Category Archives: Product Marketing

The secret to Apple’s success?

If there’s one company that is the envy of the high-tech community these days, it’s Apple.  Steve Jobs is hailed as a genius CEO and lauded for a string of hit products. Apple’s market capitalization is over $200 BILLION dollars currently, easily ranking it in the top 10 companies in the world by market cap, and just shy of Microsoft for biggest technology company.

Everyone wants to understand the secrets of Apple’s success and hopefully emulate them. The reasons given by people for Apple’s success are many. The following are a few of the arguments made:

1. Vertical integration – Apple owns most of, if not the entire, technology stack for its key products,  and thus gives it advantages over other less vertically integrated products.

NOTE: “Vertical integration” used to be called “being proprietary” and was given as the reason for Apple’s relative lack of success against Microsoft in the OS/PC battles of the 80s and 9os. But phenomenal success has a way of changing people’s minds.

2. Making markets vs.  addressing markets – Some claim that Apple doesn’t ask people what they need but gives them products they decide they want.

Does anyone NEED an iPhone or iPad? Not really, but a lot of people seem to want them.

3. The Cool Factor – Let’s face it, Apple does make “cool” products. Attention to design and detail – fit and finish as they say – really distinguishes Apple’s products from competitors.

4. Entering markets after they’ve developed — Contrary to #2 above, some people claim that Apple doesn’t make markets but enters existing markets once they’re growing and takes  advantage of latent demand.

The iPod was not the first digital music player and the iPhone was not the first smart phone, and the iPad is not the first portable computing device. In the case of the iPad, products like the Kindle and Netbooks actually paved the way for the market to accept  small computing devices, and Apple’s iPad is riding that wave.

5. Differentiated business models – whether it was iPod+iTunes or the iPhone+App Store, Apple innovates not just on technology, but on the business model. This makes it difficult for competitors to play catch up, let alone overtake Apple once it establishes itself in a dominant position.

6. People care about the experience not technology — Apple has always been about the user experience, but for a long time, the majority of the market didn’t care about that.

The majority of desktop computer users cared about “techs and specs”.  Now the tables have turned, and the majority don’t care about the specs, they care about the experience. The iPod, with it’s “1000 songs in your pocket” motto and iTunes which radically simplified purchasing music latched onto the experience wave, and Apple has been riding it ever since.

7. Simple product offerings – Apple has a very clear and simple set of products. It’s easy to understand the differences between their products, product families and the various configurations. This makes it easy to buy an Apple product if you want to.

A lot of companies complicate things unnecessarily. How many iPhone models are there? How many Blackberry models are there? How many Nokia smart phone models are there? See the difference between Apple, RIM and Nokia?

The same is true for the iMAc, the iPod and the iPad. Granted, there are actually a number of iPod models (Nano, Shuffle, Touch etc.) but they are very distinct amongst themselves. This can’t be said for digital music players from other companies.

I’m sure there are other reasons for Apple’s success, but it’s interesting to see how much debate is happening today on this topic. What it says to me is that there is no single reason for their success. And keep in mind that Apple has had failures as well.  Notice Apple doesn’t talk much about Apple TV. And remember the G4 Cube? The 20th Anniversary Mac?  Even the ultracool MacBook Air has had far from stellar success.

So, what do you think are the reasons for Apple’s incredible success over the last 10 years?

Saeed

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Disruptive business model: Lew Cirne, serial entrepreneur on the future of Enterprise Software

Lewis Cirne (@sweetlew) believes that enterprise software needs to change, and his latest venture, New Relic, has blazed a path to do just that.

DOWNLOAD AND LISTEN to the interview with Lewis Cirne.

Lew’s first company, Wily Technology, was a classic garage-based tech startup (actually started in his living room in Santa Cruz) that grew from one person to 300+ people before being acquired by CA in 2006 for $375M. (Full disclosure: I worked for Wily as director of strategy from 2003 through the exit.)

After a year with CA and some time off to reflect, Lew started again, solving a similar business problem, but with a mission to hack out the massive cost of sales associated with most enterprise software.  Lew points his team to the craftsmanship of the iPhone, and the friction-free design of Facebook and Twitter as models for New Relic’s enterprise offering, and in fact his lead investor is Peter Fenton of Benchmark Capital who also led a huge round for Twitter in 2009.

New Relic is now 2 years old and has over 4,200 customers*. Lew tells us that this approach eliminates as much as 80% of the delivery costs, and takes months out of the innovation cycle. Is the model sustainable? What kind of exits are available to SaaS-based enterprise software companies? What does this model mean to the future of enterprise software?

Check out Lew’s answers in this episode of Take 5: our conversation on leadership, technology, and product management.

DOWNLOAD AND LISTEN to the full interview with Lewis Cirne.

* Errata: The audio uses the number of 40,000 websites; this was my error. Lew wrote me to clear this up: “We collect data on more than 40,000 JVM’s or Ruby Instances every minute, which does not correlate 1:1 with applications. (Many apps aggregate across multiple JVM’s or Ruby runtimes.) I use the 40,000 number to talk about the scale of the data we collect, rather than the size of our customer base. I don’t have up-to-date numbers on the number of actual apps we collect data on, but I would imagine that it’s over 5,000 since we have nearly 4200 production customers now and some of them have multiple apps (some have dozens in a single account). Anyway, just want to be sure we’re not over-representing ourselves.)”
Thanks Lew! Alan

Product Management Metrics (part 2a)

My  conference call on PM Metrics with Tom Grant went quite well yesterday. It was a round table discussion with good points made by several participants.

While we did talk about a number of topics, the metrics discussion dominated the first 1/2 of the call.

One of the questions  — What metrics should be used to measure the effectiveness of Product Managers? — got me thinking a bit.

My answer on the call was that first the focus should be on metrics for the Product Management organization, and then a breakdown from there on metrics for individuals based on objectives and tasks that support the goals of the organization.

To me that seems like a logical approach, because all other organizations in a company, includes sales, marketing, technical support etc. have metrics defined and measured that way.

So what’s the problem?

So why is it so hard to come up with metrics for the Product Management organization? Well,  it goes to the heart of the major issue with hi-tech Product Management today.

And that is that most companies don’t look at Product Management as a holistic function within the company, but rather as a set of individuals or small teams working on a variety of product related tasks.

Look around and see how the focus of Product Management is different in different companies.

Look at how widely the reporting and organizational structures are for Product Management. It is part of Marketing in some companies, part of Engineering in others, a standalone department in others.

Look at the ongoing debates related to when Product Management roles should be defined and introduced in a company.

If you’ve worked in or have been exposed to Product Management in different companies, compare and contrast the tool sets (or lack of them) used by Product Management organizations versus the tools used by other departments to do their jobs.

And if people don’t look at Product Management and it’s objectives in any holistic and standard way, how can they set about defining and measuring key metrics for the Product Management organization?

Metrics should focus on measuring intended outcomes

For Sales organizations, the key metrics  (product sales/bookings etc.) are directly tied to the intended outcome of the function: generating sales and revenue.  There are numerous secondary metrics that are tracked such as  sales breakdown by product/product family, by deal size, by geography, by new vs. existing customer etc.

And don’t forget all the sales funnel metrics that are used to track progress and success, such as average time to close, win/loss ratio etc. The important metrics are clearly tied to the intended outcomes of the activity of the sales organization.

For marketers it’s a bit more complicated because there are different roles in marketing and different intended outcomes. The two primary outcomes that can be applied to marketing are related to lead generation and market/industry awareness.

And from there numerous metrics can be identified related to number of leads, cost per lead, lead quality, lead to prospect conversion ratio etc.

Metrics for awareness are numerous, but basic metrics focus on “mentions” by press, analysts and other influencers in publications, reports, blogs, and via social media such as Facebook and Twitter.

And what of Product Management?

What is the primary objective of Product Management? In a previous article on this blog entitled Product Management Metrics (part 1), I defined the mandate of Product Management as:

To optimize the business at a product, product line or product portfolio level over the product lifecycle.

Don Vendetti of Product Arts, wrote a series of guest posts, entitled Measuring Product Management. In part 3 of his series, he provided his definition of the Product Management mandate:

To deliver measurable business results through product solutions that meet both market needs and company goals.

I like Don’s definition.  Both definitions share the same spirit about business focus,  but Don’s phrasing is clearer and more explicit than mine. But I do think that mention of the product lifecycle is needed because that has a huge impact on the objectives and the required focus of Product Management.

Don’s use of the words “measurable business results” is crucial to this discussion.

So what are those business results? Well it depends on the business and the company goals. 🙂

Those goals depend on the many things. Some companies care about revenue. Others care about market share. Others care about profitability. Others only care about getting acquired. And those goals can change with time.

Some choose to be technology focused, while others are sales, marketing or market focused. Some companies have a single product, while others have portfolios of products.

Depending on the company’s goals, size and level of maturity, the market conditions, it’s financial status and it’s overall strategy, Product Management’s objectives will change and so the metrics to measure Product Management will also change.

I’ll stop here, but I’ll pick up this discussion in an upcoming, and long overdue post that will be entitled Product Management Metrics (part 3).

Make sure you read Part 1 and Part 2. 🙂

Saeed

Product Management metrics with Tom Grant

On Wed. May 5, I will be participating in a live teleconference with Forrester Analyst Tom Grant and a number of his clients.

We’ll be discussing a number of issues related to Product Management, but focusing on metrics that are important to the field of technology product management.

I’m looking forward to the discussion and hope to learn as much as I contribute.

You can find more information about the call on Tom’s Forrester blog.

Saeed

Crowdsourcing ideas for Canada’s future

Yesterday, I posted Canada’s Innovation Gap (part 3) where I discussed some ideas for solving the lack of innovation that exists in Canada.

This weekend, the Liberal Party of Canada is hosting a conference in Montreal focusing on Canada’s future.  The conference is called Canada at 150: Rising to the Challenge. It’s a non-partisan conference bringing people from different industries,  political views and areas of Canada together to discuss 5 key challenges related to the nation. Those challenges are:

  • Jobs Today and Tomorrow: the Productive Society of 2017
  • Real life issues for Canadian families: How do we care?
  • Energy, Environment, economy: Growth and Responsibility in 2017
  • The Creative and Competitive economy
  • A strong presence in the world of 2017: Commerce, values, and relationships

What’s great about this is the relatively open process they’ve used to get the participation from all parts of the country. Clearly with an agenda like this, the topic of innovation was discussed.

The following panel discussion, along with Q&A is well worth watching. Some really frank and honest comments are made.

(click on the image or click here to go to the video. NOTE: The first minute or so is in French and then it moves into an English discussion. )

A great comment from the early part of the discussion came from panelist Roger Martin, Dean of the Rotman School of Management, University of Toronto.  He gives his definition of innovation and invention.

Innovation does not equal invention.  Invention is producer driven. Someone says, I want to have some kind of gadget. And they dream it up in their lab or basement or garage. And it may not be of interest to anyone else. That’s invention.

Innovation is driven from the user or the consumer side…it’s about improving the experience of the end user or consumer.

Note the point that innovation is driven from the user or consumer perspective. It doesn’t mean they drive the innovation, but that their needs must be central to the innovation process.

Later on, when answering a question about the role of taxpayers and the government in helping spur innovation, Martin says quite bluntly:

I made the distinction earlier about invention and innovation. The problem for Canada and it’s been this way for a long time is we don’t have an innovation policy in Canada. Unless you call benign neglect a policy. We have an invention policy and in fact all of our money goes for invention and that’s the gross error.

I love this statement as it’s so straight forward and unapologetic. We need more people like Martin to speak out this way.

I strongly recommend listening to the full discussion. They discuss value of design in new product development, the reasons for lack of commercial success for Canadian “invention”, the sad state of the VC industry in Canada and much more. It’s very honest and in many places quite astute, and I feel, long overdue.

Saeed

Canada’s Innovation Gap (part 3)

Innovation GapNOTE: This is a bit of a long post, but it is also long overdue. In it, I present some needed steps to address the innovation issue in Canada. So, bear with me on the length and I really would like to hear your thoughts on the topic.

Back in the fall, I wrote part 1 and part 2 of this series.

Part 1 talked about the overall problem that was described in an article in the Globe and Mail on the same topic.

In part 2, I wrote about the Conference Board of Canada’s annual study entitled How Canada Performs,  A Report Card on Canada, and in particular Canada’s consistently miserable ranking on Innovation.

The final numbers for the 2009 Report Card are finally(!) out, and yet again, Canada scores a D on Innovation.

(click to enlarge)

Here’s a video from 2008 describing the issues identified in the report. Nothing has changed from 2008 to 2009 so the comments are still valid.

According the video above, The biggest problem Canada faces regarding innovation is:

our failure to turn good ideas into products and services that can be sold on the world markets.

Did Edison actually invent the lightbulb?

Here’s a story to illustrate this point. I’m sure you’ve heard of Thomas Edison. Who hasn’t?

But have you heard of James Woodward or Thomas Evans? Probably not.

Woodward and Evans, two Canadians living in Toronto in the 1870s created the first electric lamp with a shaped rod of carbon held between electrodes in a glass bulb. The gas in the bulb was nitrogen. They patented this invention in Canada in 1874.

They tried to raise capital to form a company to further research and develop the product, but were met with ridicule. Who could possibly use such a thing?

In 1876 Woodward received a US patent for the invention. In 1879 Edison bought out the patent completely and used it in his own pursuit of electric light.

It’s important to note that Edison was working simultaneously on his own electric light as was British inventor Sir Joseph Swan. In 1880, Swan and Edison teamed up to create the first commercially viable bulb.

So did Edison “invent” the lightbulb? Clearly no. But he was the first to bring a viable bulb to market and make it available to the masses. And that’s why he’s remembered for the lightbulb, and Woodward and Evans are not.

Groundhog Day all over again?

This story, unfortunately, has been repeated many times over since the 1880s. There are many similar examples of Canadian innovations and technology that only gained broad success AFTER being bought by foreign companies or AFTER the inventors went to the US or overseas to more receptive markets. Whether in software, hardware, biotech, or other areas, the story repeats itself into the present.

Finding solutions

So what can be done to start changing this truly sad state of affairs? Here are few suggestions. They are not comprehensive, nor fully fleshed out, but to me these are important steps that must be taken.

  1. Fully utilize the skills and abilities of the Canadian workforce
  2. Fix the financing issues for entrepreneurs
  3. Match technologists with experienced Product Management and Marketing  resources early on
  4. Create a national culture that celebrates innovation
  5. Resource industries can no longer be the primary focus of Canada’s international trade strategy

I’d certainly love to hear what you have to say. Whether you live in Canada or not, it doesn’t matter. No country is immune to this problem, though certainly some countries have far more focus on it than others.

1. Fully utilize the skills and abilities of the Canadian workforce

This is a message for employers. Canada has an educated, driven and skilled workforce capable of making great contributions in the workplace — if given the opportunity.

A recent article in the Globe and Mail entitled, Returning Canadians Chilled by Workforce, looks at the experiences of people with overseas experience coming back to Canada. The following quote from the article talks about Roy Pereira’s experience after returning to Canada from Silicon Valley.

Instead of his experience translating into a valuable asset for Canadian companies, he discovered it was much more difficult than he expected to find a job that allowed him to use his skills and knowledge.

I totally agree and experienced the same thing. When I was looking to move back to Canada from California,  most interviewers focused on the Canada/US exchange rate and salary differences in the two locations. They didn’t care about my skill set, my contacts, my experience etc.

This narrow minded thinking impacts everyone, new immigrants as well as returning expatriates. There needs to be a cultural change made by employers. We are competing in a global economy and international experience and contacts are invaluable in that regard.

People are truly the most important assets knowledge-based companies have, and employers and managers MUST learn how to use those skills to their advantage instead of trying to force fit people into narrow definitions that do little, if anything, to truly benefit from the skills people have available.

2. Fix the financing issues for entrepreneurs

This topic could fill several blog posts alone, so I’m going to focus on one very specific point.

Canada’s venture capital community is a mess. Don’t believe me, then read the articles in this series entitled The Future of Venture Capital in Canada.

When I say, fix the financing issues, the reality is that there needs to be a better, more symbiotic model that can help both the entrepreneurs and the financiers become successful.

Most tech companies in Canada don’t need millions of dollars in series A and B financing. What they need most is targeted assistance very early on. As Rick Segal says:

… we have to learn how to fail faster.When it comes to software, you can build, test, rework, and test again for under $100,000. We need a structure in place that allows that kind of money to be thrown at something to see if it works, and if it doesn’t, kill it and try something different.

He’s basically talking about dollar amounts that are traditionally supplied by Angel funds. A healthy and efficient Angel funding network would do wonders to help small entrepreneurs get over that initial hump and get some market validation.

Or perhaps something more like YCombinator is needed in Canada.  Either way, small amounts of well targeted early stage funding will have a huge impact on moving small companies forward to the next stage in their evolution. There is a lot of room for improvement in this area.

3. Match technologists with experienced Product Management and Marketing  resources early on

OK, this may sound completely self-serving but it isn’t. It’s absolutely true and absolutely critical.  And it goes to the heart of what the Conference Board of Canada identified as the biggest weakness we face in innovation. i.e. taking good ideas and turning them into successful products.

The early stage funding model as described above is about being lean.  Given that, there is little margin for unnecessary mistakes. So, while it may be good to fail fast, failing fast for the wrong reasons is stupid. And even worse is working on something that is bound to fail and not knowing it for far too long.

This is where focused Product Management will add significant value for early stage companies, because success is not simply about the technology or the product that is built. It’s about being lean and efficient, ruthlessly efficient in all the steps needed to bring the product to market and make it successful.

Everything from identifying the right market problems to solve, finding valuable market segments, positioning products against competition, defining pricing models and launching products are critical to success. In short Product Management will help the technologists focus on the right problems and the optimal outcomes. These are not skills that are widely available in Canada, let alone in the high tech industry in general. But they do exist and need to be utilized.

Look back to my post on Bill Campbell of Intuit and you can see that Silicon Valley has the same issues.

Only with the combination of technical skills, necessary funding AND market knowledge can success rates for entrepreneurs improve.

4. Create a national culture that celebrates innovation

Canada has many examples of innovators in it’s history. The telephone, electron microscope, the zipper(!), insulin and newsprint were all invented by Canadians. But, with the exception of Bell’s telephone, very little of this history is taught to Canadians in school. We have a society that is frightfully ignorant of it’s own history and accomplishments.

Not only do we need to teach our children and students about Canada’s history of innovation, but we also need to change the culture to celebrate and focus on innovation today.

How can we do this? Use the Participation model, but apply it to Innovation!

Participaction, started in the early 1970s, was (and still is) a national initiative to get Canadians to be more physically active. It included TV, Radio and print advertising. It included corporate sponsored runs and other activities. There were Participation challenges in various cities across Canada.  It got the country moving again and is credited with creating a bit of a fitness craze in the 1980s in Canada.

We need an analogous program to get Canadians aware of our history of innovation, and both the value and potential that it can bring to this country. Like Participaction, the program must be multi-faceted and continuous over a period of many years. Education, events and initiatives to bring people with ideas, money and market savvy together would help accelerate the efforts of entrepreneurs across the country.

A coordinated Participaction-like program could help reshape the innovation landscape in Canada over the next 10 years.

5. Resource industries can no longer be the primary focus of Canada’s international trade strategy

I’ve left this one to last because it may be the most contentious and least likely to happen in the short term.

Canada is a resource rich country. There’s no denying that. But for far too long resources like oil, gas, lumber, coal, potash, nickel, gold have dominated both the economy and the political mind. But we need to change that. Resources will play a prominent role in the Canadian economy for decades to come, but software, green-tech, biotech, life sciences and other knowledge based industries must grow in size and economic influence in Canada.

Our political leaders are far too focused on short term economic incentives and promoting low value jobs in the resource sector. They do this because it is easy to do and has short term political benefits. It also supports the current power structures in this country, as they have significant interests in resource industries.

The resource sector can’t be ignored, but focusing on it cannot be done to the detriment of high-tech, biotech and other industries where Canada can make significant gains.

Alberta was “king of the world” 2 years ago, sitting atop hundreds of BILLIONS, if not TRILLIONS of dollars of oil in the tar sands. Today, with the world economy depressed and both the demand for and price of crude oil well below peak levels, things don’t look so bright there. Yes, demand for oil will pick up, but other factors including alternative fuels and ecological awareness of the impact of excavating the tar sands are working against Alberta.

Why not learn a lesson from this and invest in a more diversified economy while there is still time? We need policies that look to the next decade and the next generation, not simply to the next budget or the next election campaign.

Canada needs a diversified, technologically efficient economy that can utilize the intelligence, knowledge and drive of it’s population.  There is little debate on that point.

The key questions are how best and how soon it can be done.  I’ve outlined a few suggestions here. I’d love to hear from the rest of you on this topic, whether you live in Canada or elsewhere, because I’m sure Canada is not unique in this regard.

Saeed

P.S. Here’s a great Canada focused blog that covers this topic as well as many others related to the future prosperity of Canada. It is both thoughtful and insightful. I highly recommend it.

http://dontleavecanadabehind.wordpress.com/

WWANPD (What would a normal person do?)

I was walking with my friend Michael last week in the Oakland hills, and he came out with the most hilarious question: What would a normal person do?

Product managers often gripe:

  • My boss says I should be more strategic, yet I am assigned only tactical projects
  • We say we want to be market driven, but I’m not allowed to call a customer without the sales person on the line
  • We ask “why did we lose this account”, but no product managers are allowed to interview the buyer
  • They say I’m essential to the company, but I never get a raise, and I never get promoted

Ask yourself: In this situation, what would a normal person do?

Or meme it: WWANPD?

– Alan