US Private EquityThere is a good article on the Mercury News Blog today on How dot-com start-ups have changed 10 years later.  The article addresses the maturity of both technology companies and US private equity investors over the last decade.  It is an interesting read.

There has been a lot of activity in angel investor groups and venture capital investments in Indiana technology companies over the last few months.  2010 has definitely started with a bang at Alerding Castor Hewitt where we have helped five companies secure funding this calendar year.  I am traveling with two technology clients in a couple of weeks to meet with investors in Southern California. 

Still, the same rules apply when seeking funding.  An early stage company looking for funding must prove:

1.    Management Team (including expertise in field and proven financial and leadership ability)
2.    Market Opportunity (including the need, ability to meet the need and scale)
3.    Investment Opportunity (is the expected return worth the risk of investment)


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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.


Your friendly neighborhood technology legal counsel here:  One of the greatest aspects of our firm is the fact that we, as attorneys, get to partner with our clients to assist in the development of their dreams.  Additionally, while we focus on being the general counsel for all business types and sizes, one of my personal areas of passion is seeing new technology based clients develop and partnering with them to see their success. 

One such emerging company that I'm happy to say we are partnering with is Den of Deliverabilty (www.denofdeliverability.com) ("DoD").  DoD is a start-up for which we've done SaaS legal consulting.  They are focused on assisting their clients in getting their e-mail messages to the end user and drawing the distinction between "ham" (mail that people requested and want to receive) and "spam" (unsolicited commercial electronic mail).  This process can be much more arduous that one might initial think, but luckily, DoD can help any business maximize their marketability through the proper use of commercial electronic messaging. 

I'm very excited to see this company take off.  They have great ideas and really cool software components that I think are going to be essential to any business.  And just for fun legal disclaimer (what do you expect, I'm a lawyer) as I mentioned, I, and this firm, have done legal work for them, but we are not otherwise compensated by them.

So if you think this is something that your business might benefit from, check these guys out.  


Indiana Probate Litigation, Indiana Entrepreneurial LawCongratulations are in order to Brian Hewitt, the newest parter of Alerding Castor Hewitt, LLP, who was recognized this week as one of Indiana's 2010 top 50 Super Lawyers.

Brian concentrates his practice on estate, trust, and guardianship planning, administration, and litigation; and mediation and business law.

He is a Certified Estate Planning and Administration Specialist, a Fellow of the American College of Trust and Estate Counsel, and a member of the Probate Litigation Committee of the American College of Trust and Estate Counsel.  

Brian has spoken widely at continuing education seminars on estate planning, business succession, litigation, and mediation.


Congrats Brian! 

We are proud that you have chosen to join us as a named partner of Alerding Castor Hewitt, LLP, an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.



Business LawI have taken a few weeks off of blogging.  Honestly, I felt like I needed the break, but I am excited about getting back on the saddle and writing again.

Since it has been a few weeks, let me give a brief update on what we have been up to.  Alerding Castor Hewitt has had an exciting beginning to 2010.  On January 1, Bill Boncosky joined us.  Bill is a business attorney / technology and SaaS law attorney working with privately held companies, primarily in technology industries.  Bill has spent the last seven years as General Counsel at ExactTarget.  We all have much to learn from him and are thrilled to have him as part of the team.  The IBJ put out a nice article in January on our firm's focus on entrepreneur law and Bill's joining us in this field.

This week Scott Kreider joined our business litigation group.  Scott adds to a team headed up by Mike Alerding that handles a difficult and necessary discipline for any full service business law firm – handling business disputes.  It is great to have him aboard.  Also, Mike made the IBJ's 40 under 40 the other week.  Good stuff.

Over the last few weeks our firm has helped four clients through capital funding processes - three from angel investors or private equity firms and one from a venture capital firm.  It is always encouraging to see business clients grow, and we count it as an honor to be part of their process.

We have also been involved with many businesses and business owners through customer deals and strategic business growth matters.  We will write more on some of those matters in future posts.  

I was a guest lecturer the other week at Purdue’s entrepreneurship capstone course.  Man I felt old, but I was very encouraged by the enthusiasm, drive and smarts from this class.  

So there is the fire hose version of the last few weeks.  2010 is off to a strong start for ACH.  I am looking forward to what is coming down the pike.


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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.

SaaS Litigation, SaaS Legal Consulting, Software Litigation, ASP LawKeeping up with software clients can be a challenge for technology legal counsel.  

The software as a service industry evolves quickly, time-lines are condensed, and the playing field yesterday can look decidedly different than it looks today.  The name of the game for a SaaS company is to stay ahead of the pack and become known as THE leader in its industry. 

I recently read an article in Entrepreneur magazine about Search Engine Optimization titled What You Don't Know About SEO

What I DO know is that many of our clients could have written this article. 

For those of you interested in Internet marketing, here's an excerpt about targeting keywords to help drive search results that our friends over at Compendium Blogware could have written:


"Google, of course, is the web-search alpha dog. But all the others--Bing, Yahoo, Ask.com, Lycos--are sniffing out the same stuff.

What gets their attention? Good, fresh, focused content. Adding a blog is one of the easiest and most straightforward ways to bulk up on content. If you sell hair-removal devices, for instance, start a blog that explores all aspects of waxing, plucking, threading, electrolysis and so on. Over time, your site will accrue searchable heft.

The trick is to be hyper-conscious of your keywords. For example, if you want web surfers on the prowl for "eyebrow waxing" to find your site in search engine results, organically work the exact phrase "eyebrow waxing" into each blog post (maybe multiple times), and use it on all static pages related to eyebrow waxing. Lather, rinse and repeat with every term and phrase you want to rank for.

Before you start writing content, though, research and plan your keyword attack. Is geography important to finding your customers? Then maybe "California eyebrow waxing" is the phrase you want to home in on."


Just a brief example of the world I'm living in by working in the area of SaaS legal consulting, I have the absolute privilege of working with high-tech, fast growing companies.  Truly partners in success, I and the other attorneys of Alerding Castor Hewitt, LLP who practice in the area of technology legal counsel welcome the challenge of keeping up with the pace of this industry.

SaaS litigation, software service level agreement, cloud computing lawHow many times have you signed up for a service on-line, scrolled past all the legal jargon, and clicked "I Accept" or "I Agree" without taking the time to actually read the terms and conditions you're agreeing to? 

Admit it.  We all do it.  

But, just as a warning to be careful the next time you're purchasing that new mp3, or more importantly signing your company up for something on-line... those shrink-wrap and click-wrap agreements have been held by the courts to be binding.

Contracting in cloud computing law doesn't necessarily require a signature these days.  An affirmative acceptance of the provisions of a software service level agreement by an authorized agent can be given with a click of a button.

Take the recent trademark infringement case of Appliance Zone, LLC v. Nextag, Inc. for instance.  Although this case was dismissed on grounds of jurisdiction (which, incidentally, was a term of the shrink-wrap agreement that was held by the court to be an effective document) the court discussed some important software litigation surrounding click-through agreements within it.

In essence, if the facts support a claim that a person (a) is authorized to enter into such a contract, and (b) had the intent to enter into it, then they will be held to terms of service they signed up for, including basic contracting terms such as jurisdiction, venue, etc, etc.

The court in this case cited Gallent Ins. Co. v. Isaac in ruling that there was authorized conduct that clearly demonstrated the acceptance of a valid contract by the 19 year old website manager of Appliance Zone who registered the company as a merchant on Nextag's website and clicked "I accept the Nextag Terms of Service" as part of the process.

While the enforceability of a contract can be destroyed with factors that make it unconscionable (such as inequality of bargaining power, or unreasonable or unknown terms) the court did not find those arguments sustainable in this case for a number of reasons, including the fact that clickable acceptance has become commonplace for on-line retail, and the registration process could not have been completed without the click-through acceptance.

The court in this Indiana technology litigation case fell back on Paper Exp., Ltd., Micrometl Corp. v. TranzAct Technologies, Inc. with the "fundamental principle of contract law that a person who signs a contract is presumed to know its terms and consents to be bound by them." 

Next time, before you click "I Accept" make sure you really do.


FOR IMMEDIATE RELEASE
February 4, 2010
Contact: Lainey Scheetz
317.403.9012
lscheetz@alerdingcastor.com

ALERDING CASTOR HEWITT LLP PARTNER NAMED TO FORTY UNDER 40

Indianapolis, IN – Alerding Castor Hewitt LLP is pleased to announce that Michael Alerding, a partner at the firm, has been named to the 2010 Indianapolis Business Journal’s Forty Under 40 list.  The list recognizes local business and professional leaders who have achieved success and excelled in their field before the age of 40. Those honored have demonstrated leadership, initiative and dedication in pursuing their careers, and are likely to continue to achieve in the future. 

David Castor, partner at the firm states, "Michael has served the professional and civic community of Indianapolis for many years.  I am proud to be a partner of his as he brings with him a strong commitment to our vision while balancing that with a solid family life.  Michael represents what we should all strive for - personally and professionally."

Prior to forming Alerding Castor Hewitt, LLP, Alerding was a partner at Sommer Barnard PC and Bingham McHale LLP. 

A 1989 Cathedral High School graduate, Alerding received a bachelor’s degree in journalism from Indiana University before pursuing his law degree at IUPUI.  He was admitted to the state bar in 1997, the same year he graduated with honors. 

Alerding is a husband and a father of three young daughters.  “I don’t need to make a whole lot of money nor do I want to necessarily,” he said.  “The desire to feed my family is what gets me out of bed in the morning, and everything I do is for the sake and purpose of my family.”

Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.

 


For SaaS companies, the customer agreement is critical.  Why?  A SaaS relationship is not a 1-time purchase of software to be installed.  The SaaS customer agreement is a document which will govern (what you hope will be) a long-term relationship with your client.  It must cover the software license aspect of the relationship, the ongoing maintenance, upgrading and use of the software and - often overlooked - the professional services to be provided by the SaaS company to the client.  The standard software license agreement is simply not sufficient.  And please do all you can to talk your REALLY BIG client from insisting that you use a form purchase agreement.

I recommend a "Subscription Agreement" for the use of the software.  This makes it clear what you are providing to the client - not a license to use software but access to a service during the subscription period.  The SaaS client must also consider the relationship professional services play and the nature of the SaaS service being provided.  Each will require customization of your SaaS customer agreement.

SaaS legal consulting requires a novel approach to client agreements.  Knowledge of ASP law, SaaS litigation issues, cloud computing law, etc. is just a start.  Make sure you discuss the unique nature of your SaaS service with a experienced SaaS law counsel so that you put the best agreement possible in front of your clients.

Alerding Castor Hewitt, LLP, Indiana Technology Litigation, SaaS LitigationAlerding Castor Hewitt, LLP is proud to announce the addition of Indiana technology lawyer Bill Boncosky to the firm. 

The former General Counsel for ExactTarget, Bill has tremendous experience as technology counsel for one of the most successful technology start ups based right here in the heart of Indianapolis.  A company that had just over a dozen employees when he joined, Bill has substantial experience in licensing agreement negotiations, ASP Law and Cloud Computing Law serving in that role for over seven years.  He will be able to provide significant guidance based on solid experiences to many of our clients operating within this industry.

If you're looking for SaaS legal consulting, the attorneys at Alerding Castor Hewitt, LLP can help.  The newest attorney to join the firm, Bill Boncosky, is no exception.

Entreprenurial Law - Accelorator ProgramClosing in on the end of 2009 I have to say that I am quite pleased with the commitment Indiana showed this year to be a State that supports and promotes innovation, entreprenuership and business growth.

This week I had breakfast with Larry O'Connor, Executive Director of Butler University's Business Accelerator.  Larry is a former CEO of Bank One Indiana.  Following his "retirement", Larry became CEO of The IndianapolisMuseumm of Art, and recently took the position to lead theAcceleratorr program.

On the program's website, Larry describes theAcceleratorr as follows:

Operationally, the Accelerator is a consulting business designed to serve middle market companies in Central Indiana. Teams of professional consultants, faculty and students work directly with these companies - helping them to grow and simultaneously providing a living laboratory in which undergraduate and MBA students learn and experience real business problems and situations.

While Butler is continuing its work with mid-market companies, 2009 also showed growth of incubator programs and the birth of new angel investment groups in Indiana.  As an entrepreneurial law / private equity attorney, the health of these groups means a lot to me in terms of support and growth of my clients.

2009 was a strange year for businesses.  Private capital was hard to come by due to economic constraints.  Lending was tight.  The corporateenvironmentt seemed to be mired by corporate fraud (Madoff, Durham).  Despite all of this, Indianapolis proved to be a great place for businesses to launch and grow. 


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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.


Indiana Technology Counsel, SaaS Legal ConsultingEmployers invest so much time and effort into (a) finding and hiring the right candidates for the team, and (b) developing those individuals to work at their most efficient levels for the company. 

Let's face it, it can take years to get a company up and running effectively, and certain key individuals play a huge role in making that happen. 

You don't want to lose them.


While I firmly believe that everyone is replaceable, some employees are just harder to replace than others because they add so much value.

Give them an incentive. 
One option is to tie their salary to the success of the company.

Instead of traditional stock options (which could make it difficult down the road should the employee leave the company for any reason) business owners may want to consider offering certain individuals profit interests.

Not only would it build loyalty and increase an employee's desire to see the company succeed, but the company owners would retain all of the equity interest.


A bit simpler than stock options, profit interests are typically tied to employment and end upon the employees departure.   This eliminates employers dealing with minority shareholders and the host of issues that may arise from them.

Alerding Castor Hewitt, LLP is an information technology law firm that has helped dozens of start-ups with their business and legal needs, including documentation for profit interest agreements.




The other day I wrote a post on my reasons not to use the term "affiliates" in licensing agreement negotiations.  See post here.  My general point is that the term has no common meaning in the law and may create ambiguity in the contact.

I addressed several different definitions of the term in laws, but the term is not only defined differently in law, it is also used differently in business.

For accounting companies, for instance, the Interstate Commerce Commission defines the term as companies controlled by the accounting company alone or with others under a joint agreement.  So, “affiliates” falls outside of typical entity ownership structures and to companies with controlling interests through contractual relationships.

In the banking industry the term is commonly used to refer to an FIB which processes credit card data for other financial institutions or financial institutions that issue MasterCard or Visa cards.  The term here has nothing to do with ownership structures.

In television and radio industries, affiliates are companies not necessarily under common ownership which have contracted with a network to broadcast its programs.

In the Internet world a marketing affiliate refers to a company who links to another company via a weblink which then allows the hosting company to obtain a commission on sales made as a result of user’s clicking through that link.

"Affiliate" is a term that is used in contracts when the parties want to refer to an entity relationship but do not want to take the time (or don't know how) to define it.  Again, it is best to avoid this term, but if you must use it, make sure to define it clearly in the contract. 



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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.



Google announced in its blog today that Los Angeles has officially switched to using Google Apps for e-mail and collaboration.  34,000 city employees will now be using the Google cloud to do their work and, more importantly, their communication.  This is a substantial development in cloud computing law.  This will highlight the pros and cons of cloud computing for the future,and is likely to shape the success of other municipalities going the same way.  Data issues and privacy litigation is likely to start popping up even more predominately related to the cloud.  Plus the bloggers will get to continue to discuss the impact of Google taking over the technology world. 

Overall, I think that cloud computing is the future, but as a technology legal counsel, I can't help but watch this development with youngster-like anticipation.  As goes the cities, so goes the country.  Keep your eyes on the horizon for developments from this jump by L.A..  The litigation that is possible from this decision by L.A. will be delectable.    


There are several scope of license issues to work through when handling license agreement negotiations.  In my SaaS law (SaaS legal consulting) practice I often see licensees wanting to open the scope of the license to its “affiliates”. 

For many larger SaaS customers this makes sense as these businesses often operate as families of companies rather than single operating entities.  The customer may need to open the license to its other companies in order to properly use the software.  Just last week I was negotiating a Software License and Services Agreement with a Fortune 100 company that has over 50 companies in its U.S. operations alone.  They needed SaaS user seats for most of these companies.

The problem with the term “affiliates” is that it is not precise and may mean different things to different parties.  Some contract terms have clear legal meanings.  For example, “subsidiaries” commonly means companies which are owned and controlled by another company.  “Parent” commonly means the company that owns the subsidiary.  “Joint venture” commonly means a contractual relationship between two companies to engage jointly in a particular operation. 

“Affiliates” does not have a common meaning for most contractual purposes.  At the highest level the term points to a working or organizational relationship between two companies, but it is unclear how related the two companies have to be in order for them to be considered affiliates.  For example, are joint ventures affiliates?  Are management companies or consulting companies affiliates?

The term is defined differently in Federal and State laws and by legal dictionaries. 

The Banking Act of 1933, for instance, contains a very broad definition as any organization that a bank owns or controls by stock holdings, or which the bank's shareholders own, or whose officers are also directors of the bank.  This definition is probably much broader than most licensees intend and most licensors are willing to accept. 

The IRS defines the term much more narrowly (for purposes of consolidated tax returns) as a group of companies whose parent or other inclusive corporation owns at least 80% of voting stock.  This definition may be more narrow than the licensee intends.

The Investment Company Act defines “affiliates” as a company in which there is any direct or indirect ownership of 5% or more of the outstanding voting securities.  I am not sure if any licensee or licensor is intending that precise scope when using the term.

Black’s Law Dictionary defines the term broadly as a corporation that is related to another corporation by shareholdings or other means of control.  By that definition a management or consulting company could arguably be considered an affiliate.

The Ninth Circuit court recently adopted the Black’s Law Dictionary definition as it applies to the TCPA (an opt-in privacy law related to telephone marketing), but interestingly, the court also determined that because there was no direct contractual relationship between the two companies, they were not affiliates.  Thus, the court apparently also needs to see a contractual relationship between the businesses for them to be affiliates.

Finally, a note for Indiana technology companies – Indiana Code 23 (the Indiana business statute) does not define “affiliate” and Indiana courts have not yet addressed the definition in a business structure context. 

You see the point.  The term is messy – which is why it should be avoided.  The point of contracts is to be clear and avoid ambiguity.  This term can create ambiguity and lead to unnecessary disputes down the line. 


Something crossed my screen today that piqued my interest.  That concept is competitive keyword advertising litigation.  The case that sparked my curiosity is Fair Isaac Corp v. Experian Information Solutions, Inc., 2009 WL 4263699 (D. Minn. 11/25/2009) (www.jurisnote.com/Cases/fair6411.pdf).  For a good analysis of the ruling see Eric Goldman's blog (blog.ericgoldman.org/archives/2009/12/competitive_key.htm).  Interestingly, the case law to date on this issue has found for the defendants in most cases, but it makes me wonder about the legal theory, specifically  why this isn't more widely explored and if the average entrepreneur is even thinking about this.

The concept, boiled down to very brass tacks, is that the owner of a valid, distinct trademark whose mark is being used by another party for use in competitive keyword advertising that cause confusion to the consumer may have an equitable remedy.  This stems from the Lanham Act.  There is some question of whether actual confusion is necessary, but it is obviously going to help if one can show actual confusion.  Thus, the elements are (1) ownership of a valid, distinct mark; (2) use of that mark by another party; (3) in a manner that is likely to lead to consumer confusion as to the source, sponsorship or affiliation with the mark.  Now take those elements and apply them to competitive keyword advertising.  So, if I use a mark as a keyword in order to increase my on-line exposure, but do so in such a manner that it creates confusion, I can be liable to the holder of the mark and the remedy is an injunction against my use.   

Now, to date, courts have found in favor of the defense, but I can see on the horizon a court that does find confusion.  In the Fair Isaacs case, the court discredited the plaintiff's expert (I'd love to know what he said that the court determined lacked credibility and if Fair Isaac's is going to ask for their money back in light of the court's ruling).  But, how far away are we from a case in which the Court is persuaded.  I think it will only take one or two court rulings before this becomes a more readily available and pursued cause of action.  As companies increase their on-line presence and efforts to obtain competitive advantage through mechanisms like keyword search terms, the chances of confusions increase.  As those chances increase, the possible success of this type of litigation increases.

The implication to the entrepreneur is that the knowledge of this principle can be useful in an offensive and defensive posture.  Offensively, if you have a mark, you need to be vigilant in your oversight of how that mark is being used and if you determine that it is being used by other parties in keyword usage that will confuse consumers, you need to make sure you have your evidence and move quickly for injunctive relief.  Defensively, as your business develops its marketing strategy and using keywords you need to be cognizant of the fact that, if you are using a trademarked item, you are doing so in such a way that confusion will not ensue. 

Overall, I think that this another example of the potentials in Internet litigation.  This is a  cause of action that arises, in my humble opinion, only in the technology age.  Because search engines allow for large keyword grabs, this type of confusion can (and likely will) arise, and in doing so, infringement and litigation has (and will) also ensue. 


New technology businesses usually face two hurdles to get their product to market.  The first is proof of concept.  The second is proof of scale. 

Both are intended to solve the “Ability” stage of the business plan process and move the business into the "Meeting" stage:

Recognition of Market -> Recognition of Market Opportunity -> Ability to Meet Market Opportunity -> Meeting Market Opportunity at Profit

Proof of concept is simply the proof that the business can develop a working prototype that solves the market opportunity issue.  For a software licensing company this will be development of a bare bones software program, usually without user interface design or additional back end functionality.  It solves the most basic questions of whether the contemplated design will meet intended functionality. 

Proof of scale is the initial to-market phase that proves the business can scale the technology (or good or service) to satisfy the market opportunity at a profit.  Some of the issues to address at this stage include:
  • Adequate capital
  • Quantifiable customer demand
  • Number of sales force required
  • Adequate supply chain (in terms of cost, quality and time)

After proof of scale is satisfied, a business is usually in a more stable mode with its product (or service) satisfying the market opportunity at a profit.

As an entrepreneurial law / SaaS law attorney, I have helped several clients work through these and many other issues in the “proofs” stages.  I find that few business fail to address the proof of concept stage well, but many ignore issues in proof of scale.  One of the key issues to address early is quantifiable customer demand for YOUR product as many of the other issues spring from this one.



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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.


Indiana Internet Litigation, Indiana Technology CounselSo you've launched your company and hired a web-developer to breathe life into the idea you've poured your heart and soul into developing over the past several months, perhaps even years...

Maybe you never even thought to ask the question, but at the end of the day who actually owns "your" website?  You or the web designer?

Indiana software litigation in a ruling by the Supreme Court of Indiana, Conwell v. Gray Loon Outdoor Marketing Group, points to the fact that hiring a contractor for the development of content and programming of a website is considered a service rather than a purchase of a good.

In this case, the Indiana Supreme Court ruled that the independent contractor owns the property, while the hiring party owns a non-exclusive and perpetual license to use such property, unless of course, there is an agreement specifying otherwise.

Looking towards prior Indiana technology litigation the Supreme Court applied the definition of an implied non-exclusive license to the development of a website:

An implied non-exclusive license is granted when (i) a person (the licensee) requests the creation of a work; (ii) the creator (the licensor) makes that particular work and delivers it to the licensee; and (iii) the licensor intends that the licensee copy and distribute the work.

This definition applied to the facts surrounding the website development in this particular case ultimately led the court to its conclusion.  

So, expect this to be the case (at least in Indiana) the next time you hire a webdesigner for your next project: upon final payment, the webdesigner owns the property, while you own the right to use it... forever. 

(Unless, of course, you involve technology legal counsel first and negotiate otherwise.)

For an example of a newly developed Indiana-based website check out: GlobalToaster




What are your metrics for business success?  I attended a non-profit board meeting this past week where the directors were working through this question  - "How do we measure success?" 

A common metric that was discussed was # of volunteers in the organization in ___ years.  Although this metric does measure growth, it does not measure the quality of growth.  What if the volunteers are under committed, under trained or just plain lousy at their job?  You may meet your metric but find that your organization is under serving the community, or worse, frowned upon by the community it is trying to serve.

Similar metrics are common in business plans where I often see # of customers as a metric for growth.  I also saw this problem with the prior administration of Indiana's 21st Century Fund where creation of jobs was the key metric for grant opportunities.  The problem there is that there are good jobs and bad jobs - purely measuring # of jobs does not distinguish between the two.  I could create tons of hourly pay jobs today if I wanted, but those jobs would be low wage and temporary.  Not the type that would ultimately benefit the State.  In short, the metric is not a good measure of success.

The difficulty with metrics is that they can come in just about any form you can imagine.  They are simply a way to measure growth.  The key is to tie them in with the ultimate goals of your organization.  Most companies do not want growth at the cost of profitability.  Personally, I would rather run a small shop with higher profit than a large shop with smaller or no profit.  

So, here are a few poor and good metrics for successful business growth:

Poor metrics:
# of employees
# of customers
# of square feet of office space

Good metrics:
Net Profit at $_____, based on Revenue of _____.
% of customers at ___ % margin
___% profitability margin per employee


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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.


As an admitted technophile, I can't help but look into all the newest gizmos and gadgets.  Plus, working at an information technology law firm, I can even bill it sometimes.  Thus, I've recently begun a fascination with e-books.  Jason Wilson has  done a very interesting set of blogs looking at the use of e-books (or lack of use) for lawyers (www.jasnwilsn.com/).  Jason's viewpoint is as a counterpoint to a recent set of blogs by Professor Eugene Volokh (volokh.com/2009/10/02/the-future-of-books-related-to-the-law/).  I find this debate interesting for lawyers in general, but litigators specifically.


While I appreciate Jason's point of the importance of cloud computing and web based interfaces for lawyers, I have to admit that I personally think that e-readers are likely to have increasing presence in courtrooms around the country.  I am genuinely intrigued by the thought of turning to my e-reader to "leaf" through a treatise on privacy litigation or ASP law that I've downloaded while sitting in a courtroom.  This is particularly true when the courtroom that I'm sitting in is located in small town Indiana (or any other small town) that is still working on integrated computer systems and look at you askew when you ask about WI-fi.  Web based interfaces are extremely important to the 21st century attorney, but there are still limitations.  And if technology can allow me to carry treatises and law books that I might need before a court while still using my super sleek briefcase, I'm all for it.

There are several business blogs that I follow.  Most of these are written by SaaS law / Internet law clients of mine or other Indiana businesses in technology industries.  Lately I have been falling behind on them.  This morning I am trying to catch up. 

I came across a very good, brief video on Kristian Andersen + Associates' blog.  

The video is from the Bigger Ideas/Smaller Indiana conference this past summer.  In the video Kristian Andersen shares his feelings on central Indiana's business environment and our tendency to minimize our solid business culture by holding ourselves out as having two strengths to attract businesses and entrepreneurial ventures to Indiana:

#1 - Indiana has low housing costs.
#2 - Indiana is a great place to raise a family.

Don't get me wrong, these are great attributes of our region, but I agree with KA that they do not create cultural excitement or substantive value for businesses.  If you look at top tier business environments, they certainly do not market themselves in this way.  They sell value.  They sell cultural significance.  They sell networks and incentives.

Kristian, very nicely done!


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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.