaking aloud about building accelerators out of them … that was a gut feeling that the high performance computing market had no other choice than to go that route to continue to advance in performance. We built business plans, architected designs for the platform, pricing models, went to investors, told them things that later turned out to be remarkably prescient. No one saw fit to invest unfortunately.

This has been a feature of my career. Many very good ideas, that later turn out to be huge markets, developing almost exactly as we speculated, and we can’t get investment. Its fundamentally, profoundly frustrating. Not to mention discouraging. But we soldier on.

In 2005, when we had sold the concept of remote computer cycles (what was to be later called “cloud”) to a large company in Michigan, again, we tried to get investment going. We had a large committed customer, a good business model, a good operational model, even some investors lined up if we could get the state of Michigan to commit as part of its tri-corridor process. They only need have put in a token amount, and thats all we needed. I need not tell you this didn’t happen, and the reasons given were, sadly, laughably wrong at best.

Our gut feelings on both of these markets were that they were going to be huge.

To put it midly, we were right. Very very right.

The next epiphany was on the cluster and storage side. We’d been designing and building clusters up until then with embedded storage. Dell decided it wanted to own clusters, and it worked on depriving the small folks of oxygen with pricing gymnastics. It was easy for them to write off coming in under cost on clusters, much harder for a small outfit to justify paying a customer to take hardware. My gut feeling at the time was that clusters would become an impossibly hard market to work in, so we focused upon where we could add our unique value. Storage and storage based systems it was.

Along the way, we’ve seen many opportunities, some looking very good but bugging me something fierce, and some looking bad on the surface, but having the qualities that we needed. So I went with my gut on whether or not to pursue those.

And we’ve grown, by quite a bit during that time. There is much to be said for subconcious analytics.

As we’ve grown, we’ve brought on more people to work on opportunities. Recently we’ve had some opps and we’ve serviced them, which have run strongly against my gut feeling. As we’ve seen these evolve, my gut was right, they’ve turned into (in some cases) bad deals for us.

Also, as we look at our capitalization efforts, I get similar feelings about particular directions and potential investors. I don’t mind lots of legalese. We have lawyers to deal with that. I mind games. If people play them now, it will be worse later on. If they won’t act in reasonable time frames and with reasonable terms, we need to move on.

Its this gut feeling that has served us very well, that I temporarily overrode in the past … that I am bringing back in a big way.

We met with an erstwhile customer at the SC14 show. Makes great promises, sets additional hurdles. Never does business with us. I’d like to, but the cost of chasing this customer may simply be too high for us, for little return, at this stage of our life. If we were bigger, it would be less of an issue. If we had a large investor with a lot of committed capital in us, again, less of an issue to act on working with them. But we don’t as of yet. We have a particular hand of cards we can play, and some we need to discard in order to improve our hand. As much as I might like to play this hand with that card for that customer, my gut tells me to wait.

Its tough, but I’m going back to my gut feelings on these. For customers, for investors, whatever. If I don’t get a good feeling, or if I see actions which on their own might be innocuous, but collectively would be predatory, I’ll rethink working with them.

The gut feeling is all about the value prop and the ROI on effort. Sometimes its dead on. Far more often for us than not. Its time to use it again, in the large.

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