Hit first, hit hard, keep hitting

I always wonder do the big global multinationals have a war cabinet. And if so how do they operate? Who is the enemy? Who is the friend? Here I mean the big multinationals who are in the new economy and not the old economy of military hardware, manufacturing, energy etc. I mean more like Google, Microsoft, Apple, Facebook, Twitter, MySpace, IBM, Amazon, Dell, HP etc … Observe most of them are American.

Looking at the announcements from the likes of Apple, Amazon, Facebook and Google recently they seem to be at war with each other. Facebook trying to bring down Gmail, Google trying to beat Twitter and Facebook with Buzz, Apple trying to beat Microsoft and Google and so on … It really looks like a Mexican stand-off.

But in this war against each other how do they react to each others moves. With budgets as big as a small country they need to have strategies and thinking which is not too far from managing and defending a country.

I am an admirer of  Admiral John (Jackie) Fisher – generally regarded as one of the greatest admirals in the British Navy. Fisher is primarily celebrated as an innovator, strategist and developer of the navy rather than a seagoing admiral. One of his quotes springs to mind here – “Hit first, hit hard and keep hitting“. Now I truly believe in doing that to your competition. It is not survival it’s winning I care about when running a company. So does any of these biggie’s have such strategies and do they have admirals like Jackie who think like this?

Do the Biggie’s have a war cabinet? is a post from: @chirdeep

The world is Web2.0 business is full of a single most frustrating statement – I know how to build but how do I sell? While a lot can be said about putting the product in front of your customer and test test test. One aspect of such tests is forgotten more often than now – proper feedback and what to take from it.

Feedback from your potential customer is very important. Which is why we have a crazy number of market research companies and people spending a lot of time finishing and polishing business plans. There are a huge number of people sending out surveys – right from large brands to the tinniest of start ups. I have been flooded with some of these surveys lately and on a close inspection most of them make no sense at all. Almost all questions are about – Would you like this x feature in the product? Do you value x feature in the product? Which of the features is most important to you? etc etc … But the most important question – “Do you need or value this product or service?” rarely ever gets asked.

This reminds me of a survey from someone wanting to start a a Pizza store in Germany. All questions pertained to “What sausage would you like on your pizza?” And they went away excited at what people wanted and started the store only to see nobody buying the pizzas. Who would want a pizza with sausages anyway? So they asked the wrong questions. The first questions should have been – Would you like sausages in your pizza?

To top it all – the most stoopid surveys are for women – trying to gauge their likes and dislikes in technology products. Always starting from the wrong end of things (colour matching a favourite) and patronising. Now will you get a correct feedback with that? No wonder none of them understand women customers.

Useless Feedback is a post from: @chirdeep

While this might sound odd and unbelievable to many I think Microsoft will do good to buy Zoho. While Zoho faces competition from Google with it’s Google apps there have been numerous complaints form customers about lack of proper integration between the various apps and with gmail which is quite frustrating to the enterprise user. Google has also been playing catch up with Zoho in terms of bringing in new apps and still lacks the complete office suite that Zoho does – including project management, CRM, marketplace etc. While Salesforce has a great SaaS product they will be beaten by Zoho soon as they lack the complete suite that Zoho seems unbeatable at. While Zoho has been slow at some products like Zoho mail, they have finally understood what the customer is really looking for.

I think Microsoft will try to buy Zoho. Microsoft has promised to release a free online version of their next MS Office but even they will struggle to integrate the suite well enough to meet the needs of a SME who is today moving to Google apps/ Zoho etc. While this makes commercial sense – Microsoft will be afraid of going for such a deal as the stock market will perceive them to be unable to build such a product themselves and see it as a sign of weakness. Which this might be true, but I still think they will be stupid not to approach Zoho.

Will Microsoft buy Zoho? is a post from: @chirdeep

A lot of business plans we see are a technology push where we have a technology in search of a problem and customer. The way to build a business and put together a business plan is to detail a customer problem/pain and look for possible solutions. Any solution found should have a way to acquire and retain customers. Also such a solution should if possible ride on an existing related growing solution to a customer problem and customer retention solutions. Once you retain customers business models to monetize will follow.

At the heart most business plans is customer adoption and not customer retention. Entrepreneurs and investors alike do not understand how behaviors change after adoption. Social networks, e-commerce portals and other internet portals are typical examples of businesses where entrepreneurs need to be able to come up with plans for keeping up with growth in customer adoption which can move from being linear to exponential very quickly. One needs to come up with scenarios and lead indicators to see which behaviors are being enacted to then bring in actions to grow further, lead and win in the market. Adoption does not guarantee winning it guarantees survival, retention guarantees us a win. It’s a theme even investor’s overlook while funding companies.

Amazon.com is one of the best examples of successful customer adoption, retention and continuous change and adaption to keep retention up while understanding how to react to exponential growth from a very linear growth pattern. This is still a challenge for Twitter and Facebook while retention is still up we will need to see what new innovative services and products they come up with to maintain this retention while keeping growth high so monetization can follow . Friends Reunited is an example of good customer adoption which then did not keep up the innovation in bringing new ways to retain customers and got stuck in ways to make money without understanding how to retain customers while the likes of Facebook, Bebo and Myspace too over most of their regular customers.  While all above is known fact – the issue I am trying to point out is that most such companies have no plan to understand indicators of exponential growth and no plan to understand how customer retention is important. There is a need also to understand that customer retention comes from not being stagnant but by keeping innovation up and bringing in new products and services regularly. Is it any surprise that Bebo and Myspace will keep seeing retention numbers go down?

Adoption vs Retention is a post from: @chirdeep

There is a pattern of how founders of internet and media companies think. The traditional way in which founders think of a start-up is – have an idea, raise some money, develop product, release alpha and beta and then get the first customer. This has been the product development model that has been followed by most of us. But why is it then that while all follow the above model some start-ups are successful while others are not? What is the difference between companies doing all of the above in the model? Is there any way to predict success or failure? Is there any way to reduce risk in early stage companies?

Some patterns keep coming up in early stage companies. Most entrepreneurs (founders and CEO’s) are focused on one thing – Getting to launch and getting the first customer. That is the single-minded drive for engineering, the management and the board. Another pattern is that such companies hire sales, marketing and business development staff based on the product development cycle/process as above. Around alpha/beta stage companies start hiring marketing, sales, get ready for launch, hire ad agency, blog, hold launch events etc.

When a start-up gets its product to beta the entire company parties. Who is done at this stage? Marketing? Business development? Sales? Only people who are done are engineering. Most start-ups have no way of managing the risk of getting the market and customers right. Why is it that we have tonnes of methodologies to measure and to help us get the products right but no methodologies to help us get the stuff about our customers and market right?

Start-ups use the tools from product management companies that have come up with lots of tools on how to manage technology risk but have almost no tools to manage customer and market risks.

Most often start-ups think of themselves as a junior version of a large company. The tools and processes for business development, sales and marketing in a large company are not transferable to a small company. So the assumption that expanding the sales team will increase the sales in fixed increments is false. What start-ups need is a customer champion as their sales, marketing and business development equivalents. A customer champion says we do not know who our customers are and we need to go out there and find them.

A customer champion needs to do three things

• Customer creation and Company building

Customer creation is all about how do we create demand for our companies’ products and services? Any type of talking about your company is not done over day one or even when the product is built – on techcrunch kind of blogs. You hypothesis about – What your company is about, what services you are offering, pricing – will be radically different after you have some contact with your customers. Any press you get as a part of your company has to be part of a strategy and not a random tactic. Typically after you have understood what business you are in, who your customers are, and how you need to scale demand for your company.

Entrepreneurs are usually good at finding opportunities and building something from scratch but not at growing something repeatable. What a customer champion needs to be good at is running a “lean start-up” which combines customer development with agile methodologies for internal development and very quickly iterate its customers feedback and massive number of releases in a day/week.

• Customer Discovery

Listen to your customer – you might be selling something but you need to listen to what your customers actually want. To find out if customers like your idea/product or not is not an outsourcable problem – the founders need to do this. Particularly the people capable of changing strategy need to be the ones securing good news and bad news.

• Customer Validation

Customer feedback sometimes requires you to reengineer the product. And this requires engineering in as a partner to do so. But you only want to do that when you are convinced that you understand enough about the customer and market so you are not just tweaking it for random customers.

In early stage ventures – Just passion, agility, personal skills of the entrepreneur etc is not enough you need logic and ask yourself one question every morning and evening – how do I keep reducing the risks. This will in effect lead to a tailored customer development process unique to each start-up and thus a customer creation methodology. The job of a CEO is risk reduction at each and every stage till he/she makes an exit. In my personal opinion the founder should leave the job of a CEO as soon as possible and become the biggest customer champion of his company.

So who is your customer champion? is a post from: @chirdeep