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Archive for February, 2009

It’s Tough to Be a Big Company: They Don’t Get No Respect

Posted by Bob Warfield on February 4, 2009

Om Malik recently tweeted:

I think google has no big ideas. this morning they announced a to-do-list. FGS. [For God Sake] Remember the Milk MUCH better.

This touched off a backlash from Google’s ardent supporters who beg to differ, and Om writes about it this morning.

I like Om’s definition of what he means by “big ideas”:

For me, startups and products such as Skype, Flickr and YouTube represent big ideas. Why? Because they not only redefine our notions about certain technologies, but they also change our behavior and cause massive disruption.

Google veteran Matt Cutts responds with what he thinks of as Google’s latest big ideas:

* Google is funding research on the Singularity.
* Google mapping the oceans for Google Maps.
* Google’s research into deep web/dark web.
* Gmail’s offline availability.
* Google tool to measure broadband, especially useful now that more and more broadband providers are looking to shift to a metered broadband model.
* Google’s Android Mobile Operating System.
* Google Chrome, a fast web browser with a distinct philosophy of ease-of-use and radically improved security abstractions.

Om tries hard to be magnanimous with these, but I’m sorry, none of them resonate with me as a Big Idea.  None of them are redefining or disruptive.  Many of them are just Google’s version of something somebody else did first.  Android is just another Smart Phone so far, and the iPhone or earlier the Blackberry get the prize for being redefining and disruptive.  Chrome?  Some interesting features, but as Om points out, not redefining or disruptive any more than Mozilla or other browsers.  Mapping the oceans?  Oh come on.  I’ve been able to buy ocean maps at the Monterey Aquarium for a long time now.  Sure its cool to have them online and free, but redefining?  Disruptive?  I don’t think so.  Gmail offline, not close.  Most of the blogs posts about it were along the lines of “finally, Google does what others have been doing.”

This talk gives me a strange sense of Deja Vu.  I’ve heard it all before.  The best example, back when people used to talk much about it, was Microsoft.  “What is Microsoft going to innovate?” became, “When is Microsoft going to innovate?” which ultimately became, “Microsoft doesn’t innovate.”

And there you have it.  It’s tough to be a big company.  As Rodney Dangerfield used to say, “They don’t get no respect.” 

Just one more downside of the Innovator’s Dilemma.

In Microsoft’s case, the speculation was that it was the culture.  To much command and control.  Too top down.  How can this be true for Google?  It’s just the opposite, some would say to a fault from the standpoint of economic efficiency.  They have all that 20% time available to innovate almost anything. 

Yet is isn’t happening, because real redefining and disruptive innovation is really really hard and very rare.  It can’t be scheduled.  It’s not a job and you can’t hire for it.  It’s a passion.  It’s vision not mechanical process.  It is more than just craftsmanship and building it.  It is art and creation.  It burns in the belly of whomever has the real innovative spirit.  It seldom happens with the same person more than once.  It’s problematic for large corporations to nurture it, although there are notable examples of corporations that have managed to including Xerox with PARC, IBM, and Bell Labs.  In many cases those same organizations failed to capitalize on their innovations, but at least they were making them.

What was it about their cultures that spurred innovation so unusually well?  I don’t have the recipe.  Perhaps there isn’t any recipe and those organizations had so much innovation just because they were lucky.  Lucky to have a bunch of innovators all in one place for a time.

If there were a recipe, I suspect one ingredient it would have is to avoid doing the same better.  Once a thing is mainstream, better is not innovation.  Start from things not mainstream.  Start from things perhaps not even possible in the mainstream.  Take a ridiculous amount of computing power for the day, give it to one single person, and ask how that changes the software for that computer.  You’d be looking at something similar to what happened at Xerox to create windowed user interfaces.  Or, you’d be looking at the first Macintosh, which was astonishing, but almost didn’t work it was so close to the limits of what was possible in that time.  Look for things people say can’t be done, and do them anyway. 

Forget profit.  Forget stock options.  They don’t factor into innovation in this sense.  The failure rate will be huge.  But the rewards if you succeed will also be huge.  If nothing else, you’ll have satisfied your passion.

Related Articles

Dare misses the plot by ignoring “disruptive” and focusing on original.  Om is still right about Big Ideas.  Being original but not disruptive is doing something nobody cares about.  If you’re disruptive, its because your customers love you.  He labels the iPod and iPhone as not original, and therefore not Big Ideas.  But they were different enough and disruptive enough to be Big Ideas.  They were not just the same thing better.  My first iPod bore no resemblance to my Nomad MP3 player, which I liked very well at the time.  But the Nomad just wasn’t a Big Idea.

Posted in business, strategy, venture | 11 Comments »

What Business Strategies Does this Economy Call For? Get Strong Fast!

Posted by Bob Warfield on February 3, 2009

These are confusing times at best, and depressing times at worst for some.  Patterns are hard to come by.  I spend a lot of time keeping my ear to the ground via networking.  I look for underlying trends and try to make sense of what they mean for strategy.  Often the pressures of the bad economy lead to strong beliefs that are completely conflicted from one conversation to the next.  In other words, the noise level is extremely high.

One of the biggest examples of this contradictory feedback comes from the quarterly results of various companies.  IBM does extremely well.  Apple likewise.  Google, pretty good.  Microsoft, disaster to the point Techcrunch is composing verse about it.  What’s the pattern there?  It’s hard to see until you really dig down, but it looks to me like it’s a matter of the strong getting stronger and the weak getting weaker.  It’s a momentum play, with the momentum hugely amplified by the web, which reduces the friction of learning who is strong and who is weak.  Strength is not simply a function of financial strength.  Microsoft is as strong or stronger than any of these companies when it comes to cash and their ability to generate more cash, but their momentum is not to the upside.  This is more a matter of strength as viewed from the base of potential customers.  Perhaps it is an amalgam of momentum, customer satisfaction, and expectations for the future. 

Define it how you will, but IBM clearly has been strong and getting stronger.  Their sevices-and-software-over-hardware strategy is working.  Apple, despite Steve Jobs’ health problems, is strong.  Every time I turn around I’m meeting someone else recently converted to using a Mac laptop or having just purchased an iPhone.  They’re loving it.  Google, is in an interesting position.  They’re near the fulcrum of the tipping point, slightly on the positive side.  Their core franchises are strong, but the market sees that there isn’t a tremendous amount of life left there.  They want to believe Google will invent enough great new things to carry on, but they’re less sure.  Then there is Microsoft.  Steve Ballmer, it’s time to get your house in order, for its been a long time now in disarray.  You’ve fundamentally missed both the Internet and Open Source movements completely.  You’re in the middle of missing the SaaS and Cloud movements.  I’m not sure how many megatrends an organization can miss and remain intact no matter how good their core franchises are.  Especially since these megatrends are corrosive to those core franchises.  Ironically, as I was writing this very passage, IE7 announced an abnormal termination and crashed.  Fortunately, WordPress didn’t lose a single character, which is testimony to that particular cloud app, though not that unusual among cloud apps.  Guess which company I think is stronger? 

Think about your organization.  Are you strong?  Are you aligned with the megatrends?  Or are you defensive?  There is still a lot of fight left in the On-premises versus SaaS melee.  Some days it almost seems like the on-premises guys want to completely discount SaaS as a fad that will fail shortly.  But then we see SAP’s results, Oracle’s results, and’s results.  If SaaS is just a fad, why doesn’t it fail now, under the harsh spotlight that is this economy?  Which companies are stronger, SaaS or On-premises?

Like so many things that are factors in our success, “Strong” is a function of perception.  It’s hard to measure objective facts and come up with a true “Index of Strength”.  But it’s not hard to recognize Strong qualitatively or intuitively.

Strength in this economy is measured in another important way.  I’ve heard over and over again about how hard it is to acquire new customers.  If they come at all, they require a lot of convincing.  Skepticism is at an all-time high.  Perhaps this is another way to explain the strong versus week phenomenon.  The strong have given people a reason to believe, while the weak have given them reasons to doubt.  This translates directly into important strategy changes for the economy, some are taken from the playbooks of earlier economic downturns, others are much fresher.

First and foremost is the shift of companies in what they are looking to buy.  Cost savings is the benefit on everybody’s lips.  This is one of the ones from earlier playbooks.  We’ve seen it before.  It is closely allied with Hard ROI.  If your solution doesn’t deliver a real measurable benefit, a Hard ROI, that’s a problem.  If you can deliver immediate cost savings, that’s a Hard ROI.  If you can deliver top line revenue growth like a Zuberance, so much the better.  My company, Helpstream, has worked hard on delivering Hard ROI.  It hasn’t been enough simply to enable our product to deliver savings in Customer Service.  We went on to measure and document that savings in our installed base.  We even went so far as to enable the product to measure the ROI for customers and show that to them on a standard report.  Because of that, we’re one of the few Enterprise 2.0 or Social Media startups that I know of that can talk concretely about ROI.  That’s the sort of reason to believe that’s needed in this economy. 

Given a Hard ROI proposition to sell, the next question becomes reaching the right prospects.  This goes back to the Strong versus Weak idea.  Which prospects are most likely to view you as Strong?  Properly segmenting your market, and making sure you’re calling on prospects most predisposed to view you as Strong is essential.  We’ve seen this clearly at Helpstream.  Sales calls have tended to be bipolar.  If we’re talking to the right audience, they get our ROI proposition immediately and want to move quickly.  If not, we’re pushing a rope uphill.  In our case, Marketing Automation companies really understand what we’re doing with Community and the Web Channel very clearly.  We’ve closed InfusionSoft, Marketo, and several others.  Each one of them, by the way, also seems to be doing well despite the economy. 

This concentration of Marketing Automation companies brings to light another important strategy for Strength:  focus on micro segments until they reach a tipping point.  People in a microsegment are part of a community.  They know each other.  They change jobs inside that community.  They share a common language about what they do, and a common perception of what they need.  Each one you close in a micro segment makes the next one a little easier.  Focusing on pushing micro segments (or even relatively large verticals) is an effective strategy that I’ve seen work in a number of companies I’ve been involved with, but it works especially well in down economies because people need as much credibility as possible to buy.  Micro segments deliver that credibility by showing that others like your prospects have bought and been successful with the product.

This brings me to my last strategic observation.  It’s another one from the old playbooks.  A lot of people are saying it at the moment:

Now is the time to focus on your existing customers.  Make sure they are happy.  Make them happier still.   And ask for their help.

Seth Godin has two recent posts along these lines.

Others have echoed similar themes.  Guy Kawasaki’s list of 10 things that indicate a CEO is clueless are related.  Even better is his list of 6 things a small business CEO should be saying now.  They play well against this backdrop:

1.  We’ll never raise another nickel.  In other words, we have to get that Hard ROI out of everything we do.

2.  The marketing budget is 0, but we still have to get to market.  More Hard ROI, and Social Media is mentioned directly.  The key to this kind of marketing is the micro segmenting idea targeted at communities that can be reached online via your existing customers.

3.  Engineering needs to make something so compelling that the $0 marketing budget is not a problem.  We have to deliver a product that has Hard ROI!

There is more, but you get the idea.

What else could your startup be doing right now to make itself strong? 

Chris Cabrera at Xactly had an interesting take on it–he went out and bought his nearest competitor and effectively doubled the size of his company.  That’s strong!

Twitter is raising another round at a $250M valuation.  That’s strong!

Posted in business, Marketing, saas | 3 Comments »

A Very Prosaic Side Benefit of GDrive for Google

Posted by Bob Warfield on February 1, 2009

The almost mythical Google GDrive seems to be resurfacing.  Rumors are flying that Google will shortly introduce storage in the cloud for the masses.  Apparently the code name for the project is “platypus“, which doesn’t necessarily bode well for its elegance, at least from a name standpoint.

Is this a big event? 

RWWeb speculates that Google is finally big enough to make the solution credible to the masses, but that analysis misses the boat.   They link to a list of Cloud storage solutions that they say is all “small and medium sized” businesses.  Just one problem with that theory:  one of the competitors is Microsoft (last I checked they’re still bigger than Google, though through no fault of their own), and they flat out forgot to mention Mozy, which is owned by EMC and has been on the scene for a while.  Sure Google is big, but so is Microsoft and Mozy, and there is also JungleDisk which works with Amazon, another big company and bigger than any of the others when it comes to their track record of delivering Cloud storage.

Fellow Enterprise Irregular Larry Dignan puts it into a little more objective perspective when he says:

Am I missing something here? It’s an online backup service, one of many. 

Brian Ussery made a nice find and now the speculation is rampant.

Sure it’s possible that GDrive changes the world. Then again it’s also possible that GDrive will just be another online storage system with a Google logo on it. 

I realize that every time Eric Schmidt has gas it garners a headline. But c’mon. We’re talking online backup up here. 

Apple has it. EMC via Mozy has it. Dell has it. Pick a vendor and everyone has some spin on the online storage thing. 

Heck, this particular version as described in the Platypus document is even all that innovative.  My buddies over at SoonR have shown what you can really do once you get your data in the Cloud.  Now their stuff is cool!  I still remember bugging out when Song Huang showed me a PowerPoint preson on a Motorola Dumb Phone.  How can that Dumb Phone do those smart things?  They’ve since gone on to make even Smart Phones do amazing things.  Song always has a bag full of phones and I never miss a chance to learn new crazy things about the mobile world from him.  The latest trick, sharing files via SMS.  Who would’ve thunk it?

Om Malik is on a more interesting track.  He has quit worrying about whether GDrive will change the world and started wondering what’s in it for Google.  After all, times is tough even at the Big “G”, so there better be some real strategic or monetary return for this GDrive thing to make sense.  Om says any ad revenues are meaningless to Google from this source.  They just won’t amount to much.  Here is Om’s view of the grand strategy behind GDrive:

I believe Google is looking to build something unique, a service that it would position as a direct competitor to not only Microsoft’s SkyDrive and Live Mesh services, but to the software giant’s SharePoint services. My guess would be that they would marry GDrive storage with Google Apps and other applications, such as Google Talk. In doing so they’d create a virtual “computing environment” in the cloud.

He goes on to worry about Google getting too big by quoting Mark Evans:

“Before you know it, Google has become a daily and integral part of your digital portfolio. Not that this a bad thing given Google’s products are really good but it should make you think about how dependent you can become on Google for pretty much everything. The downside is you can lose access to a lot of essential information if Google, for whatever reason, locks you out.”

Wow, all that World Domination from a little virtual storage in the Cloud that so far has no remarkable features?  Hmmm.

Sorry Om, Mark, and all the rest, I’m with Larry Dignan.  Get Real.  Big bad Google has achieved minimal penetration with Apps.  In fact, the further they stray from pure web activity, the less successful they seem to be in terms of wiping out competition.

I’ve written about the problems with Google Apps before.  You can’t build a Microsoft Office Killer without being 100% compatible and interoperable, and so far, none of the Office Cloud Competitors are Compatible.  It’s a silly business, really.  I caught up with one of the original Quattro Pro team I hadn’t heard from in years, and we were shaking our heads.  We started out in a tiny little company I founded called Surpass with a team of less than 10 and built a 100% compatible product that Borland bought and turned into Quattro Pro.  Why can’t a giant company like Google manage to build a compatible offering?

As I was reading about GDrive and thinking about what they may hope to gain, I was reminded of another article I read about Google.  Sorry if I’ve lost the link, but there is an analagous scenario out there.  Google has a free 411 service where you can call for information at 1-800-GOOG-411.  Why would Google want a 411 service?  It isn’t even on the web, for crying out loud!

It seems the answer is pretty prosaic.  They wanted to record all kinds of voice snippets that were tied to a limited domain–the list of possible hits for a 411 service.  Doing so would help them perfect technology to improve search on videos and podcasts because they could recognize what was being said in them and search on those words.

Are you beginning to see where I’m going with this?  How does GDrive help Google Apps?  It lets them get a whole bunch of files to test Google Apps compatibility.  As a matter of fact, it does a lot more than that.  It will give Google unprecedented insight into what the world thinks is valuable enough that they want it backed up in the Clouds, or accessible from the Clouds.  They’ll know exactly which file formats to support, and which features of the apps that use the file formats are the most commonly used.  All of that, of course, will be tied to you identity, so they know even more about you.  Are your backups mostly photographs?  That’s valuable information for marketing.  Do you have a ton of spreadsheets?  Another box gets ticked on who you are.  Aha, here is the person with tons of PowerPoint files, could she be an executive?  And this one has lots of Adobe Photoshop and Dreamweaver, must be a web designer. 

Fascinating stuff.  There’s no end to the Google appetite to map all of the information on every computer anywhere.  GDrive lets them map your desktop.

Posted in cloud | 3 Comments »

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