Do not Confuse Innovation with Technology Harvesting

Posted on March 16, 2011 by bmottram

Innovation is an interesting process but do not confuse true product innovation with strategies that are designed to harvest more return out of already sunken investment dollars. Harvesting is a common practice with the specific goal of increasing the productive life of an aging technology. Don’t get me wrong, product mid life kickers are a legitimate phase in any product life cycle but they can also be a band-aid that attempts to cover unwelcome baggage associated with the shortcomings of the older, underlying technology.

Having been involved in product development for many years I have witnessed the costly myopic thought processes that tends to guide solution development to meet today’s near term problems without giving appropriate consideration to enabling the flexibility necessary to meet the yet unrecognized challenges of tomorrow.

These rear view mirror perspectives are how I describe the notion of product development as  “Running backwards into the future”

Established vendors have a legacy, they have revenue generating product lines that they protect by a continuous upgrade process.

This is may be great for the vendor as they stimulate their revenue streams with a flow of upgrade sales, but what about the turmoil created in the end users world. NO! just in case you thinking about it we do not yet have non disruptive upgrades. At least in the physical world but virtualization is changing that reality. So this creates a business challenge when looking to introduce new technologies. This desire to protect existing investments and revenue streams drives the propensity of the market place incumbents to compromise and adapt solution development to fit existing technology.

An interesting evolution obvious in some recent product introductions has been the use of standard commodity components. The motivation being the belief that technological evolution can be exploited more rapidly and that solutions based on these components can evolve at a pace that tends to be significantly faster than systems based on custom silicon. Exploiting the use of high volume commodity components that enjoy the benefits of the cost containing commodity curve, not only helps to keep cost lower but avoids the heavy investment commitment associated with custom silicon.

Developing dedicated silicon has advantages and no doubt will continue in many high-end solutions but the inertia and cost associated with the development of custom silicon found in proprietary solutions mean that they do not adapt or evolve as quickly as those based on standard and commodity components

There is a compelling argument in favor of exploiting commodity components in terms of cost and speed of implementing technology refresh and I predict will become more the rule than the exception.

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Is fossilized marketing thinking impacting your business?

Posted on January 1, 2011 by bmottram

I recently stumbled upon an article that used an interesting history lesson to highlight the danger of institutional inertia in the protection of the status quo and it was a lesson that delivered a very relevant message for today’s thinking marketing manager.

The US standard railroad gauge (distance between the rails) is 4 feet, 8.5 inches. That’s an exceedingly odd number but that’s the way they built them in England, and English expatriates built the US railroads. So why did the English build them like that? Because the first rail lines were built by the same people who built the pre-railroad tramways, and that’s the gauge they used. Why? Because the people who built the tramways used the same jigs and tools that they used for building wagons, which used that wheel spacing. Why did the wagons have that particular odd wheel spacing? Well, if they tried to use any other spacing, the wagon wheels would break on some of the old, long distance roads in England, because that’s the spacing of the wheel ruts. So who built those old rutted roads? Imperial Rome built the first long distance roads in England for their legions and the roads have been used ever since. And what about the ruts in the roads? Roman war chariots formed the initial ruts, which everyone else had to match for fear of destroying their wagon wheels. Since the chariots were all made for Imperial Rome the wheel spacing was consistent with the spacing between the ruts determined by the width of the rear end of two war horses!

Therefore the United States standard railroad gauge of 4 feet, 8.5 inches is derived from the original specifications of an ancient roman war chariot.

Now fast forward to today and the Space Shuttle. When you see a Space Shuttle sitting on its launch pad, there are two big booster rockets attached to the sides of the main fuel tank. These are solid rocket boosters (SRB’s). The SRB’s are made by Thiokol at their factory in Utah . The engineers who designed the SRB’s would have preferred to make them a bit fatter, but the SRB’s had to be shipped by train from the factory to the launch site. The railroad line from the factory happens to run through a tunnel in the mountains, and the SRB’s had to fit through that tunnel. The tunnel is slightly wider than the railroad track, and the railroad track, as you now know, is about as wide as two horses’ behinds. So, a major Space Shuttle design feature of what is arguably the world’s most advanced transportation system was determined over two thousand years ago by the width of the back end of a horse.

So are there any fossilized processes influencing your marketing thinking? While they may not have evolved because of an anatomical feature of a horse there continuance could however inspire a similar comparison.

Perhaps it is time to take that step back and audit your marketing, business (or personal) practices and get rid of any inefficient and fossilized process or practices.

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Winning your unfair share of the IT budget.

Posted on December 13, 2010 by bmottram

I know that a couple of little green shoots do not a forest make but being the ever optimist I look to the (admittedly cautious) positive outlook expressed recently by IDC and Gartner echoed by some of the industry luminaries in such companies as EMC, HP, Oracle etc as cause for at least moderate optimism.

With that being said IT budgets over the next few years will remain tight but data keeps being created and storage requirements still keep growing with current estimates placing the CAGR at 40 to 50% PA at least for the next couple of years.

So with budgets being tight and the need to store data continuing to grow the question for data storage marketers is how do I get my unfair share of these shrinking budget dollars.

Borrowing a theme from one of my favorite books “Hope is not a Strategy”[1], (thank you Rick Page). I am continually surprised at just how often “hope” influences marketing strategy with the expectation that this approach will bring them the success their investments deserve and their shareholders expect.

A number of years ago there was another text that gave me some valuable insight into why many products perform like damp fireworks despite the marketing hype and executive promises. The book, “Developing Products in Half the Time”[2] spends much of its real estate talking about the “fuzzy front end” process of product development which if not managed will delay product development, aka time to market, and distort the original product concept.

This I have experienced first hand in a number of companies as I watched scope creep warp the original idea and create a feature bloated product that delayed time to market, increased cost and confused the identification of the solutions sweet spot. Check out my recent blog “Why Technology Products Fail” for a deeper discussion on the topic.

So back to hope. What should be top of mind for vendors who thoughtfully plan their product launches with the checks and balances that will allow them to implement mid course corrections as dictated by unexpected and often unpredictable market dynamics?

Deliver solutions that resonate with the issues that are at the top of the target prospects prioritized issue list. All too often vendors have not invested the time to understand the prospects priorities and hence are solving legitimate but low priority problems. Unless the solution solves the prospects number 1 issue you are chasing the left over budget dollars. To understand a prospects prioritized list of pain points, ask.

If your solution does not resonate quickly with your target prospects you are either not selling into your sweet spot or your prospect base perceives only marginal value in your solution. Revisit your segmentation, the product value proposition or both.

Understand your prospect but more importantly understand who are your high value prospects. These are the folks where most of you selling investment should be made.

Clarity of message; craft your message(s) in terms that are meaningful to the prospect. The executive, finance, operations and technologists all have different interests and hot buttons. Find each, engage them with a selling message that is crafted to be meaningful to each function. Only one may have the yes vote but several will have a no vote.

Deliver a complete solution. Many vendors fail because they do not look at the value of their solution through the eyes of the prospect. Installation, support, usability, financial advantages, product and technology life-cycle, application ecosystem, vendor reputation and capabilities etc are all topics that need to be covered in a holistic solution presentation. Failure to do so can leave unanswered objections that will block a sale.

The selling process is not just the responsibility of the sales team, despite what they may think. Follow-up and follow-through; marketing creates the opportunity, sales converts these opportunities to revenue and support cements the relationship; manage these often dysfunctional and potentially sales destroying hand-offs.
Much vendor/prospect friction can be eliminated by matching the selling process with the prospects buying process.

[1] Hope is not a Strategy, Rick Page, McGraw-Hill
[2] Developing Products in Half the Time, Preston Smith & Donald Reinerstsen, John Wiley & Sons

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Green IT Alive and Well!

Posted on November 30, 2010 by bmottram

A recent survey of 1200 technology and business managers by Ziff Davis Enterprise Research (Dec, 2009) for the Baseline Magazine suggests that green initiatives, energy efficiency or reduction in hazardous/toxic materials are far from being on the back burner. Their findings suggest that of those interviewed:
1. 37.6% have a greatly increased commitment.
2. 54.5% have an increased commitment
3. 5.8% have the same level of commitment
4. 2.1% have a reduced commitment
This would suggest that despite the state of the economy the Green IT movement is alive and well.

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10 Reasons Why Emerging Technology Companies Fail.

Posted on November 30, 2010 by bmottram

During my years as a marketing practitioner in large and small companies I have witness and participated in an interesting diversity of executive philosophies and behaviors that have dictated the success or otherwise of a an emerging venture. Over the past few months I have been thinking about these experiences, and lessons learned, in the context of a start-up enterprise with interesting and innovative technology but one that fails to realize its market potential. A summary of my thoughts follows and I welcome all comments, thoughts, additions and suggestions.

1. Myopic or extraneous market research:
Many start-ups get there beginnings from inspired founders who identify a need and identify a solution. However the business viability of these ideas need to be validated through basic market research both qualitative and quantitative. However care should be exercised in developing the underlying research assumptions to avoid any bias, unintentional or otherwise, which could influence the data and predetermine the outcome. Market research data generally forms the bases of a business and marketing plan and inaccurate data, incomplete data, manipulated data or data ignored in favor of an executive’s life experience can seriously damage the prognosis for success.

2. Product development guided by internal perceptions and biases.
To often development efforts are divorced from the realities of the end user world which can lead to products that do not solve a real customer issue resulting in a solution looking for a problem. See note 2 above. Users do not buy technology they buy a solution that solve a particular pain, increases their profitability or enhance their competitiveness. Note; the greater the pain being eliminated the greater the chance of a potential user spending valuable budget dollars.

3. Over optimistic marketing plan:
Nothing wrong with being optimistic about your marketing plan. To be honest if you are not enthusiastic and optimistic about the plan, you have the wrong plan; if your team is not enthusiastic then your execution will fail. However being overly optimism can mean unrealistic forecasts and blind you to realities that will doom the venture.

4. Incomplete product:
The overall customer experience is a measure of the value of a product from a user’s perspective and is quite different from the perspectives developed by vendors. Emerging companies tend to be led by technologists who consider that feature function or unique technology as the primary drivers of a successful product but the user community takes a different view.
Companies should not compete on product centric attributes alone. Users consider the out of box experience that includes installation, training, financing, technical support, application support, application ecosystem and the company’s reputation. The intangible nature of some critical buying criteria underlines the importance of looking at products holistically.

5. Undifferentiated products:
Unless you can clearly articulate your differentiation you are doomed to failure or at best mediocrity. Beware however what you consider to be a winning differentiator as it may not be considered meaningful by a potential user. Differentiation can take many forms as the definition of a complete product would suggest and avoid the common mistake that technology or price are the only elements that can drive meaningful differentiation.

6. Weak or confused market focus:
The fear held by many executives is that business might be lost, any business, and that fear blocks meaningful market segmentation. This lack of market focus creates a behavior that encourages the chasing of every bright new sales opportunity whether profitable or not and whether it is in the companies sweet spot or not. That behavior leads to an over extension of limited resources, an increase in selling costs, increase in support costs, increased competition and a negative impact on the bottom line. Simply chasing revenue can be a false and costly strategy.

7. Vague messaging and poor positioning:
Vendors who are unable to clearly and crisply articulate the end user value of their solution in user identifiable terminology or are unable to effectively position their product against competitive offerings will struggle to get end user mind share. Consumers are continually bombarded by marketing messages all seeking to attract attention and create opportunities to access an end users budget dollars. Time spent developing messaging that resonates and builds brand equity is time and money well spent.

8. Channel confusion:
Selecting the correct distribution channel is critical with many ventures failing because their channel strategy is confused and mismanaged. Whether the correct channel choice is direct, indirect or a combination, ambiguities must to be eliminated and knowledgeable channel management in place to avoid the channel conflicts that lead to channel ineffectiveness.

9. Executive thinking that promotion is marketing:
To often CEO’s, VC and most certainly Chief Sales Officers look at the marketing function as having only one task – demand generation. Yes that is an important deliverable of marketing but not the only one. Such myopic perspectives are short sighted and damage the long term prospect of the company.

10. Marketing and sales teams disconnected:
Despite what should be a synergistic functional relationship between marketing and sales, too many times do these teams take adversarial positions. Too often do these two critical functions have priorities and objectives that do not align, but with each believing that they are the ones aligned with the corporate objectives. This disconnect creates negative internal competition that is detrimental to developing a high performing and successful enterprise. I have also noted that there is a relationship between the degree of discord and the functional heritage or preference of the chief executive. Personally this is a particular frustration having witnessed functional ego’s destroy better than average opportunities.
Between the marketing and sales functions there are a number of opportunities for collaboration. These include identifying segmentation and the identification of target customers, development of go-to-market strategies, channel strategies, lead generation and qualification, sales tools and training. Effective coordination between marketing and sales will improve sales efficiency.
 
Any and all polite feedback welcome.

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