My first company, Feld Technologies, didn’t have contracts. Instead, we had a one page PSA (professional services agreement) that spelled out in English that we charged $X per hour, would do our best, and our invoices were due upon receipt. We never had a single legal issue with a client, although we had a number of tense moments which we almost always solved successful by “doing our best.” There were a few cases where this wasn’t enough and our clients effectively fired us, but we always made it easy for them to walk away if they weren’t happy.
Since I started investing in 1994, I’ve been on the giving and receiving end of an endless number of contracts which often include SLA’s. I’ve seen every type of agreement you could imagine and at this point have become completely numb to the dance of a buyer and a seller of any type of product or service trying to get to a legal contract. As I’m sure many of you have experienced, the business terms are simple to work out, especially between rational people that want to work together. But once things get into “legal” or “procurement”, it’s a whole different issue.
The other day, I was on an email thread between Gnip and a new customer. Gnip recently launched v2.0 of their service and it rocks. They’ve held off on adding new customers for the past few months as they relaunched their service and are now starting to add new customers at a steady clip. In the email thread, they quickly agreed on pricing with the customer who then asked “what’s your SLA.” Eric Marcoullier, Gnip’s CEO, responded with the following:
Our SLA is fairly simple (and I’m happy to write it up for you in more official language):
- We can’t control data publishers’ availability, but if they’re up, we’ll get the data.
- Machines and clouds fail, even on EC2. If Amazon is up, we’ll get the data.
- The best way to guard against machine failure is duplicate hardware. We offer highly discounted backup boxes.
- You’ll always have my cell phone number — if our software breaks, you can call me 24/7 and I’ll get my team on it.
- If we aren’t living up to our end of the relationship, you can cancel the contract with no penalty.
The customer’s response was “You are class act! I wish all legal issues can be handled like this.”
Now, Gnip is young so Eric is in a position where he can still talk to any customer that wants to talk directly to him. However, as they grow, I expect this tone will exist throughout the business since it’s Eric’s style. Basically, keep it simple, be clear about what you will do, be available, and take responsibility for your service. I’m sure more formal contracts will find their way into the business but wouldn’t the world be a better place if more business was conducted this way?
Gnip has completed the latest version of their schema and is now about to embark on a campaign to integrate at least 100 services by mid year. They’ve decided that rather than simply choosing them by themselves, they’d crowd source the process.
There are currently over 350 web services in consideration with more being added every day. You can vote on which ones you’d like to see integrated by going to https://gnip.uservoice.com. This will be a dynamic process with Gnip tagging the web services that are either in process or completed.
If you build web apps for a living, consume data, or just like to vote on things, come help Gnip prioritize the next services to integrate.
Kevin Kelleher’s article on GigaOm this morning titled 2009: Year of the Hacker made me think back to the rise of open source after the Internet crash of 2001. In the aftermath of the crash, many experienced software developers were out of work for a period of time ranging from weeks to years. Some of them threw themselves into open source projects and, in some cases, created their next job with the expertise they developed around a particular open source project.
We are still in a tense and ambiguous part of the current downturn where, while many developers are getting laid off, some of them are immediately being picked back up by other companies that are in desperate need for them. However, many other developers are not immediately finding work. If the downturn gets worse, the number of out of work developers increases.
If they take a lesson from the 2001 – 2003 time frame, some subset of them will choose to get deeply in an open source related project. Given the range of established open source projects, the opportunity to do this today is much more extensive than it was seven years ago. In addition, most software companies – especially Internet-related ones – now have robust API’s and/or open source libraries that they actively encourage third parties to work with for free. The SaaS-based infrastructure that exists along with maturing source code repositories add to the fun. The ability to hack something interesting together based on an established company’s infrastructure is omnipresent and is one of the best ways to “apply for a job” at an interesting company.
We are thinking hard about how to do this correctly at a number of our new investments, including companies like Oblong, Gnip, and a new cloud-computing related startup we are funding in January. Of course, many of our older investments such as NewsGator and Rally Software already have extensive API libraries and actively encourage developers to work with them. And of course, there are gold standards of open source projects like my friends at WordPress and masters of the API like Twitter.
If you are a developer and want help engaging with any of these folks, or have ideas about how this could work better, feel free to drop me an email.