Lucid Works: Pando Daily Sets the Record Straight
September 23, 2014
On LinkedIn I learned about this Pando Daily write up: “How Disgruntled Ex-Employees and Bad Reporting Hung LucidWorks Out to Dry.” I noted the Venture Beat analysis of Lucid Works in my post on September 6, 2014. My focus was the wild and crazy information from an “expert” about various factoids. You can read my reaction to the “Trouble at LucidWorks” story here.
The Pando Daily story comes at the issue in a different way. I was delighted to see that Pando found the “expert’s” comments a bit wobbly. There was an interesting run down about Lucid Works that seems to have come from a different point of view. In a way, the two stories—Venture Beat’s and Pando Daily’s—are a bit like the he said, she said information provided to police investigating a married couple’s disturbing the peace incident. I am no cop, so I can’t figure out who is correct and who is incorrect.
Pando takes this tack:
More accurately: It’s [Lucid Works] a startup, and this shit is hard.
I understand that search is hard, but is an eight year old company a start up? That time span baffled me. Coveo asserts that it too is a start up. Other search vendors dating from the implosion of the Big Five in 2006 also use the start up moniker.
the article points out that there are happy employees and positive investors. More money is likely to be needed. Pando Daily quotes a backer as saying:
We won’t start looking for an expansion round until early next year.
ElasticSearch has amassed about $90 million in funding. So LucidWorks may be thinking it needs the same scale of investment to take wing.
With regard to management, Pando Daily reports that the new top dog is the type of CEO who can deliver revenues. The new president—Will Smith—is described in this context:
On this point, VentureBeat seems oddly hung up on the idea that Hayes is a first-time CEO, perhaps failing to realize that Silicon Valley was (and continues to be) literally built on the success of first-time CEOs. Not to over egg the point, but Mark Zuckerberg and Steve Jobs were first-time CEOs.
Pando Daily added:
As an early member of the Splunk team, Hayes is certainly more qualified for this job than 99 percent of the candidates out there, and more importantly, given that he didn’t found the company, he appears excited about the category.
Pando Daily reminded me that good start ups fire people. I understand the difference between the Silicon Valley approach to management and that practiced at Halliburton and Booz, Allen & Hamilton where I worked for many years. The idea of stability is not always congruent with the needs of a fast moving, pivoting technology company.
Pando Daily also takes issue with Venture Beat’s report that Lucid Works fumbled deals with some real big companies. Pando Daily asserted:
These accounts may or may not have any basis in reality, but they hardly indicate a failing company. The very nature of sales and business development is that deals fall apart all the time. Sometimes those are big deals, sometimes not. The facts are that LucidWorks counts Apple, Sears, Verizon, ADP, Raytheon, Zappos, Qualcomm, Ford, eHarmony, Cisco, and others among current customers.
My reaction to this is okay, but won’t naming these firms give ElasticSearch and other firms a target at which to shoot. Some content processing vendors like Palantir and Recorded Future don’t provide too much information about their customers.
On the all important revenue front, Pando Daily quoted the new top dog at Lucid Works as saying:
“$12 million in services revenue isn’t worth shit,” Hayes says. “But $12 million in product sales on subscription? That’s a $100 million business.”
I agree. Unless the subscriber terminates the subscription. As the competition among content processing vendors heats up, some firms will be quite aggressive in their attempts to take away business. Amazon, for example, seems to be struggling with search, but it could get its act together and offer both a good enough solution at very competitive prices. Amazon is not the only sharp toothed outfit in the pond.
Pando Daily tracked down its own search wizard. That poobah said:
Not everyone agrees that enterprise search is quite this sexy. One enterprise analyst, speaking to Pando on the condition of anonymity, describes it as “not that big of an end market.” But at the same time, it’s one that’s still out there for the taking. “There isn’t really a single company or set of companies that have dominant products in the space,” this analyst says. Google and Microsoft have entered the market (the latter via acquisition) with low-cost offerings that would seem to make the competitive environment more challenging for LucidWorks and other upstarts. But according to the company’s supporters, these products are targeting different, less big data-centric applications and are thus not a valid comparison.
If you have ever listened to opposing expert witnesses in a legal dispute, the same factoid gets very different treatment by each expert. That’s what makes subjective expertise difficult to interpret. My view is that enterprise search is struggling for credibility. Some of the value for information retrieval has been exhausted by vendors now out of business. These include Convera, Delphes, Entopia, Siderean, and others. Some credibility has been eroded as a result of the Fast Search & Transfer matter. The CEO was hit with a jail term and a ban on working in search for a couple of years. Then there is the on going dispute between Hewlett Packard and Autonomy. IDOL is an aging technology like Endeca. But the mud slinging about search and content processing does not improve the image of those working in this sector.
Consequently information retrieval companies are working overtime to explain their solutions in terms that do not invoke memories of Convera or Fast Search. Palantir is a data mining company. Record Future does predictive analytics. Coveo is eDiscovery and customer support. Search vendors are using a wide range of jargon to describe findability. Lucid Works is brave in using enterprise search with a dash of Big Data in its marketing.
Pando Daily said:
Journalism is tough, particularly in the technology sector. Reporters in this industry asked to cover complex and rapidly evolving companies that often take on hordes of venture cash and set outrageous performance expectations. Unseemly as it may be, stories of failure and calamity make for good scoops, and in these cases ex-employees and competitors often make the best sources. Unfortunately, they also can be the most biased sources and are often are in the best position to credibly lead a journalist astray. LucidWorks certainly has its warts and its scars. But that doesn’t make it trouble, that only makes it a startup.
One question remains: When does a company cease to be a start up and start to be a viable company? Is it one years, four years, or eight years? I just don’t know, but I think that companies that have been in business for almost a decade may not be start ups. Management with a start up mentality may not want to face the cold realities expected of established, stable firms. With Lucid’s technology originating with a community, management may be the issue to watch at Lucid Works. Good management can produce revenue, happy employees, and contented customers. Its absence is often evidenced by a lack of harmony.
Stephen E Arnold, September 23, 2014
Comments
2 Responses to “Lucid Works: Pando Daily Sets the Record Straight”
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Arnold, I’m glad you gave Lucidworks another look. However, I wish it hadn’t come about this way. In fact, Chrissy Lee, whom you disparage as a “chipper young person” was trying to tell you about some of the very facts that you wrote about here.
Very good analysis. I definitely agree that “team harmony” is a key of the success. You may also mention that the R&D team has lost influence on SOLR development, the creator of the software leave the company and created a new competitor (HeliosSearch). There is some reasons to be in trouble, the new management team must now convince.