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Archive for November, 2007

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Interview With Lucid Era’s Ken Rudin

Posted by Bob Warfield on November 25, 2007

Recently I had the opportunity to interview Lucid Era CEO Ken Rudin.  Lucid Era is one of the newer SaaS players out there.  They offer Business Intelligence Solutions, which is an exciting space.  Consider how fast the evolution of that market has come to completion with the recent acquisition of Cognos (IBM), Business Objects (SAP), and Hyperion (Oracle).  Having cleared the decks from the last cycle, the market is ready to begin the next and Lucid Era is well positioned in that respect.

As always in these interviews, my remarks are parenthetical, any good ideas are those of the 3Tera folks, and any foolishness is my responsibility alone.  Also, in the interest of not getting too long winded in a blog, the interview will be published in several parts.  If you haven’t already, you may want to subscribe to the data feed for the blog so you don’t miss one.  Just check out the data feeds in the top left corner of this page, below my picture. 

What’s Your Basic Elevator Pitch to a Customer? 

Ken:  What I tell VC’s and other people in the software business is that Lucid Era is a series of pre-built analytic applications built on the world’s first complete hosted BI platform.  Our Sales Analysis app came first, for Sales VP’s and Sales Ops.  It helps customers accelerate their pipeline and increase the efficiency of sales.

The short form is that we are to BI as SFDC is to CRM for SaaS.

To a customer, I would say, “We provide analytic applications that help Sales Mangers and Sales Reps maximize their sales revenue by managing changes in their overall pipeline, maximizing the revenue from individual opportunities, and maximizing the effectiveness of their sales reps.”

Bob:  What metrics does your BI solution analyze? 

Ken:  You can create your own and some built in.  People say, “I have CRM, isn’t that supposed to do that?”  CRM helps you manage the sale sprocess, which is different than optimizing that process.  Most customers surveyed bought CRM to increase revenue, yet less than 20% say CRM did that after they installed it.  The reason?  You’re just automating someone doing the wrong thing faster. 

What we like to do is look at the process and figure out what’s really going on.  SFDC captures the right data, and we do the analysis to turn that data into real decision making information.

Concrete examples:

• What deals are stuck in the pipeline? 
• $5M in pipeline but what’s really moving?  What’s new?  What has changed?  What deals are bigger/smaller/stuck?
• Average length of time for each part of cycle. 

What decisions does this result in?  Call the stuck deal accounts and if they don’t move take them out of the pipeline and focus on real deals.

We also have a Pipeline Velocity report: how fast are deals moving through?  Watch the hot deals that are moving quickly because they’re the ones you are likely to close.  Don’t just focus on the static snapshot, understand the dynamics.

Another one is Sales Rep Ramp metrics.  How fast can I bring on a new sales rep and get them productive?  Usually this is tribal knowledge.  How long before they perform as well as seasoned reps?  The answer is often surprisingly longer than most sales organizations would like to think.  Knowledge of this lets them hire and train far enough in advance to make their numbers.

How is your product sold?  By seat/month?  Other metric?

Ken:  We sell right now by the application.  Sales Analysis and Revenue Cycle are the two applications we started with.  Sales Analysis is based on CRM data.  Revenue Cycle is CRM data plus Financial data.  Revenue Cycle is a superset of the Sales Analysis application.  Sales Analysis is $1500 per app per month and Revenue Cycle is $2900 per app per month.  This is 10 users and all the storage you need for most companies.   The workload isn’t the seats, it’s aggregating and cleaning the data.  Adding seats is incremental, so we want more people to use it so there is more value perceived.  Makes the app stickier.

Bob:  (I like to try to get a handle on how these different SaaS deals compare, so I converted these prices into equivalent seats at $50/seat month.  It comes out to the RC app being not quite 60 seats.  When you consider the average Salesforce deal is still only 20 seats, Lucid Era is moving up market.  Based on my chats with other SaaS CEO’s like Chris Cabrera and Steve Singh, this is a good thing. )

How many customers and how many seats have you sold?

Ken:  20 customers ranging from 40 employees to 25,000 employees.  Small, mid, and big are all benefiting.  2 companies are over 10K employees.  Quantum is one of those.  They had lots of BI but sales didn’t get their needs met.  We can get them up and running in 48 hours or so.  It only costs $2900 to learn if we’re lying or not.  That’s equivalent to the cost of one business trip cross country.

Bob:  (Once again we see evidence that even small SaaS companies are getting some immediate traction with large enterprises.  I see that as wonderful validation that the SaaS model is spreading rapidly and is no longer controversial at all.  In addition, Ken makes the point that I hear over and over again talking to SaaS CEO’s:  there is no try before you buy with SaaS because you can buy it for a month, use it for real, and see very cheaply whether it works or not.  As Ken Rudin puts it, “You can see if we’re lying for $2900 and 1 month invested.”  That’s a powerful sales technique compared to the long evaluation cycles and huge costs of traditional On-premises enterprise software.)

How has SaaS changed since you first started in it?

Bob:  (Ken has been at SaaS longer than almost anyone, and he has worked for several of the players, so I was particularly interested in this topic.)

Ken:  I’ve been at it since Salesforce had 17 employees.  For me the biggest difference is that SaaS was a foreign concept in ’99.  There were strong objections.  In the early days 70% shut the door in our faces and refused to give up their data.  People had to get comfortable. 
Today, people seem surprised that customers will give us some of their most sensitive data.   A lot of it is our customers are from Salesforce.com so they are already there.  But people are used to it, and it isn’t an objection any longer, it’s more a question.  How are you keeping my data secure?

Bob: (I love the idea that objections morph into questions.  People can accept that a SaaS vendor can keep data secure these days, they just want to verify how that will be done.)

What did you want to do differently from these other SaaS ventures at LucidEra and why?

Ken:  A lot of the vendors still focus on the on-demand nature of the app as being why you should buy it.  In other words: no software.  At the time it was interesting, but we’re way beyond that and vendors still haven’t moved on.  As a customer, why do you care, as long as it works?  We focus on the simplicity, not on-demand.  That’s our key mantra.  Simplicity is the benefit, on-demand is the feature or mechanism.

Take that a step further.  SFDC got away with it for many reasons.  The early “no software” tagline tells you nothing about the value you’ll get.  It says what we don’t do, not what we do do.  But in those days, we had to emphasize our innovation.  Today we don’t push our platform, we focus on the fact that we can improve revenue for customers very very easily.  It’s really simple.  And there’s huge value. 

Let me give an example:  Joe vs Charlie as top sales reps based on revenue plus discounting.  Traditionally, companies just look at who sells more, but that is a simplistic view.  Larry Ellison used to love to see a report that factored in discounting.  Suddenly, we see that Charlie isn’t selling as many gross dollars, but he discounts far less than Joe, so the net profit is higher.  Turns out Charlie is really the top sales rep and Joe was just giving away the product.

The other thing is I wanted trials to be valuable, not just a sales process.  We deliver value even in the trial.  That’s important.

Bob:  (SaaS takes a lot of the friction out of the sales cycle.  Ken is taking that to the next level.  If the sales cycle itself is already delivering value, there is almost no sales cycle.  If he can install the software in 48 hours with a $2900 check, that’s a credit card transaction and then you’re looking at real reports based on your data.  Sounds like a hot idea!)

Next Installment

In our next installment, we’ll get Ken’s perspectives on raising VC (he had an interesting time of it) as well as more thoughts on the sales cycle. 

Posted in business, saas, strategy | 7 Comments »

SaaS is a Key Component of Your Innovation Cycle

Posted by Bob Warfield on November 24, 2007

All technology goes through an Innovation Cycle.  Early on, very few are using a particular technology, so it has the potential to provide a competitive edge.  As companies see that advantage in action, and learn where it comes from, the technology spreads.  Eventually, everyone has the technology and it’s no longer a competitive weapon.  Rather, it becomes a cost of doing business.  Having a local area network (LAN) with Internet access at work is not a competitive weapon, it’s a cost of doing business.  Try running a business without Internet access at your own peril.  E-mail, word processing, and a host of other things are cost of doing business technologies. 

Once a technology becomes a cost of doing business, it can be commoditized.  While there are differences in various alternatives, often the differences are not worth the price of being, well, different.  So one or perhaps just a few of the alternatives take over all the market share.  The primary distinguishing characteristic in the commoditization phase is cost.  Why choose the expensive option if they’re all pretty much the same?  By driving cost out, business makes room to redeploy some spending to new things that might make a competitive difference.

SaaS is a logical component in this cycle of innovation because it represents the ultimate commoditization versus perpetual licensing.  In fact, it reaches the extreme that in some cases no IT involvement is required whatsoever.  SaaS Week notes that SaaS is increasingly being brought in by the business side without requiring IT involvement.  Gartner revealed that three out of four SaaS decisions are made by business rather than IT.  I know I’ve personally seen a case where Salesforce.com was owned and managed by the executive assistant of the VP of Sales.  It worked great.  There was no real need for IT to get involved because the application was so simple to administer.

It’s impossible to invest in the best on every front, and paying too much for commoditized technologies is actually counterproductive.  Choose your investment targets so that they will make a difference for your business.  For the rest, go with SaaS solutions.  They’re cheaper and have a higher likelihood of being successful.  To really take advantage of the Innovation Cycle, Business and IT need to look proactively for commoditization opportunities.  The more you can find, the more budget you’ll free up to create an advantage elsewhere.  You can’t just wait for these things to fall from the sky.  When it comes time to upgrade the old software, look carefully at whether its worth upgrading or whether a switch to the SaaS equivalent doesn’t make more sense.  What will upgrading buy you in terms of new capabilities anyway?

Consider the many commodity services IT provides and ask which ones could productively be converted to SaaS:

  • Backups:  Some or all backups could go SaaS.  EMC recently acquired Mozy to provide exactly this kind of service.  Small business, in particular, could benefit.  Bigger business could choose this route for less critical backups.
  • E-Mail:  Does it make sense to have to say on top of an Exchange server, or does it make more sense to go SaaS?  E-mail is already dealing with the cloud.  Moving it to the cloud could be a real improvement.
  • Less used desktop software.  Maybe you don’t want to move the core Microsoft Office apps yet, but what about less used software?  Gliffy is a great SaaS alternative to Visio.  I use it for diagrams and it works great.  Project managers are another class of software that not everyone needs that could be handled as SaaS. 
  • Wikis instead of Sharepoint?  We started on Sharepoint at the last place I worked and found Wikis maintained by 3rd party SaaS organizations were radically easier and more productive.
  • Expense reports and travel.  Why mess around with this stuff internally?  Concur makes a great solution as do others.
  • HR software for reviews and the like.  Again, tons of SaaS solutions are available.

Most of the world understands the commoditization issue, even if only unconsciously.  Gartner predicts heavy pressure on software prices as disruptive  models like SaaS and Open Source come into play.  Open Source, BTW, is the other commoditization model that you should consider.

Posted in saas, strategy | 3 Comments »

The Blogosphere is Dead, No, It’s Only Lame!

Posted by Bob Warfield on November 23, 2007

Another burst of handwringing about whether blogs matter has hit the web.  I’ve written about this before, but some of what’s being said makes more sense than the last round.  Some doesn’t. 

Umair Haque says the blogosphere lost its Mojo and to be more precise that pro-blogs have lost their Mojo.  This is not unlike the writings of Fred Wilson who felt that when Uber Bloggers like Om Malik and Michael Arrington succombed to using big teams instead of doing all the writing themselves a lot was lost.

What this is really all about is the intrusion into the blogosphere of folks who are perhaps overly mercenary in their desire to use it as a total tool for their business interests.  Never mind that the older school could be accused of using it as a tool for self-interest, this is a low down baser more subtle and at the same time stupider approach.  It’s bipolar.  Stupider are the linkbaiting pay per view black hat SEO tactics some will use.  Subtle is just the practice of copying mass media.  It’s ambulance chasing boiled down to meme chasing.  Doesn’t matter what the meme is, if it rises quickly we have to write about it.  I do it myself sometimes, but I try to stick to memes where I think I can actually add something to the conversation.

That’s the other problem conventional media has.  It doesn’t want to offend, because that might cut it off from some interest group.  So it doesn’t add anything to the conversation.  This comes up over and over again because people who troll the blogosphere for real insights find the rest to be spam.  And because it is a natural evolutionary process that as soon as you provide a way to keep score at any game ranging from NASCAR to blogging, people will try to cheat in order to win over others.  In this case, we’re talking about the Internet, so cheating is done with computer tactics, much like the SEO’s use.

Personally, I don’t think it’s too bad yet.  It’s under control.  How do I know?  Because I still come out way ahead by searching the blogosphere before turning to Google when I want to learn something new.  That only works because the blogosphere isn’t so polluted with spam as the mainstream web search space.  However, for those who give up their RSS feeds and just stick to reading Techmeme or even something like Robert Scoble’s excellent link feed, you’re giving up a lot of juice.

I like to get the juice.  That’s why I keep looking beyond the Techmeme’s.  At his suggestion, I’ve started taking Scoble’s Link Feed.  I like it, but I’ve decided that what I really need is some combinatorial capabilities in Google Blog Reader.  I want to be able to take aggregator feeds like Techmeme, Scoble’s Link Feed, Y Combinator’s Hacker News, and similar sources, and set it up so I only see articles on those feeds that aren’t already on my other feeds.  That’s probably going to be pretty hard to do, so right now I just read those kind of feeds last and do a quick scan deleting everything I already heard about and then going back to see what I missed.

Posted in strategy, Web 2.0 | Leave a Comment »

More Microsoft Bashing (Not Really, But the ‘Softies Will Think So)

Posted by Bob Warfield on November 23, 2007

I’ve written before and gotten a lot of comments on what I call “Microsoft’s Expensive Rift With the Web“.  Many of the commenters mistakenly thought I was positioning Java against .NET and bashing Microsoft.  I don’t as Microsoft Bashing so much as identifying an area where their tactics are hurting Microsoft more than the competition.  In reality, I was lamenting that Microsoft’s “winner take all” view of everything makes their life more difficult than it has to be in these times of Open Source. 

Stowe Boyd passes along a similar article that Matt Asay wrote that has a good way of showing how their approach as applied to the Office Suite Wars Part II (they won Part I) is their Achilles Heel.  In essence, his view is that Microsoft is fighting the new war with the old tactics.  They’re fighting a rear guard action to hold on with the desktop when they hsould be fighting to win the Office in the Clouds War.  Shades of Dunkirk if they aren’t careful.

Then there’s this edgy (sorry, no pun intended!) comment from Umair Haque:

No one’s gonna give up preference info to a player like Microsoft – because no one trusts Microsoft. And trust is at the heart of value creation in the edgeconomy.

Part of the problem I’m writing about is this trust issue.  And the lack of trust comes when a company tries to hard to make themselves a winner by making everyone else the loser.  As Haque puts it:

The fundamental problem is that Microsoft is playing massconomy games in an edgeconomy. Coercion doesn’t work; closure doesn’t work; and, most definitely of all, evil doesn’t work.

And those games are wired into it’s DNA. Microsoft will never – ever – pioneer new market space, explode a value proposition, or redesign a value chain.

The one place I think I’ll disagree with Umair is that I hate to ever say never.  The guys at Microsoft are smart.  They just haven’t been able to learn a new strategy.  But maybe with enough new faces there will be a new strategy.  Time will tell.

Related Articles

Take heart, Microsofties.  I think Oracle will more likely be slaughtered first by the Cloud than Microsoft Office.

Posted in business, strategy | 3 Comments »

Software Companies Push Service Because It’s the Poor Man’s SaaS

Posted by Bob Warfield on November 23, 2007

Ben Worthen of the WSJ writes that the first thing tech companies are pitching is “professional services.”  On the question of why, his answer was:

Because the margins are often higher than in software and tech equipment, John W. McCain, vice president and general manager of H-P services, tells the Business Technology Blog. That’s especially true for strategic consulting. Plus consulting gigs are a great way for tech companies to sell more of their products. McCain says that his consultants often recommend H-P products to help clients address the problems the consultants identify.

The margins are higher than software perpetual license sales?  I find that very hard to believe, at least with respect to gross margins.  IBM itself, mentioned in Worthen’s article, continues to find more profit in software than consulting, not that they don’t continue to build their consulting business.  The real reasons are alluded to when McCain says it helps sell the other products.  It would be hard to sell the other products unless there was a great customer experience going on there.

Professional Services can deliver many of the advantages of SaaS when properly deployed.  Creating a better customer experience can lead to more product sales.  In fact, for an on-premises perpetual license company, Services are the key to customer experience and satisfaction.  A well-run Services organization can make sure the customer succeeds.  Unfortunately, this is difficult to do and still maintain high Services margins, so there is often a tug-of-war over what’s more important.  If your company is starting out and still trying to build its reputation, you’ll have to give away Services to help build that reputation.  If you have a customer that gets into hot water, you should give away more Services to fix the problem if you value that relationship.  Most software companies, surprisingly, won’t.  Hence we have the huge crash and burn projects that have surrounded companies like Siebel, Oracle, and SAP where customers sometimes even resort to law suits.  Adding a System Integrator clouds things even more because the SI is never incented to give away services on behalf of the software vendor.

SaaS realigns this mess around customer satisfaction.  Typically there will be no boil-the-ocean project to install SaaS–that’s a non-starter.  The service component of SaaS is indistinguishable from the software piece for the most part, so we don’t have the conflict of a Service Group being asked to give away free service to make a customer happier when they’re paid on margin for their Services business.  Lastly, there are fewer opportunities for SI’s and the customers themselves to get themselves into hot water.

The other poor man’s SaaS result of Professional Services is recurring revenues.  At least for the term of the engagement, payments keep coming.  Smart Services people somehow manage to make that term almost infinite as they find more to do when the original goals are met.  Service’s revenue has become the life ring that sustains quarterly results as perpetual license sales have been flagging and unpredictable.

If you have a perpetual software business and you’re wondering about SaaS, ask yourself how well you’re running your Services business first.  Are they an integral part of increasing customer satisfaction?  Or are they simply a profit center that’s decoupled from the software piece?  Until you can focus them on customer sat, it’s hard to see how you’ll do very well at SaaS.

Posted in saas | 2 Comments »

The Real Social Graph Hasn’t Shown Itself Yet

Posted by Bob Warfield on November 21, 2007

There’s a great scene from Mission Impossible where Tom Cruise/Ethan Hunt says to government man Kitridge, “You’ve never seen me very upset.”  In the same vein, I don’t believe we have yet seen the Real Social Graph, although we certainly think we understand it.  The world is sniffing around the potential, but the full featured version has yet to be created let alone experienced.  Why do I say that?  Because to reach its full potential your Social Graph has to be connected to every aspect of your web experience.  It won’t do for it to be confined inside Facebook.  It won’t even do for it to be portable, so you can move it around between services.  We can’t get there simply by recreating the Social Graph inside every different service we use because the Social Graph is bigger than that and it changes too rapidly.  The copies would never stay in sync or be up to date. 

Think of the Social Graph as tracking your relationship status.  It changes constantly.  Perhaps not for your oldest, dearest friends, but for most relationships, there is change.  We’re moving closer to some people because our interests line up.  We’re moving further away from others because common interests are on the wane.  The interests themselves are constantly changing, and are cataloged in the context of the Social Graph.  See why I say you can’t manage this by copying data around?  Besides which, the essence of the web is leaving data in place and refering back to it.  Copying things around is so Old School.  The Real Social Graph can add value to virtually every web interaction we have, and it can increase it’s own power and reach by being aware of every interaction we have.  The Real Social Graph is not just data, its a living breathing thing that changes constantly based on inputs from it’s owner and the other people it represents relationships with.

Recently, there was another round of the “E-mail is dead” meme.  A silly business that, because at nearly the same time there was also a big round of posts about how much value can be derived from E-mail.  People say the e-mail networks are the biggest Social Graphs out there, that they’re not set up as networks per se, and that there is a limited window for them to get moving before other Social Networks take them over.  I say there’s a limited window for all these services:  Facebook, Twitter, E-Mail, and every other Social Thing out there on the web.  It all has to connect.  None of it is as “Social” as it could be.  And very very little of it is truly open.

We’ve seen a similar meme about blogging, and yet that is far from dead too.  Just ask WordPress which is growing like a forest fire out there.  The reality is that all of these services have differences, some subtle, some profound.  They all have value.  There is no one single universal form of web interaction that is appropriate for every kind of communication and collaboration with every kind of relationship you have with the vast plethora of individuals you interact with on the web and in your personal life.  Come to that, this isn’t even limited to the web.  Why shouldn’t it take in your telephone activities as well? 

Fred Wilson writes about how valuable it was for him to fire up Xobni to figure out who his 100 closest friends where based on who he sent the most e-mails to.  I’ve got news for Fred, that would be a start for me, but I’d be missing out if I didn’t look at the folks I call on my cell phone the most often.  I seldom send e-mail to my local relatives and closest friends, for example.  I call instead.  I’d be missing out even more if I thought my Social Network in Facebook would do it, or my network in LinkedIn added to that as well.  This is why I think Stowe Boyd will lose his bet that in 6 months everyone’s business contacts will move from LinkedIn to Facebook.  These things are siloed for a reason: we use them differently.  We want to keep them separate for many activities, but we need to be able to treat them all as one thing when it’s convenient.  If we could look across all of these media, perhaps with some sort of weighting, we could get a lot closer to the perfect invite list.

Let me say it again:

To reach its full potential your Social Graph has to be connected to every aspect of your web experience.

It has to collect data from everything you do on the Internet, and every application you use on the Internet.  Because it will be so intrusive, there is a good chance you may not want to delegate control of it to someone else’s cloud.  There are deep privacy issues at work here.  This is the penultimate Little Black Book in everyone’s life.  Dealing with those privacy issues will be very hard.  There needs to be a mechanism for you to delegate just a little bit, but not too much.  And there need to be real controls in place.  ZDNet writes about Facebook apps that ask for your userid and password so they can provide you access to some other service from within Facebook.  People do it, because they like the centralization.  But some of these apps use that information to do a lot more, like root around the other service in ways that are not illegal, but that you never authorized or considered.  In the article, Phil Windley wonders what happens when people give up passwords for things like their 401K account so they can monitor it while they’re in Facebook.  Danger!  Danger Will Robinson!

Your Social Graph may have to be centralized in some way on your own computer.  The web software world hates that idea, the Microsofties would love it, but it may not be a partisan issue so much as a personal asset that must be protected.  Failing that, it may have to be sharded.  Imagine a system like public key cryptography where you can freely distribute parts, but unless they have your key, the parts are useless.  Having a way of controlling the smarts of how these shards get combined and the keys plugged in will be difficult.  This will all be very new and will require much gnashing and moaning to work out fully.  We’re not even close to being able to declare a winner.  It could all get torn down and rebuilt very easily as new models come along that are closer to the ideal.  The ideal system needs to be capable of presenting a single identity to you the user while making it look to the outside world like as many individuals as you choose so that nobody can put together all the pieces of the treasure map.

If we think of the Social Graph as being fragmented into shards, the question arises of how we manipulate it.  There will be a desire to bring it all together, to create a single point of control for users.  Care must be exercised that this doesn’t result in a single point of control for monopolists.  Some sort of central dashboard will be desireable, but the current crop are not quite right either.  Facebook et al are much closer than email, because they are multimedia.  I can recieve messages and other notifications as well as see the news feed.  It seems to me that whatever the final evolution of all this turns out to be, one wants to have some sort of highly personalizable dashboard that has widgets that let you mashup from all the services you belong to whatever it is you want to get out of them.  Don’t take the dashboard as the one and only thing, it’s only a piece.  Stowe Boyd is right and Steve Rubel is wrong:  portals are not the final answer even if they are fine dashboards.

This has to be open.  I have to be able to get my email from my family web account, my email from my business account, my messages from Facebook, my Twitter messages, and all the rest.  While I’m at it, why can’t we finally get a unified inbox that includes my voicemail from all sources too?  This open central dashboard needs to be a jumping off point.  Richer interaction will be possible if I link through to more specialized services.  The dashboard can’t be the be-all end-all either, because it can never do everything.

There are tons of cultural issues at work here too.  The best mechanism to communicate with a particular person is going to be context, content, and recipient dependant.  The recipient will have their own preferences about how they want to be communicated with.  BTW, they need to be able to express that and you need to be able to respect it.  I may tell you to use Twitter for random drivel (“I had a Big Mac for lunch today and I actually liked it”), Facebook for Social Small Talk (“I just got an iPhone and I love it!”), LinkedIn for random business networking (“Does anyone know a good Ruby programmer?”), E-mail for Business Non-Urgent (“We need to meet about your new project, I have some ideas”), or Telephone for Urgent Personal and Business (you get the idea).  The system should be able to review your content and at least narrow the field.  Context is what else is going on both for you and the recipient.  For example, you two work together on a project your boss is urgently looking for an update on and that you’ve just written a message about.  Let’s also don’t forget the idea that different Learning Styles can color your Web preferences.

Summarizing where we are on this in terms of capabilities for the Future Social Graph and attendant software, I come up with:

  • Access to all Internet Interaction.
  • Privacy issues may mean Social Graph is only assembled completely locally.  Meanwhile, out in the Internet, services see only pieces of the puzzle doled out under the control of the owner based on what the owner thinks will be valuable and at the same time safe.
  • Users need to be able to personalize a dashboard using widgets of some kind.  This dashboard needs to let them drill down into the individual services for a much deeper experience.  The dashboard is only there to help them decide when drilldown is needed.
  • The mechanism used to communicate with your Social Graph is content, context, and recipient dependant.

This is a tall order.  See why I don’t think we’re even close to the Real Social Graph yet?  Most of what I’ve touched on here is scarcely even being talked about, let alone available to use.  These are not small issues.  They’re makers and breakers in the world of Silicon Valley Accidental Empires.  The irony is that to make it work, everyone has to quit making their view of it the center of the universe and reach out to all the others.

Posted in Marketing, strategy, Web 2.0 | 7 Comments »

Better Google Searching: Concept vs Literal Search Strategies

Posted by Bob Warfield on November 21, 2007

I was reminded again by Bubble Generation that for many people, Google is getting more spammy and harder to search.  I’ve greatly changed my search habits over the year, and for the better.  I break my searching down into two categories:

– Concept Search:  I want to learn more about a concept without respect to who is talking about it, who owns it, who is selling it, and so on.

– Literal Search:  I want to find something literally: a company, a person, a document, a product, or a specific piece of data such as the incidence of violent crime in Los Angeles.

The reason I start by looking at which kind of search I want to do is that I’ve taken to performing Concept Searching almost exclusively using blog search.  The blogosphere is not quite so penetrated by spam and SEO optimization as mainstream web, so my results are often a lot better.  Also, bloggers do a lot of linking, which means that each good hit immediately yields several great links.  It doesn’t take me long to research a concept this way.  Certainly it’s much faster and more efficient.

Ironically, literal search is less spam-polluted on the mainstream web than concept search, so by restricting my mainstream Google search to literal searches, I get faster better results there too.  I suspect the reason is that it is harder to hijack literals because people own a lot of literal search terms as trademarks and the like.  There are a couple of refinements.

Reviews turn out to be better searched on the blogosphere.  Type any product and the word “review” and the Google results are hopeless.  That’s fine, blogs are great review sources.  Also, for people, I’ve gotten to where I like to type the name and the word “LinkedIn”.  This gets me their LinkedIn profile right out of Google much faster than I can get over to LinkedIn to search.  Often that profile is all I need to make contact with the person or learn a little about their background.

I’ve written about blog searching before, but wanted to pass along the tip again.  It has certainly saved me a lot of time reading bad Google result pages!

Posted in Web 2.0 | 3 Comments »

Ignore What’s Bad for Your Competitors: Do What’s Good for Your Customers

Posted by Bob Warfield on November 20, 2007

Competition is such a mixed blessing.  I’ve been involved with companies that were absolutely consumed by competition.  Borland versus Microsoft in the heyday was an epic battle.  I’ve been involved with companies that frankly didn’t have enough competition.  Callidus had to spend most of the money creating it’s market because competitors were largely idle to nonexistant. 

I was reminded of this today while reading another post about SAP’s TomorrowNow business in the Ponderings of Woodrow.  Woodrow describes TomorrwoNow thusly:

For those playing at home, you know that TomorrowNow is a 3rd party maintenance provider that supports Oracle, Peoplesoft, J.D. Edwards and Siebel products at 50% of the 1st party cost. SAP acquired TomorrowNow with the intention of helping capitalize on the F.U.D. factor created by Oracle’s M&A binge.

You can see that last part is what caught my attention for this post.  SAP acquired TomorrowNow in order to work some mischief on the competition.  It did something more because it would be bad for competitor Oracle than because it would be good for SAP’s customers.  That doesn’t mean it wasn’t good for some customers, but you see my point.

I remember being caught up at one time years ago in a discussion about whether to support OS/2 (remember that?) or Microsoft Windows.  It was clear that Windows was both a superior product and that it was starting to beat OS/2, although it hadn’t at the time closed that gap entirely.  I was arguing strongly for Windows because it was what customers wanted.  Others were arguing that writing apps for Windows was providing aid and comfort to the Evil Empire, and that it could not be countenanced under any circumstances.  Hindsight is, of course, 20/20.  We lost valuable time getting to the Windows platform and our OS/2 efforts were completely wasted.

The next time you are tempted by a complicated and all too clever “the enemy of my enemy is my friend” play, think about the customers.  If they don’t truly benefit enough to make the play worthwhile without any anti-competitor impacts, don’t go there.  It isn’t worth it.  Even big companies can’t really afford the loss of attention on the customer.

Posted in strategy | Leave a Comment »

Prefer iPhone Over Kindle to Read Books? Really?

Posted by Bob Warfield on November 20, 2007

I keep hearing from people wanting to compare the iPhone and Kindle and preferring the iPhone.   VC Fred Wilson is the latest.  I love the iPhone, but I can’t believe someone is really thinking straight if they actually prefer to read books on the much smaller screen of the iPhone.  Sure, the device is sexier, but you can’t even read a web page on it without a lot of finger pinching around.

This just goes to show why the UI designer’s job is so tough.  You can talk about a thing.  You can show pictures of the thing.  But, until people actually use the thing, there is a huge variance in reactions, and most of it is meaningless. 

Posted in saas | Leave a Comment »

How Do We Say, “I Have No Friggin’ Idea”, And Still Sound Smart?

Posted by Bob Warfield on November 19, 2007

Evidently the 5 big questions some marketing types have about Social Computing are:

  1. Does it integrate with our existing marketing strategy?
  2. Does it build our brand?
  3. Does it drive profitable business results?
  4. Can we measure it?
  5. Will it scale?

Am I the only one that read that and felt like if those were the best questions one could ask clearly it meant someone had no idea what they were dealing with?  You hear this kind of well-intentioned hand wringing from stodgy CxO types all the time.  These are the moral equivalent of presenting the CEO with the next great business idea and hearing him come back with, “But will it make us money?”  He doesn’t care to understand the idea, only it’s consequences.  But do you ever really understand the consequences if you don’t understand the idea?  This is the sound of water running like the Niagara Falls through the Chasm.  It’s loud, and it’s scary.  There is a lot of violence in the Chasm.  Crossing the Chasm is usually presented as a problem for the entrepreneur, but there is a different Chasm.  The one I’m speaking of here is even scarier.  It is the Old School failing to keep up with powerful new disruptive forces.  It is the use of the Chasm as a competitive weapon where those on the right side of it have huge competitive advantage over those who are afraid to cross.

If companies can’t depend on their marketing to boldly explore the other side of any disruptive Chasm, who can they count on?  Instead of those bland 5 questions, how about asking these:

1. How should we be changing our existing marketing strategy to deal with an increasingly Web 2.0 world?  What is the competition doing with these new channels and what are the dangers they’ll steal an important advantage on us?  Do we have the right people and talent on board to even understand how to proceed? 

2. How do we leverage Social Computing to build brand?  How has brand building fundamentally changed while we’ve stuck to our traditonal knitting?  How did Google and Facebook get ahead of us so quickly with their brands?  Do we understand viral branding on the web? 

3.  How can we shift marketing from tired old channels to new strategies and save money to increase profitability?  Why are we spending so much money on old style marketing that is hard to measure and hard to associate with real business results.

4.  Now that we can measure what’s happening with programs on the web, how do we use those measurements to drive results?

5.  How fast can we scale our own understanding and expertise in these new messaging channels to get ahead of our competition without getting bogged down on execution?

Beware the Chasm.  It cuts both ways.

Posted in saas | 4 Comments »

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