Establishment, Marketing, Technology

Adoption Happens

In his blog last week, Gartner analyst Jeffrey Mann responds to Cisco’s Parvesh Sethi touting the capabilities of Cisco’s IP phones:

I’ve seen quite a few IP phones on people’s desks, and I’m sure that some people are doing innovative things with them. However, I usually see them being used as, well, phones. The phones may have an IP address and lots of great possibilities, but I have yet to encounter anyone who uses even 20% of those possibilities. Most people just pick them up to dial, much as they have been doing for decades.

Am I missing something? I respect Mr. Mann greatly, but I think there’s a point missing from this argument.

Whenever a new – and disruptive – technology arrives, even when it’s widely deployed and the benefits are obvious, the adoption of the most advanced features takes some time (remember your technology adoption life cycle?).

I don’t mean to be cynical here, but let’s face it: If I had an IP phone on my desk, I’d use it to make calls (sorry, I’m with Steve Jobs on this one: the killer app for (cell) phones is still making calls). Given my penchant for playing with tech toys, I’d probably play with all of the advanced features, too. And I’d learn which ones are actually useful for me (not necessarily the same ones for everyone, either). But I’m an “early adopter” and not everyone is – in fact, very few people are.

But the fact that the technology is there, and it’s being marketed and made available means that – if it’s useful – it will eventually be used.

Bringing a disruptive technology to market happens in stages. In order for a majority of customers to understand the technology, it has to fit into the context of something they do today. It can be better and different, but in this case, a phone is still a phone and makes calls and does some other cools stuff.

The important lessons for disruptive marketers: Only when it’s accepted that the disruptive technology can fit into common activities does it get the chance to realize its disruptive potential and begin to change those activities, or obviate them and create new ones.

Differentiation, Marketing, Sales

A Step in the Right Direction

On Friday, CNN reported that Saturn dealerships will now have Toyotas and Hondas (and, oddly, Chevys) on hand for customers to test-drive side-by-side with the Saturns they hope you will buy.

While not an uncommon tactic for technology companies (where nearly every vendor produces comparison charts that, while biased of course, compare their product to chosen competitor(s) ), this is new for car dealerships, whose sales tactics have often relied on getting you to make a deal before you ever had a chance to see a competitor’s model (also called pulling the wool over our collective eyes).

Saturn has finally admitted that its customers are going to check out the competition no matter what they do, so why not let them do it right in our shop where we can also engage them in the conversation about why our product is the best. It’s still a tactic to get us to buy before we go to the competitor’s shop, but all they are doing here is avoiding the conversation we might have with the competitor’s salesperson – who most assuredly won’t offer the same level of open comparison.

I might be biased by the fact that I love my Saturn, but I’d say after a few years of taking heavy criticism for some poor tactics and decisions, this one is a step in the right direction – and more importantly one from which all marketers can learn.

How confident are you that, when seen side-by-side with the competition, your customer will choose your product? (if you’re not, then you should think hard about changing your product!)

creativity, Differentiation, Engagement

Disrupting Because of…

Doc Searls defines what he calls the because effect

This is what you get when your new business isn’t just about inventing and controlling technologies and standards, but about taking advantage of the new opportunities opened up by fresh new technologies and standards. For example, making money because of blogging, or RSS, or desktop Linux, or whatever — rather than just with those things

In the technology business, we tend to be very obsessed with the technology itself. So many companies claim that what differentiates them is the technology (often only certain features of the technology) and sometimes it’s true, but not often.

But many of the real opportunities exist in taking advantage of all of the technology we’ve invented to do things (anything from business processes to making new friends) differently – and better than ever. Or what can be done because of the technology.

Think about the people making money by running businesses in Second Life. They are not in the technology business, but they are in the design or fun or entertainment (or whatever) business. And their business is able to have the reach is does because of Second Life. You can even say the same for the large corporations who have established a presence in this virtual world. They are able to better interact with partners, customers, etc., because of the technology.

There are two things I ask myself everyday:

1) How am I making use of all of the technology and capabilities available to me to engage my market? to attract new prospective customers? to start an interesting conversation? You might say, what am I doing different/better because of the technology I have at my disposal?

2) I market technology. What are my customers doing different/better because of the technology I market? We marketers like to think in terms of benefits (many of which are not really benefits at all). But if you pose the question this way, the benefit becomes very clear.

What are you making possible for your customers that was not possible before?

Establishment, Items of Interest, Management

A Very Very Long Run

Disruptive Marketing is not just about creating disruption and displacing established market participants. It’s also about how established participants respond to and ultimately capitalize on (and sometimes eliminate) disruptive threats.

This story from Business Week is the story of just such a company. It started with

The world’s oldest continuously operating family business ended its impressive run last year

1,428 years. That’s a very very long time to be in business. In the technology industry where I live, many businesses are lucky to be around for more than five years.

Ultimately, according to this article, the business wasn’t displaced or made irrelevant (through a market disruption), but faded away in a series of mis-directed financial decisions.

But what struck me as interesting was the way that this company made decisions over its incredible millenium-and-a-half run. They refused to comply with established protocols and societal norms. They focused (until near the end) relentlessly on doing the one thing they knew better than anyone else, and they found ways that worked for them to overcome change on a scope that most businesses can barely conceive.

The result was a business that sustained financial, economic, political and military storms of nearly every conceivable variety. It is what they chose to do differently – making business and management decisions that defied the norms – that kept them stable over a very very long run.

It also points out that sometimes the best way to capitalize on disruption is not to respond at all – just let it wash over you and keep going.

One of the most common debates I see in businesses today is about the meaning of, and response to, competitors (and others) actions. There tends to be a common pattern to these discussions: panic, some analysis, then an increasing sense of urgency to act.

I can’t say what the decisions of Kongo Gumi’s management were a millenium ago, but from the history it seems to me that there must have been lots of decisions not to act in these situation.

An idea that might help many companies today is to include in the set of possible decisions “do nothing differently” and rely on the plans in place to succeed. Then play out that scenario next to ones that include the panic-driven actions. I have seen this work effectively far more often than you might expect.

My question is: Do you have the courage to trust your direction and not respond with panic?

Differentiation, Marketing

Recursive Differentiation

In order to understand recursion, one must first understand recursion. (Author Unknown)

The topic of competitive differentiation has been coming up in quite a few conversations lately. The context is usually a discussion on how to create “sustainable competitive advantage.” A variety of different frameworks are used to describe it, from Michael Porter’s classic to the currently in-vogue.

When I’m asked how to do this, I have only one answer: you can’t. You can (and must!) create both a process and a culture that continuously creates competitive advantage.

There are lots of ways to create competitive differentiation. A better product. More service. Something free. Customer service. Appealing to needs as yet unmet (even with the same product/service). Hire better people. Spend more on R&D. Create a “faster” organization. Lower your transaction costs. I can go on and on…and some of these things will work for a short period of time, and some for longer.

But can you create sustainable competitive advantage? Every single thing you can do can be copied by your competition. Most things can be done better (they can leapfrog you – and will).

There is really only one way to create “sustainable competitive advantage” and that is to sustain the effort of creating competitive advantage. Sound recursive? It is.

I’ll offer a recursive description of this process.

How to create competitive advantage:

  1. Do something disruptive. Create something that will not just frustrate your competition, but that will do the market equivalent of rendering them speechless.
  2. Assume that your competition (known or unknown) has matched you and outdone you.
  3. Based on the position you are in after that assumption, create competitive advantage.

And you know that if you don’t do this, your competition will.

Differentiation, Products, Technology

Consumer-Class

I’ve spent the last two days at Software 2007, and while enjoying the show and my fellow attendees tremendously, I noticed that there was a phrase (a very common one in the software industry, in fact) that I heard over and over: “Enterprise-Class”

Typically this is a phrase used by software companies to indicate that their software can handle the intense demands of the largest multi-national companies combined with their very large communities of suppliers, partners, customers, etc.

In this context, I was hearing it from SaaS vendors trying to convince the audience that their applications were more than conveniences for small business, but rather ready for prime time and the so-called real business of large enterprises.

Add that to the fact that this conference (as so many are lately) is centered around Enterprise 2.0, and I began to wonder: Does “enterprise-class” matter?

Consider: Enterprise class usually means three things:

  • Scalability: The ability to handle transaction volume, data storage needs, etc for a very large number of simultaneous users and still give good response time and performance.
  • Security: The ability to protect data where it’s stored, in transit (over the network) and at all of the endpoints and nodes with sufficiently high levels of security so that it can’t be stolen. Also the ability to ensure that only people who are authorized to see certain data can get to it at all, plus the ability to provide business continuity in case of disaster. And to do all of this in ways that meet a tangled web of regulatory requirements.
  • Flexibility: The ability to adapt to different contexts, tasks, etc. And the ability to configure both the application functions and the user interface to meet the needs and preferences of every individual user.

Let me compare those requirements to the requirements that might be placed on a successful Web2.0-style consumer application (think Google – search, calendar, reader, whatever) or small-to-mid-size-business applications (say, WebEx meetings or SalesForce.com CRM):

  • Scalability: These applications must scale to enormous numbers of users (sometimes in the millions, rather than the thousands of an enterprise) and data transfer and storage requirements. Moreover, where enterprise applications can be rolled-out in a planned way (and therefore additional demands on the system predicted and defined), SaaS applications must respond to unpredictable demands which can grow very quickly if the application/service becomes popular.
  • Security: SaaS applicaitions may or may not be subject to regulatory requirements, but they are subject to the requirements of the market. They must be able to keep user data and user content secure and be sure access controls are in place and highly effective. For small businesses they must still meet all of the business requirements. But imagine the exodus from the service if consumer data were compromised (see any number of recent examples). In addition, these applications/services do not reside behind firewalls, so they must be built to be hacker-proof in ways that an enterprise application is often immune (mostly) from.
  • Flexibility: These application must not only allow so much flexibility that every user can personalize their experience, but it must be easy enough for users to do it themselves. Small businesses must be able to create the custom restrictions, processes, roles, etc. that meet their unique needs. Not everything needs to be customizable, but most of the experience should be. On top of that, there is an increasing demand for these applications/services to be published as web-services in some form, so that they can be used in more flexible ways.

“Enterprise-class” has become such a loaded and popular buzzword that no marketing department can seem to go without using it. But that’s just getting caught up in the buzzword.

I realized as I considered this comparison that this is another element of the “2.0” shift that is turning the market inside-out in so many ways. And it led me to ask:

Does my enterprise really want an “enterprise-class” application? or a “consumer-class” application?

Community, Engagement

Being in the conversation

The phrase I hear in the marketing world almost every day is “the conversation is happening whether or not you are part of it.” This is usually followed by an admonishment to the marketing authority to become part of the conversation in some way, usually by trying to bring it to your own site/territory.

It’s good advice. All-too-often followed by not-so-useful action. It’s not as easy, nor as obvious, as it seems (especially for traditional marketers) to find the conversation, not to mention take part. And if you haven’t heard it enough, taking part not only means saying something, but also saying something useful and interesting, saying something authentically “you” and not saying something that is just a bunch of marketing-speak positioning words.

This posting is unconfirmed (as far as I know), but look at this response from the folks at Second Life. This gets at the heart of participation. The GetAFirstLife.com project owner is going to parody Second Life. And use some variations on the logo, etc. They accept reality and explicitly agree. They win points, buzz and goodwill all at once.

Most importantly, they further their reputation as cool people with something useful to say, and enhance their unique differentiation that makes Second Life the “place to be” in the virtual world.

Just like people will be talking about your company and your products/services. When you comment or respond, what will you be saying? Will it win you goodwill?

And most importantly, will it contribute to what makes you different and unique?

Buzz, creativity, Differentiation, Marketing

Second Stage Boosters…Ready

Let me state this as a hypothesis:

new product <> disruption

Or in words, having a new product is neither necessary nor sufficient to create market disruption.

I recently had an interesting exchange with Judi Sohn at Web Worker Daily (a new favorite of mine) about GrandCentral, which gives you a single number that can reach you anywhere you want. GrandCentral is getting quite a bit of attention and generating lots of buzz.

I had to ask: Why? Everything GrandCentral offers, I’ve had from VoicePulse (my VoIP provider) for years. Other than the obvious price (GrandCentral is free, VoicePulse is not), I can’t find anything that GrandCentral can do that VoicePulse can’t. So why is GrandCentral holding the position of “it’s YOUR number – it’s attached to you, not your phone/device/location” which in today’s highly mobile multi-device world is important?

Pretty simple, actually. When VoIP started (VoicePulse, Vonage, 8×8, etc.) the selling point (key message in marketing-speak) was “this works just like your phone”. You got a little box and connected it to your home network. It had a standard phone jack and you connected your phone to that just like plugging it into the wall. You picked up the phone a dialed just like a regular land-line POTS phone.

Sure, you could do all this other cool stuff that got me and my geeky friends all excited, but the mass-market sell was “it’s simple – it’s just like what you do today, only cheaper and cooler”

This is a classic way to sell new technology: First, make it fit the existing model; second, show how it changes the model. GrandCentral is making the move to the second stage of technology adoption.

GrandCentral has taken advantage of the general awareness of VoIP capabilities and the fact that people in the market (mostly early adopters) no longer need to make it work just like their old POTS phone, they want all the capabilities that a network-based service can offer. So GrandCentral has gone to market with the selling point that “you own your own number.” It’s a powerful message, and it appeals to the people who were eager to move to internet telephony and wanted the capabilities to move forward.

Their service isn’t really new or innovative (OK, their exact brand is, but I bought the same exact service 4 years ago), but GrandCentral has turned on the second stage ‘boosters’ and is now moving the market forward – I expect pretty far forward. While for now it’s only the early adopters who will sign up, someone will figure out how to move this to the broader market pretty quickly.

And it is changing that market. Completely.

My question is: will the traditional VoIP providers take advantage of the opportunity to re-take their lead? Or will they, as so many technology companies before them, stand there complaining “but we’ve had those features for years!” – and go nowhere fast while their market escapes them?

What would your company do?

creativity, Items of Interest

Staying Creative

In order to be disruptive, you have to stay creative – constantly creating new ideas – disruptive ideas. What inspires you is very personal, but for me, there is nothing that inspires that creativity in my work quite like a Tom Peters book (or article or whatever).

So my advice (FWIW): (re-)Read something by Tom Peters (post-McKinsey!!) or something Tom-Peters-like (apologies to both Tom and my mother) every 3-6 months. It will keep you from becoming complacent.

Then go create something disruptive.

[My position: I disrupt. I create extraordinary opportunity. (6 words)]

BTW: my BHAG: I want Tom Peters to be my mentor.