I've been on the edge of my own epiphany for the last couple months (which keeps getting interrupted by the melt down of the financial markets). So... here it is! The web is changing the very nature of marketing in a profound way. Yes, I'm not deaf and have not been asleep for the last 10 years. We have all heard this before, but on inspection, the Web 1.0 world changed my marketing tactics, but not the nature of the marketing mission.
My career in technology has been and will remain centered on marketing as a discipline. The marketers job is to get the product in front of the customer. In the past, this meant push the product. Get the attention of customers and march in a highly motivated sales force and some brilliant technical sales people. Parade through some carefully chosen and well coached customer references, discount appropriately, close hard, and you stood an excellent chance of getting an order.
Information was scare and information flow inhibited. Vendors knew little about each other and customers knew little about vendors let alone each other. Web 1.0 made the linear flow of information much smother. My marketing budget wasn't spent so much on printed material as it was on slick web communication. Here the web changed the nature of marketing communications tactics.However, my marketing remained the primary source of information for customers. Sure, word of mouth was still the best marketing but no customer was loud enough to be heard without a vendor acting as an amplifier. Since we all remember Milli_Vanilli, no one trusts anything unless they are sure its 100% real.
The buying process today is different. First, the binge buying of the buddle has been replaced by a try-and-buy mentality best epitomized by saleforce.com and its ubiquitous CRM offering. More importantly, my customers’ social and business connections are increasingly becoming a huge electronic network that can be searched and queried as needed to find trusted references for most product choices.
We quickly are moving away from a world where marketing’s principal requirement is to push a product into a customers view. The future looks like a reference driven world where customers pull products based on information gleaned from trusted sources. These source will increasingly be part of unique individual networks. Looking back in 10 years, I’m confident that we will point to this as a Web 2.0 phenomenon with things like blogs and social networks getting much of the credit. However, these tools stand on the shoulders of 10 years of innovation and cultural change. In particular, the global adoption of email as a business-to-business tool has enabled the non-trivial cultural change that makes communications between businesses who view themselves as competitors acceptable.
The implications for marketing stretch far beyond the walls of the marketing organization.
Friday, September 19, 2008
Stronger Together
It now clear to all in the wake of this week's financial market meltdown that the IPO window is closed tight for the foreseeable future. In fact, I would argue that it never really reopened following the meltdown of the last tech bubble. Sure a few companies who built businesses with significant revenue went public, but for the most part, the equity markets have shown little interest in most technology companies during this decade!
So where does this leave VC funds with their portfolios of investment? For many, particularly in the Web 2.0 and consumer internet space, good exits have come from acquisition. Companies from Utube to Kaboodle have provided great investor returns by quickly exiting into the waiting arms of internet giants and media firms. Open source vendors have done equally well, with a long list of attractive exits as the remaining enterprise players gobble up these evangelists of a new business model. Consolidation is the SaaS market, while happening around SF.COM has not yet caught fire.
Yet the brass ring of the public markets remains down the road for those capable of reaching requisite scale. However, getting to this scale seems to take longer and entail more risk than most VC's are willing to bite off. In this light, I'm surprised we have not seen more private - private mergers designed to build companies geared for the public markets. I can think of several spaces with excellent growth prospects were private - private consolidation would make sense. Next generation database and analytics along with on-demand marketing automation are just two example of markets where numerous funded companies are getting decent traction but won't reach public market scale on their own in a reasonable timeframe. Certainly the complexities of private - private mergers can't be underestimated but with the public markets closed and M&A slowing, I would not be surprised if VC's became more flexible in getting deals done in this light.
So where does this leave VC funds with their portfolios of investment? For many, particularly in the Web 2.0 and consumer internet space, good exits have come from acquisition. Companies from Utube to Kaboodle have provided great investor returns by quickly exiting into the waiting arms of internet giants and media firms. Open source vendors have done equally well, with a long list of attractive exits as the remaining enterprise players gobble up these evangelists of a new business model. Consolidation is the SaaS market, while happening around SF.COM has not yet caught fire.
Yet the brass ring of the public markets remains down the road for those capable of reaching requisite scale. However, getting to this scale seems to take longer and entail more risk than most VC's are willing to bite off. In this light, I'm surprised we have not seen more private - private mergers designed to build companies geared for the public markets. I can think of several spaces with excellent growth prospects were private - private consolidation would make sense. Next generation database and analytics along with on-demand marketing automation are just two example of markets where numerous funded companies are getting decent traction but won't reach public market scale on their own in a reasonable timeframe. Certainly the complexities of private - private mergers can't be underestimated but with the public markets closed and M&A slowing, I would not be surprised if VC's became more flexible in getting deals done in this light.
Tuesday, June 3, 2008
Web 2.0 - Lession #1
Blog'n takes time and when your evenings get filled with end of year school events, no blog posts for a couple weeks. Ok - that my story and I'm stick'n to it.
Also - been exploring Facebook. Some interesting observations (ok - get you to decide if they are interesting) on the way.
Also - been exploring Facebook. Some interesting observations (ok - get you to decide if they are interesting) on the way.
The Facebook Effect
No... not the one everyone else is blog'n about.
Lots of buzz this year at TiE about Facebook, Facebook applications, and the like. Clearly a pretty big phenomenon so your 's truly needs to give it a try.
...fast forward a few weeks.
Ok, great service, cool product, etc. You have heard it all a million times. I was quite surprised at the number of folks out of my various professional and social circles that are on Facebook. I guess that just means I'm fashionably late to the party as usual. I did right away find a buddy from my old GE days that I had long since lost track of, get reconnected and now share fishing stories. However, that's not the real story.
My biggest surprise is the reaction of my kids and of my buddie's kids when they discovered I was on Facebook. It was as though dad had arrived at the Friday night college keg party. Bad enough that I showed up and worse still that I even knew where the party was. I could literally watch the Facebook cool factor disintegrate right before my eyes. Admittedly, my sample size of two isn't statistically significant. However, it does seem to me that Facebook, in going mainstream, has compromised the trusted relationship it had with its initial "college dorm" user base.
However, tongue-in-cheek, I predict the survival of Facebook. In fact, given the size of the Facebook juggernaut, any erosion in their share among college age kids should have no meaningful impact on their business. It does raise several interesting questions about the sustainability of the buzz inside any given social network. For example, does someone exploit this by launching a new network for each successive generation? Does Facebook do more to create "space" for various demographic groups?
In the end its all about trust. We take it for granted when its there. When its compromised, we look at everything in a new light.
Lots of buzz this year at TiE about Facebook, Facebook applications, and the like. Clearly a pretty big phenomenon so your 's truly needs to give it a try.
...fast forward a few weeks.
Ok, great service, cool product, etc. You have heard it all a million times. I was quite surprised at the number of folks out of my various professional and social circles that are on Facebook. I guess that just means I'm fashionably late to the party as usual. I did right away find a buddy from my old GE days that I had long since lost track of, get reconnected and now share fishing stories. However, that's not the real story.
My biggest surprise is the reaction of my kids and of my buddie's kids when they discovered I was on Facebook. It was as though dad had arrived at the Friday night college keg party. Bad enough that I showed up and worse still that I even knew where the party was. I could literally watch the Facebook cool factor disintegrate right before my eyes. Admittedly, my sample size of two isn't statistically significant. However, it does seem to me that Facebook, in going mainstream, has compromised the trusted relationship it had with its initial "college dorm" user base.
However, tongue-in-cheek, I predict the survival of Facebook. In fact, given the size of the Facebook juggernaut, any erosion in their share among college age kids should have no meaningful impact on their business. It does raise several interesting questions about the sustainability of the buzz inside any given social network. For example, does someone exploit this by launching a new network for each successive generation? Does Facebook do more to create "space" for various demographic groups?
In the end its all about trust. We take it for granted when its there. When its compromised, we look at everything in a new light.
Saturday, May 17, 2008
TiECon 2008 - Whats Hot, Whats Not
Great event - more to come in the days to follow.
All the morning keynotes were strong. The Tesla was cool!
The lunch today with Google, Yahoo and Microsoft talking about their respective acquisition strategies gets "Best of Show" in my book.
In terms of the panels and based only on how packed the room was:
Whats Hot? Social Networking and Mobile Applications
Whats Not? Cloud Computing and Managed Services
If you take the view that the masses lead to market crowding and valuations ahead of reality, go short on Social network and Mobile app's and bet the farm on Cloud Computing and Managed Services ;-)
The bottom line is, IMHO, there is absolutely no place like TiECon. The passion was palpable and once again, Saturday was absolutely packed!
All the morning keynotes were strong. The Tesla was cool!
The lunch today with Google, Yahoo and Microsoft talking about their respective acquisition strategies gets "Best of Show" in my book.
In terms of the panels and based only on how packed the room was:
Whats Hot? Social Networking and Mobile Applications
Whats Not? Cloud Computing and Managed Services
If you take the view that the masses lead to market crowding and valuations ahead of reality, go short on Social network and Mobile app's and bet the farm on Cloud Computing and Managed Services ;-)
The bottom line is, IMHO, there is absolutely no place like TiECon. The passion was palpable and once again, Saturday was absolutely packed!
Thursday, May 15, 2008
Davos for the Working Class
I'm really looking forward to spending the next two days (both Friday and Saturday) at TiECon 2008. The opportunity to see new ideas is almost as compelling as the chance to reconnect with the many friends that will be at the event. Nowhere have I experienced the level of engaged intellect, excitement and general willingness to engage, share and learn that happens every year at this event.
Many people over the years have tried to lure me to TiECon but in '05 Manish Chandra won me over by asking me to help organize the conference program. Working in a volunteer setting with a group of people new to me , we organized very compelling panel discussions on "Building the Buzz" in '05 and on "Open Source - Show Me the Money" in '06. I've been hooked on TiECon ever since.
TiECon draws a great crowd of people. One of the real wonders of the event is that Saturday is often better attended than Friday as many entrepreneurs with day jobs turn up to join the fun. The format of keynotes and panels with good, long networking breaks creates a level of information exchange and interaction that is unmatched in my experience. I always leave with more than a couple new ideas and many interesting opportunities to follow up on.
Truly Davos for the working class!
Many people over the years have tried to lure me to TiECon but in '05 Manish Chandra won me over by asking me to help organize the conference program. Working in a volunteer setting with a group of people new to me , we organized very compelling panel discussions on "Building the Buzz" in '05 and on "Open Source - Show Me the Money" in '06. I've been hooked on TiECon ever since.
TiECon draws a great crowd of people. One of the real wonders of the event is that Saturday is often better attended than Friday as many entrepreneurs with day jobs turn up to join the fun. The format of keynotes and panels with good, long networking breaks creates a level of information exchange and interaction that is unmatched in my experience. I always leave with more than a couple new ideas and many interesting opportunities to follow up on.
Truly Davos for the working class!
Saturday, May 10, 2008
Just Be The Ball, Be The Ball, Be The Ball (from Caddy Shack)
Just know your customer, know your customer, know your customer. Trite but true. The hard work comes in what you do about this. Is it an annual survey or do leading companies go a bit further?
I had the pleasure on Thursday of spending time with Michael Costuros and Andy Patrick of LiveBooks. These guys are building a great business helping professional photographers market their work on the web. Michael made the point that photography is deeply ingrained in their company's DNA, that most of their people are hobbiest and that in particular, their sales force comes entirely from the ranks of professional photographers.
I've just wrapped up a couple years working with Instill - the leading provider of spend intelligence to the food services industry. The solution involved translating billing data into a standard format for analysis. While the technology did a fantastic job of this, exceptions still required manual handling which meant recruiting folks directly from the food industry into technology jobs. Over the years, many of these folks at Instill had grown into mid and senior level positions in the company, with their food industry experience being a key factor in their success with the customer.
As a competitive sailer, I'm often spending time looking at gear (too much time my wife would say). My favorite location, Svendson Boat Yard has a good selection but goes well beyond this by staffing the store with folks that actually know their stuff. West Marine also used to do this though less so as their sales continue to decline (this rather obvious chicken or egg problem is left as an exercise for the student).
Just know your customer, know your customer, know your customer.
In all three examples, these leaders in very diverse industries understand that to serve, you need to first understand. They have gone well beyond the typical board room rhetoric and integrated an ability to know and serve their customer deeply into the DNA of their business. This is giving them a level of competitive advantage that is both powerful and highly defensible. The quality of your relationship with the customer has far more to do with winning and losing over the long term than other any single factor. It shows up in customer loyalty (net recommender scores), reduced churn and more repeat business. In the simplest terms, it makes you the company that customers want to do business with - which end the end, is competitive advantage define.
I had the pleasure on Thursday of spending time with Michael Costuros and Andy Patrick of LiveBooks. These guys are building a great business helping professional photographers market their work on the web. Michael made the point that photography is deeply ingrained in their company's DNA, that most of their people are hobbiest and that in particular, their sales force comes entirely from the ranks of professional photographers.
I've just wrapped up a couple years working with Instill - the leading provider of spend intelligence to the food services industry. The solution involved translating billing data into a standard format for analysis. While the technology did a fantastic job of this, exceptions still required manual handling which meant recruiting folks directly from the food industry into technology jobs. Over the years, many of these folks at Instill had grown into mid and senior level positions in the company, with their food industry experience being a key factor in their success with the customer.
As a competitive sailer, I'm often spending time looking at gear (too much time my wife would say). My favorite location, Svendson Boat Yard has a good selection but goes well beyond this by staffing the store with folks that actually know their stuff. West Marine also used to do this though less so as their sales continue to decline (this rather obvious chicken or egg problem is left as an exercise for the student).
Just know your customer, know your customer, know your customer.
In all three examples, these leaders in very diverse industries understand that to serve, you need to first understand. They have gone well beyond the typical board room rhetoric and integrated an ability to know and serve their customer deeply into the DNA of their business. This is giving them a level of competitive advantage that is both powerful and highly defensible. The quality of your relationship with the customer has far more to do with winning and losing over the long term than other any single factor. It shows up in customer loyalty (net recommender scores), reduced churn and more repeat business. In the simplest terms, it makes you the company that customers want to do business with - which end the end, is competitive advantage define.
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