This isn't rocket science, but it does represent a kind of discipline. And it is here that high-tech management shows itself most lacking. Most high-tech leaders, when it comes down to making marketing choices, will continue to shy away from making niche commitments, regardless. Like marriage-averse bachelors, they may nod in all the right places and say all the right things, but they will not show up when the wedding bells chime. Why not?First, let us understand that this is a failure of will, not of understanding. The following example makes the things clearer and what the mistakes to avoid during marketing in high tech products in startups.
In the first year of selling a product—most of it alpha and beta release—the emerging high-tech company expands its customer list to include some technology enthusiast innovators and one or two visionary early adopters. Everyone is pleased, and at the first annual Christmas party, held on the company premises, plastic glasses and potluck canapés are held high.
In the second year—the first year of true product—the company wins over several more visionary early adopters, including a handful of truly major deals. Revenue meets plan, and everyone is convinced it is time to ramp up—especially the venture capitalists who note that next year's plan calls for a 300 percent increase in revenue. (What could justify such a number? The technology adoption profile, of course! For are we not just at that point in the profile where the slope is increasing at its fastest point? We don't want to lose market share at this critical juncture to some competitor. Strike while the iron is hot!) This year the company Christmas party is held at a fine hotel, the glasses are crystal, the wine vintage, and the theme, a la Dickens, is "Great Expectations."
At the beginning of the third year, a major sales force expansion is undertaken, impressive sales collateral and advertising are underwritten, district offices are opened, and customer support is strengthened. Halfway through the year, however, sales revenues are disappointing. A few more companies have come on board, but only after a prolonged sales struggle and significant compromise on price. The numbers of sales overall is far fewer than expected, and growth in expenses is vastly outdistancing growth in income. In the meantime, R&D is badly bogged down with several special projects committed to in the early contracts with the original customers.
Meetings are held. The salespeople complain that there are great holes in the product line and that what is available today is overpriced, full of bugs, and not what the customer wants. The engineers claim they have met spec and schedule for every major release, at which point the customer support staff merely groan. Executive managers lament that the sales force doesn't call high enough in the prospect organization, lacks the ability to communicate the vision, and simply isn't aggressive enough. Nothing is resolved, and, off line, political enclaves begin to form.
Third quarter revenues results are in—and they are absolutely dismal. It is time to whip the slaves. The board and the venture capitalist start in on the founders and the president, who in turn put the screws to the vice president of sales, who passes it on to the troops in the trenches. Turnover follows. The vice-president of marketing is fired. It's time to bring in "real management." More financing is required, with horrendous dilution for the initial cadre of investors—especially the founders and the key technical staff. One or more founders object but are shunted aside. Six months pass. Real management doesn't do any better. Key defections occur. Time to bring in consultants. More turnover. What we really need now, investors decide, is a turnaround artist. Layoffs followed by more turnover. And so it goes. When the screen fades to the credits, yet another venture rides off to join the twilight companies of Silicon Valley—enterprises on life support, not truly alive and yet, due in part to the vagaries of venture capital accounting, unable to choose death with dignity.
… What the company staff interpreted as a ramp in sales leading smoothly "up the curve" was in fact an initial blip—what we will be calling early market—and not the first indications of an emerging mainstream market. The company failed because its managers were unable to recognize that there is something fundamentally different between a sale to an early adopter and a sale to the early majority, even when the company name on the check reads the same.
Wednesday, May 14, 2008
Thursday, April 17, 2008
Creating Successful Products- The Rock n Roll way
"I can explain everything better through music. You hypnotize people to where they go right back to their natural state and when you get people at their weakest point, you can preach into their subconscious what we want to say." —JIMI HENDRIX
Last year I had the opportunity to visit an Iron Maiden gig at Bangalore. So interested was I that I flew all the way down from Calcutta to witness the historic gig in India. I was spelled bound by the amount of fan following this classic band have even in India. The crowd was mad, banging, and screamed at each pitch of the band. I thought if the same sort of "fan following" is possible in business ventures for creating successful brands and products. It was more interesting for me as the start-up I work for, iViZ, is on the way of creating path breaking technology of doing security assessment. Until recently I read a write-up by Roger Blackwell about the rock and industry which ignited the thought of correlating the successes of rock n roll industry with successful brand and products.
Think of what happens when U2, the Rolling Stones, Janet Jackson, or Pink Floyd enters the stage in front of a crowd of 50,000. People scream as a band member walks toward their side of the arena, they cheer at the opening riffs of their favorite tunes, they belt out the words to most of the songs, and they dance, jump, and rock for hours. The power of music is undeniable; the loyalty showered upon those who create it, unmatched; and the lessons for corporate business leaders, boundless. It is difficult to think of any product or industry that evokes more emotional intensity from its followers than rock and roll. Their attitudes and behavior shatter the traditional measures of customer loyalty in terms of reach, quantity, and degree to define outright fanaticism—the ultimate level of devotion a firm can hope to receive from its customers. What is it about music and rock stars that transform people's emotions, behavior, and lives? Enlightened marketers have asked the question, but few have ever bothered to look for the answers. Yet corporate executives sit day after day scratching their heads, looking for insight as to how their brands might inspire even a fraction of such emotional response, loyalty, and commitment. They benchmark the success of others; analyze what promotional and design strategies have worked in the past; and review their advertising and promotional campaigns. And while marketers have been proficient in analyzing how to create successful brands and satisfy customers, most of their strategies mirror those that other businesses have already implemented.
Ok so without emphasizing more on the impact of music, let me try to put forward some phenomenon which we, as business leaders, can adopt and create breakaway brands and products. I attribute some of my views to Roger Blackwell and Tina Stephan to the marvelous work they have done in accumulation of the traits of some of the most successful rock bands in history so far.
Practice reverse customer intimacy. While most of the "wannabe successful" business is focused on CRM programs that help companies understand their customers better, many rock bands find ways to let fans get to know them more intimately. The better fans know a band through special information and personal experiences, the more likely they are to maintain a relationship with it. Aerosmith allows customers to get to know the band more intimately with remote staging and backstage tour packages, helping fans feel that they have a special relationship to the band. When the affective (emotional) components of attitudes toward a brand are firmly anchored in the cognitive (knowledge) components of an attitude, they are highly resistant to change or competitive encroachment.
Keep angel fans engaged. Angel fans discover bands before they become stars, investing time, money and emotion in the success of the band. They take pride in the ultimate success of the band and are rewarded with bragging rights for picking a winning brand. John Mayer, 2003 Grammy winner, tells his angel fans to take tape recorders to his concerts and tape his music, which keeps them engaged in the concert experience and helps them create memories. This actually increases the likelihood that fans will buy the CD, because they will want a good-quality version of what they heard live. Harnessing the support of angel fans is key to the adoption of new products ranging from Google to iPhone.
Involve customers in the brand experience. There is a magical moment in Billy Joel and Elton John's Face to Face concert in which the stars stop singing and let the audience take over. Thousands of people sing the lyrics to "Piano Man" in one collective voice—it is total fan involvement in the John and Joel brands. Similarly, Harley-Davidson fans experience total brand involvement when they tour on their hogs and congregate for weekends with other enthusiasts. Though the company organizes the experiences, it mostly enjoys the ride that goes hand-inhand with owning a brand that becomes a lifestyle.
Develop information and emotional exchanges with customers. Brands and customers should exchange information beyond normal and typical flow like manuals, brochures etc. Brands and fans should go one step further and exchange emotions, from feelings of nostalgia to outright elation, that fans receive from the brand, relay back to it, and convey to others. Web sites, blogs are becoming increasingly important in this area. Whether it's Amazon.com or Madonna.com, fans are more likely to become and remain engaged with a brand when they can communicate with it.
Deliver on Fans' Expectations When fans attend a Rolling Stones or Eagles concert, they expect to hear a string of hits they can sing along with, performed with topnotch sound quality and delivered with high energy. Firms must ask themselves, "Do our products really deliver the attributes customers consider most important?"
Evolve but remain true to your core sound or strength. Bands that stray too far from their core sound often alienate the fans they took so long to acquire. Aerosmith's remake of "Walk This Way" spurred a brand reinvention with the perfect balance of familiarity and newness. Evolution is required if a brand is to stay relevant in the culture, but radical changes in look, feel, brand promise or personality may make the brand so different from what fans expect that it breaks the emotional ties between fan and brand.
Fan retention depends on brand relevance. Famed songwriter and performer Bob Dylan had always played folk music at the acoustic level, but as the Byrds, the Rolling Stones, and the Beatles changed the landscape of music, he ran the risk of being evolved right out of the market. Subsequently, he took folk music electric and contemporized himself. The songs were the same, the words were the same, but the delivery was altered and the relevance enhanced. Fans stuck with Dylan because he evolved to reflect changes that fans seemed to follow among other musicians.
Next time the Rolling Stones, KISS, Elton John, Aerosmith, Madonna, Neil Diamond, Iron Maiden or any other legendary band invades your town, go to the concert. Experience firsthand the emotions you and the thousands of people around you feel, and think about how to capture some of that in your brand, whether that brand is a product or yourself. These bands prove that forging emotional connections with fans and fortifying them over time leads to long-term revenue streams. That requires getting under their skin, into their souls, and connecting to something even fans have a difficult time describing. But they feel it; they know it's there. It's what happens when girlfriends get together and dance around to "Holiday" by Madonna. Or when guys get together and play air guitar to AC/DC's "You Shook Me All Night Long." The emotions are different, the intensity the same. The combination of emotion and intensity creates within people a devotion to the music they love and the bands that create it. It's what keeps classic rockers performing night after night, city after city. It's what keeps people buying new releases of old favorites. It's what brings audiences to their feet, screaming for another encore when the band has already played three.
It's what turns customers into fans.
Wednesday, February 06, 2008
Monday, February 04, 2008
The world is flat
A Brief History of the Twenty-First Century is a national bestseller book by Thomas L. Friedman, analyzing the progress of globalization with an emphasis on the early 21st century. The title is a metaphor for viewing the world as flat or level in terms of commerce and competition, as in a level playing field —or one where all competitors have an equal opportunity. As the first edition cover indicates, the titles also alludes to the historic shifts in perception once people realised the world was not flat, but round and how a similar shift in perception —albeit figurative— is required if countries, companies and individuals want to remain competitive in a global market where historical, regional and geographical divisions are becoming increasingly irrelevant.Here is a brief presentation on it.
Web2.0 application security
SOA, RIA, and Ajax are the backbone behind the now widerspread Web 2.0 applications such as MySpace, GoogleMaps, and Wikipedia. Although these robust tools make next generation web applications possible, they also add new security concerns to the field of web application security. Yamanner, Samy and Spaceflash type worms are exploiting “client-side” Ajax frameworks, providing new avenues of attack and compromising confidential information. Portals like Google, NetFlix, Yahoo and MySpace have witnessed new vulnerabilities in the past. These vulnerabilities can be leveraged by attackers to perform Phishing, Cross-site Scripting (XSS) and Cross-Site Request Forgery (XSRF) exploitation.
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