SM: What stage are you at now? Revenue? Profitability? Traffic? Customers? Users? Any other metrics you track?

KR: We launched our service in Q2 of this year, and the response has been fantastic. We’ve already signed up our first set of paying customers, which is a great milestone for us.

Initially, our primary goals are based on reaching a certain number of paying customers. However, we are moving towards goals based on a key metric for an on-demand company: Monthly Recurring Revenue (MRR). A lot of on-demand companies focus on the bookings number, but that can be very, very misleading in a subscription service business like ours. MRR captures all aspects of the business: new customers, renewals, customer churn, discount amounts, and so on. At the end of the day, the goal is to have MRR increase by a certain percentage each month.

SM: How did you finance the different phases of the company? Seed? Angel? VC? Corporate?

KR: We decided to finance our company through VC’s. We have great investors from great firms. But, when we went looking for funding, our most important criteria was looking at the specific investor first, and then at their VC firm second. That is, to me, the person who will join your board is much more important than the firm they’re with. We wanted to make sure we had board members who were seasoned, who were insightful, and who we would be able to work well with. We’ve been very fortunate to have a board that has been extremely helpful.

SM: What financing stage are you at right now? Will you be raising more money? What timeframe? What is your ideal investor?

KR: Currently, the company is going through its series B funding round. The round should close in the near future but we haven’t settled on a specific date yet. We will definitely let you know when it does close however. Currently we have received funding from Benchmark Capital and Matrix Partners.

Our criteria of whom we choose to work with is similar to the previous round: focus on the individual, less on the firm. I want Board Members with great operating experience building companies, not just investing experience. I check references on VCs. I like to work with VCs whose portfolio company CEOs rave about them. Of course, this luxury only exists if you have more than one term sheet.

SM: What do you look for in your VC reference checks?

KR: I look for passion, not just some CEO being nice. I look to hear things like “If you have an opportunity to have this guy on your Board, and choose not to, then you’re an idiot …” I am also looking for VCs who don’t pound their fists when there is a problem, and start triggering executive team changes immediately. Instead, I want VCs who recognize and acknowledge a problem, and ask, “We have some challenges. How can I help tackle them?”

SM: Do you look for domain expertise?

KR: Not really. We have plenty of domain experience on the team.

SM: So who are your VCs? Looks like they’re stars …!

KR: Mark Kremer from Benchmark and Bob Lisbonne from Matrix.

(to be continued)

[Part 1] [Part 2] [Part 3] [Part 4] [Part 5] [Part 6]

SM: If I were to publish books through Blurb based on my blog writings, I would need to be able to have a paperback that sells for $5-6. I would also need to have a customized storefront on my site that seamlessly ties into yours, so that you can fulfill the order. Can I do that? Why, or why not?

EG: Today our books are not the text-driven, black and white paperback style books you reference, but rather highly illustrated, color books. The classic “trade paperback” is much, much, less expensive to produce as the paper is uncoated (does not need to carry color), the costs to print b/w are much cheaper than color, and of course paperback bindery is also less expensive that hardcover. In future, Blurb will offer this text-driven product, but not yet. In fact, we have a tool called Blog Flipper, with which you can easily convert a blog to a book. It works with WordPress, TypePad, etc.

SM: Yes, but for pure text books, you are not at the right price-point. People don’t pay $30 for a text book. That needs to be in the $5-$10 range.

EG: That is true. We will get there. We have invested big $$ in building out our bookstores and managing all order processing, fulfillment, customer support, returns, international shipping etc. We have also built a whole array of free online marketing tools to help you get the word out to your various online audiences. Some of these include Blurb Badges which you can customize and put on your blog or site, Bookmark It (recommend to social bookmarking sites like Digg and del.icio.us and more), Recommend It (integrated tell a friend) – as well as tagging, key words, online Book Previews (look in book) and more. Custom storefronts will be a premium upgrade from Blurb – but not yet available.

SM: I have another photo-book project which is a combination of poetry and photography. The photography is by a well-known photographer who is going to have a major exhibition at the Getty Museum. The poetry is mine. Let’s say we do this project with Blurb. We would like the books to be distributed through the major museum stores, as well as through Amazon. How would that work?

EG: Well, first, I would die and go to heaven if you do the project with us, since I am a black and white photographer myself. But to answer your question, you would use the Blurb client to design the book, and we can print and sell it on demand. Say we charge $30 per book, you can mark it up by $8-10 (or more), and you keep the entire markup. If you want to invest in larger inventory, we can also print it for 30% cheaper using Offset. That would require a 700 copy minimum order.

If you want to place it in Amazon, you can buy an ISBN number, and we will put it on the book, with which, any retailer can market you. The advantage of Amazon is reach. The disadvantage is that they take 40% of the retail price of the book, so you don’t make much money.

SM: Well, it was good talking with you. I am glad you are doing this. I hope you get to doing text books soon, as I am sure many of us, writers, would be happy to experiment with some blog books. I certainly will. And let me think about the poetry book

[Part 1] [Part 2] [Part 3] [Part 4] [Part 5]

SM: What are your top target segments?

KR: We are finding a lot of success with Sales Operations managers, VP of Sales and also the CFO or Director of Finance at small and medium size companies. Those with a slightly distributed workforce and who don’t want the hassle of managing the cost associated with traditional on-premise BI solutions have demonstrated the most interest thus far. Some of our current customers include 3PAR, Ingres, KACE and Black Duck software. And, since we only started selling LucidEra in March, I’m really happy with the adoption rate. We also find the manufacturing vertical is very interested in on-demand BI services.

SM: How did you penetrate the market and get early traction?

KR: I think it certainly helps to have a compelling solution that people can try and get up-and-running in no time. It’s the best way to get traction. Once people try LucidEra, the proverbial light bulb goes off and it’s exciting to watch. The amazing thing about the SaaS model is that the product is simple to use, simple to set-up, and simple to buy. Why wouldn’t you just try it to see if our solution can add value to your business? It’s a no-brainer in my opinion.

I think another plus we have at LucidEra is a strong executive team that has the right experiences to take us to the next level. For example, my own background has prepared me to take on some of the more established big vendors in the space. I saw first hand while running the OnDemand CRM business at Siebel, just how conflicted the company was trying to sell an in-house enterprise software product, and an OnDemand product. Traditional enterprise software companies have such a different DNA that traditional players like Business Objects, Cognos, SAP, etc., could never fully execute in the SaaS market.

SM: Are you part of Salesforce.com’s AppExchange? Are they sending you leads?

KR: Yes, we get a lot of leads from the AppExchange. We also work with other vendors like NetSuite, Oracle Financials, Great Plains.

(to be continued)

[Part 1] [Part 2] [Part 3] [Part 4] [Part 5]

By Richard Laermer, Guest Author

Let me just explain that heading, please.

Responsibility has become a buzzword. And I think it’s got to be known for more than just good psychology.

<

p>Here’s my question slash quandary: Why can’t people be careful when it’s only going to get worse for them? Why o why. Sure, you heard your parents mumble that one time or another. But I’m talking about writing. Almost everything I read has errors in it—and not because MS Grammar Check stopped its magic. I see a lot of carelessness emanating from people thinking (I think) someone else is going to make the document perfect.

Who is this someone else? Typos are mistakes you have to catch. While everyone makes minor goofs, I see major ones all the day and they’re uncanny. I’m here to ask every marketing professional to take a third and fourth look before hitting the Send key or printing on super-fancy copier paper.

Some say it’s the fault of e-mail. Sounds like a big excuse coming on. People pass their documents back and forth and add rather than correct. Since I am part of the last generation who once used typewriters and rejoiced at the invention of White Out ™, I place blame on those large monitors on our desks. There’s no way you can catch a boo-boo onscreen, but most folks won’t print out the written work. Such bother.

Today things travel casually, desk to desk, until the work goes out without someone realizing, “Wait, wait. That’s supposed to say AUNT.” (That’s a private joke for Curb Your Enthusiasm fans.)

I am a kind of typo-savant. I see them out of corners of my eyes. As a matter of fact, where my mate and I live part-time outside LA we laugh at crazy errors on “cable ready” Time Warner ads constantly. I see them in staff and management reports—I was born a proofreader—where folks create documents using wrong words, or worse, being grammatically incorrect (GI). If an author doesn’t even bother to use Spell Check I know s/he is simply damn sloppy.

Recently I have come undone by some doozeys that found their way to me from unexpected sources. Witness: LA Times: Late last year for many months there was a front-page Cars section advert that is nearly a quarter of a page; it actually says LOVE WHAT YOUR DRIVING.

Re/Max calendar: I got it in the mail—a mean feat because it was octagonal and printed with verve and style. Problem: The proud real estate professional calls herself YOU’RE DESERT REALTOR (I’m not one!).

South Florida CEO magazine: For this I bought a frame. It calls John Murphy (who knows) the man behind MURHPY’s LAW. Read that twice. In case you haven’t seen it, this periodical is glossy and expensive.

Showtime: In announcing the first episode of The L Word the words blaring onscreen spoke of the upcoming PREMEIRE. It was sad.

I’m not going to get into the incorrect usage of “less” and “fewer” in multitudes of costly print ads, nor the occasion a few years ago when The New York Times ran a Sports Friday section on Saturday morning.

<

p>OR the other day when the Daily News ran the wrong caption of Obama under a guy stuffing his face for a promotion (not the Senator).

Uh-uh.

Books are worth discussing, since most are edited “from afar,” where committees babble haughtily about plot or mis en scène or arc. Non-fiction tomes are merely about the phrase everyone can use at cocktail parties (like, err, Blink). But gosh, most of them have so many freaky typos. Recently, I read one called The Middle Mind where a biggie publisher allowed well-known words like Schrek [sic] to be misspelled. The subtitle is “Why Americans Don’t Think For Themselves,” which means Middle is real open to criticism.

A few years ago a cool book on how companies steal corporate secrets contained so many made-up words (Exon, as in Valdez) that I had to put it down. Editors don’t feel like taking their time, even if that’s their job, I guess.

All that cash lobbed at voluminous printing and giant ad campaigns and expensive promotion and oft-appearing marketing, and what does it do in the end? Turns people who notice errors right off. In cases like mine, products or parent companies are never purchased (from) again.

I definitely make mis-steaks. Yet I don’t trust my under-caffeine-ated self and hand my work to others who see with a critical eye. Don’t people fear ridicule? Not during the era of blamelessness. These are days when people say, “Yeah well I have a reason” and refuse to accept a scintilla of fault. Think about it the next time you hear someone exclaim, “My bad”—an over-used phrase developed by a generation of entitled mini-thugs. It is iconic of the ages. A guy won’t say “It was my fault” and can’t admit “Oh, I’m bad,” or, heaven forbid, apologize. Instead he’s coining words gently to make fun of the fact that he screwed up. Ha, ha.

I’m not trying to be Joyce Brothers. I just like to read, look up, and watch TV without observing typos that stop me cold. To some, it sounds like bellyaching or preciousness. Yeah, let’s live by Apathy Rules: giggle and say whatever. But being careful and slow is in order during strange times: See the economy go haywire, a wartime President that is seemingly unstoppable and bizarre, and our entertainment written for 11 year-olds… why not spend some quality time concentrating on the slippage we produce!

I paraphrase Tony Soprano’s shrink in a third season episode: Indeed Americans get caught up in the little things. The big ones are all taken care of, and so we’re lucky; we have that ability to focus.

Dr. Melfi was spot-on. We got it all, and then some. Alas, life gets sweeter when you pay attention. Regardless of what OutKast says, there’s still that chestnut about the roses being smelt.

A long time ago a friend e-mailed me. “Focus and concentrate,” he said. “Everything comes together.” That’s such great advice. I’m glad he took the time to spell it out.

I’m Richard Laermer, author of Punk (www.PunkMarketing.com) Marketing. My next book is “2011,” about the trends affecting us as we move onward–and happily so.

SM: Describe the value proposition of LucidEra, including differentiation versus the rest of the market.

KR: LucidEra combines sales and financial data to give users at small-to-mid sized businesses powerful insight into the effectiveness of their entire sales operations process (including quotas, pipeline, revenues, and expenses). We firmly believe that just like the everyday consumer who has vast amounts of information at their fingertips through various websites, people should have the data they need to be successful in their business lives as well. It should be considered an employee’s right, not a privilege, to have this level of visibility into their business. In the existing BI market today, the average employee simply does not have this. No one should have to work in an environment where the right information is not readily available.

Our key differentiator is that we deliver a complete reporting and analysis solution entirely on-demand.

SM: How big is the market? How do you calculate TAM?

KR: Since we are re-inventing the Business Intelligence market, our market is essentially the Business Intelligence market (which has focused on enterprise customers) plus the midmarket which traditional BI vendors were not able to address. Below is a graph of the BI market size.

(to be continued)

[Part 1] [Part 2] [Part 3] [Part 4]

I promised B:C entrepreneurs that if I saw any silver bullet that might help you bootstrap your ventures and access consumers quickly, I will be sure to flag you. Well, here’s one.

Last week, I spoke with Rearden Commerce, a company I have covered before. They showed me an implementation of restaurant reservation service OpenTable, which they are bringing to their 500 odd business customers, and consequently to their 100,000 users.

What I found exciting about this is that this is an example of a B:B:C consumer marketing strategy that can be highly effective, and it appears to me, that Rearden is offering a great platform to make this happen.

Later, I referred an entrepreneur to Rearden, who I thought had a service (Managing Take-out Orders for restaurants) that corporate employees tend to use, to Rearden, as a test case.

I strongly encourage you, if you have a similarly relevant service that can be marketed in a B:B:C framework, and incentivized with a corporate discount of sorts, to test this opportunity.

Some examples:

• Financial Services like Personal Banking
• Healthcare Services like Personal Trainers
• Career Management Services like Coaching
• Travel Services like Group Travel
• Personal Services like At-work pick-up and delivery of dry cleaning