The Two Quotes

Quote #1

“The business and marketing functions of a startup should be considered as important as engineering and development, so they deserve an equally rigorous methodology to guide them”

Steve Blank(1)

Quote #2

“So why so many organizations hire expensive and highly qualified engineers for developing software and then invest in a few-hours, general marketing courses for their marketing/business people?”

Donato Mangialardo (2)

(1) Blank has spent over thirty years within the high technology industry. He has founded or worked within eight startup companies, four of which have gone public. Blank is recognized for developing the Customer Development methodology, which launched the Lean Startup movement. Blank teaches and writes about Customer Development and is a consulting associate professor of entrepreneurship at Stanford.He currently lectures at the Haas School of Business, University of California Berkeley, Columbia University and the California Institute of Technology (Caltech). @sgblank

(2) Donato Mangialardo is an unknown follower of Steve Blank. He helps  organizations to define, validate, build and market products for sustainable commercial success.  He has spent 10 years of his career in Silicon Valley where he learned how to learn. With focus on Product Marketing/Management. He is still learning a lot. He believes that there is nothing like “seeing the light in your customer’s eyes”. And he does see that from time to time. @donatomm

Annunci

The end of Freemium: start with the customers, not your product

“The return to the roots of marketing — starting with customer needs, choosing the needs you want to serve and getting your fair share of the value created.” by @rags

Rags Srinivasan has written a very interesting article.

Let me quote the first few paragraph:

  • “We are now seeing the end of the freemium model — signing up users for free and trying to upsell,” said Christian Vanek, CEO of the Boulder-based SurveyGizmo, in a recent phone conversation.
  • “6.5 million unique users is not all that it’s cracked up to be. I don’t want hits. I want revenue. I want a real business,” said Matt Wensing, founder and CEO of Stormpulse, in an interview with Mixergy.
  • “Make a product people want to pay for,” said Marco Arment, founder of Instapaper, in a Planet Money interview.

Three easily available examples do not make indisputable evidence against freemium. Just like Dropbox, Evernote and RememberTheMilk do not make a case for freemium. But these three quotes reflect a return to the roots of marketing — starting with customer needs, choosing the needs you want to serve and getting your fair share of the value created.
Full article at http://bit.ly/QpLKiE

 

 

 

Today’s BIG thing

It is great to see that most of the principles and the techniques I use to inspire and drive my customers’ businesses were “Just a crazy idea two years ago, but [they are ] now teached at Stanford, Berkeley, Columbia, Caltech, Princeton and for the National Science Foundation at the University of Michigan and Georgia” Tech” http://bit.ly/QS8551

Many, many thanks to the authors of the Next Startup Weekend http://bit.ly/QS7Ff1 for helping new businesses to suceed.  The other good news is that well established businesses can really take advantage of these principles and techniques. They match the problems I see everyday at my customers’. Even if the many things are still perceived as “crazy” in Italy today, things are changing rapidly. I do love my job.

Changing things for the Better

Despite what our leaders say [….] studies show that our organizationsd are much less productive that they once were ang going out of business faster and faster

  • Jurgen Appelo, How to change the World
  • Stephen Denning, author of “The Leader’s guide to Radical Management”

The same authors say that what was working 20 years ago no longer works today, including the way you changing things. I see two areas in today’s business where a big change is needed. Why is needed? For better results and happier workers.

1. The way we build solutions to problems (e.g. Products, Services)

  • As an example, the Agile Manifesto/Movement has made a huge impact in the world of software development in just a few years. Jurgen Appelo is changing the way managers influence their organizations.

2. The way we build and market solutions to problems  (e.g. Telling our Buyers how good our products are)

  • As an example, the “world’s most popular product management and marketing training company”, pragmaticmarketing.com and virtually every single marketing leader say that it is the market, the buyers that drive winning products, not a bunch of smart people in a meeting room, regardless of how smart they are (if you think of Steve Jobs here, that allegedly “did not do market research” remember that he knew his buyers like nobody one else including the buyers themselves)

These two areas need change. As for the first one, I recommend reading the small book mentioned above, “how to change the world”. It’s 1.5 Euros on Lulu.  It is only a starter of course. Nobody things any book can do any change. People do. Inspired and motivated people do. So this book helps you to start the right tway.

As for the second one, no secret recipe here either. It’s hard. It’s complicate. The shift from telling/pushing products  to listening to buyer’s problems, adapting to their purchase habits, and modeling a complex reality with a few but very helpful models and methodologies (along the lines of the market-driven approach, the Buyer Personas profiling) is a hard and complex task.

Of course they are complex. It is the way you deal with complexity that makes a difference!

See http://www.slideshare.net/jurgenappelo/complexity-thinking

If you don’t aknowledge complexity (and the ways to deal with it) and  use shortcuts instead (such as solely listening to what your salespeople or vocal customers say) then the risk of failures increases. It is under your control really. Why shouldn’t you build a repeatable way to do business that brings the results you want? Stop for a moment and think about it.

 

Related articles:

Vision, Strategy and Bad Strategy: 5 tips

Too many organizational leaders say they have a strategy when they do not. Instead, they espouse what I call “bad strategy.” Bad strategy ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests. Like a quarterback whose only advice to his teammates is “let’s win,” bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values. Each of these elements is, of course, an important part of human life. But, by themselves, they are not substitutes for the hard work of strategy.

Richard Rumel, McKinsey Quarterly, The perils of bad strategy

Common Dilemmas around Vision and Strategy

Carla the CEO says: “I know I need a vision but I can’t seem to understand what a vision actually is.”

“I have read a lot of terms like mission, purpose, values, strategic intent, but no one has never given me a satisfactory, clear explanation of what a vision is and what actionable directions it gives me” adds Josh the VP od Sales

On the other hand, Gina, the marketing communication specialist, knows very well what her company vision is. “It’s on my cubicle wall. But how does it actually guide my work?” she says puzzled.

The very assertive Frank the CEO complains: “I do have a Great Vision, but they don’t get it. I’ve given them a memo with all the details. What’s wrong with them?”

Alvin, the sales engineer who travels all week-long, goes: “What? Vision? Again with that BS? You had another of those fancy marketing books for breakfast this morning, didn’t you?  Leave me alone, please. I’ve got work to do, at least I do!”

Vision and Strategy at work

What is a “vision” then?

It is a destination. A desirable business end-state for an organization. It’s about knowing where you want to go. And, where you don’t want to go.

It’s NOT what you want to “do”.

It’s not the “how

It’s the “where

And,  what’s a Strategy then?

It’s the path to get to that destination. How you will get there.

In other words:

  • Strategy: Sounds great! But… to go where? …“I have a map but I don’t know where to go”
  • Vision: We have one! But… how do we get there?   …”I know my destination, now I need a map!”

“If a company does not have a vision of where it wants to go, then any product strategy is likely to take it somewhere. But will they be happy with somewhere when it gets there?”

Michael McGrath

“I can always plan to operate in full market-driven mode, tuning my offering for an army of buyers that want my product or service, using the latest social media and content marketing strategies. But, how can I do that without a Company Vision and a Strategy that oversees the business and guides me there?”

Donato Mangialardo, Director of Product Strategy

5 Tips – Using Vision and Strategy for guiding everything you do

Tip#1 – You need to have both. They need to be fully aligned to provide guidance and focus. As a Top Manager, you want to make sure they are always, consistently aligned.

Tip#2 – The Vision must be extremely clear. It needs to provide focus. What is in scope, what is NOT. What is success like. Ambiguity brings individual interpretations.

Tip#3 – Strategy means what do we intend to do in order to achieve the goals expressed by the Vision. What should we NOT do.  Again, conciseness  and clarity are  a must. Everybody needs to remember it and apply it.

Tip #4 – Establish a Strategy by looking at your distinctive competences, but also acknowledge the challenges your organization faces, including inconvenient truths. Provide an approach to overcoming them.

Tip #5 – Put together Vision, Strategy and Why your organization believes it can be successful in a coherent, 3-sections statement that fits in a page.  It is a difficult exercise, but it works like a charm if well done.

(I see these more as Rules than Tips actually)

Conclusion: Align your business and your teams to understand what is and how to reach your business destination, the Vision you have set for your organization.  What’s the Strategy. This will provide focus, facilitating decisions and avoiding debates of opinions. As a byproduct, it will increase motivation and engagement in your teams.

Then, if you ask yourself …

  • “Right, but… do we have an actionable vision?”
  • “How do we get there?”
  • “Do we have a clear strategy?”
  • “Will we be able to follow that strategy?
  • “What changes will be required?”
  • “Is my company ready?”
  • “How do I know if I have set the right Vision and the right Strategy for my business?”
  • “How do I actually align them?”
  • “How do I know whether I have factored-in all the variables?”

…Then (note, this is a Self-Promoting paragraph) you want to consider investing in this  effective exercise that will direct your business to repeatable wins and eventually success.This is one of the things I like to do the most in my profession at crystal-ize.com, with a solid, proven methodology drawn from a specific experience in International, US-based and Italian companies of various business models and size.

I am sure you may have questions: please leave your comment. I will surely reply and assist your cause.

A che eventi andiamo quest’anno?

A che eventi di settore partecipiamo quest’anno?

Con quale budget?

Dobbiamo essere allo SMAU – per forza!

Cosa? Dovremmo rinunciare a questo evento dove siamo sempre andati e fare le newsletters? Ma sei pazzo!

Non mi interessano i clienti che gia’ abbiamo. Mi interessano solo i nuovi. E in questo evento non ce ne sono!!

Il mio tradeshow e’ molto piu’ importante di questo tuo evento sui clienti.

Nello stand ci deve essere questo, non quest’altro.

“C’era un sacco di gente!!”. “Si ma erano tutti studenti o fissatoni di tecnologia. Mica parliamo con loro nelle trattative!”

Vi sembrano situazioni familiari?

Scommetto di si. Scommetto che spesso discutiamo su quale evento puntare o meno, allochiamo budgets, ma poi non sappiamo esattamente cosa ritorna dell’investimento fatto, non sappiamo programmare con logica di business con risultati misurabili.

Come faccio?

E’ piu’ semplice di quello che sembra. Dipende tutto dagli obiettivi aziendali. Che in genere si possono ridurre a 3

(1) Crescita, Aumento del fatturato, profittevole

(2) Mantenere clienti e fare upsell

(3) Awareness

Se la priorita’ e’ sul Fatturato bisogna scegliere gli eventi (o le attivita’ di marketing in generale) che sono collegati all’aumentare il fatturato direttamente. Cioe’, in ambito eventi, ad esempio i leads e la loro qualita’. Che vanno misurati. Se lo abbiamo gia’ fatto (intendo la misurazione) sappiamo a quali eventi andare per tale scopo.

Se invece e’ piu’ prioritario mantenere clienti e fare upsell, allora tutti i customer events (dove ci sono clienti, pochissimi leads e poca opportunita’ di aumentare l’awareness) hanno senso, ma questi eventi sono molto diversi dagli altri. Per cui e’ possibile pianificare con una certa granularita’ le attivita’ di interesse e gli eventi di interesse, senza lasciar decidere all’emotivita’ o alle abitudini (“ma ci siamo sempre andati”, “ma ci vanno tutti”, ma “non possiamo mancare” etc). Se ci si puo’ permettere di farli tutti, ok. Se si vuole prioritizzare, meglio farlo con metodo

Un ulteriore livello di dettaglio ci deve fornire gli elementi da considerare per impattare su ciascuno di essi. Ad esempio, come misuro la qualita’ dei leads? Vs. cosa? Quanto mi costa un lead? Come si convertono in trattative chiuse i leads che provengono dall’evento X? Quali sono gli elementi che devo misurare per capire se ho migliorato l’awareness dopo questo evento, o dopo un anno con 5 eventi di settore? Es. vengo citato in studi di settore, appaio a fianco di competitors su articoli indipendenti, quanti potenziali clienti conoscono quello che facciamo (via surveys), come veniamo associati agli attributi chiave che ci caratterizzano? Veniamo trovati da potenziali clienti senza avere svolto una azione corrispondente da parte nostra?

Come sono migliorato sulla “customer retention”? Quanto spende un cliente per la ns soluzione vs altre soluzioni che acquista? Che punteggio di soddisfazione ha (da surveys)? Quanto siamo migliorati in rinnovi o manutenzione?

Ma qui si va sullo specifico. Spesso basterebbe fare una tabellina con i tre obiettivi e vedere quali eventi (o attivita di marketing in generale)  possono essere misurate vs. tali obiettivi. Altrimenti si va a “sensazione”. O si obbedisce alla voce piu’ forte nella stanza.

Il marketing e’ cambiato (1 di n)

  1. Le vendite non sono piu’ LA fonte dell’informazione
  2. I clienti possono  parlare al mondo – “broadcast to the world”
  3. I potenziali clienti possono parlare  tra di loro facilmente, istantaneamente, quando lo decidono loro.
  4. L’ Informazione di prodotto e’ facilmente accessibile (chi nasconde informazioni e’ sospettoso e viene scartato)
Risultato:
I potenziali clienti  sono spesso gia’ un bel passo avanti nel ciclo di vendita prima che i venditori si accorgono che esistano
Quindi, quando interpellati, i ns buyers vogliono sentirsi dire qualcosa di interessante riguardo i loro problemi, nella loro lingua.

Non cose che sanno gia’. Non hanno tempo da perdere.

A questo proposito suggerisco la lettura di un post molto rilevante:

http://demandgeneration.typepad.com/demand-generation/2011/08/come-i-compratori-raccolgono-le-informazioni.html

 

Smettiamola di profumare il MAIALE!

In media il CMO di una tech company (Chief Marketing Officer) rimane occupato per 23 mesi.  Source: Spencer Stuart

La meta’ di quella per  CEO and COO. Quindi la domanda sorge spontanea. Perche’ il lavoro da CMO e’ cosi’ a rischio?

 Perche’ un CMO non riesce a soddisfare aspettative irragionevoli, anzi, di fatto impossibili:

Il CMO non riesce a creare il bisogno per il prodotto della  sua azienda. In altre parole, quello che capita spesso a marketing managers e’ venir assunti per “profumare il maiale”. O mettergli il rossetto, che come frase idiomatica in US e’ ben piu’ potente.

Sfortunatamente, i buyers non hanno bisogno di quello che non hanno bisogno

Il product marketing viene relegato alla distribuzione semiforzata di un prodotto di cui non e’ chiaro il problema che risolve e per chi lo risolve.

Non c’e’ quantita’ di profumo che possa allontanare il “fetore”

di un prodotto tecnologico di cui nessuno ha bisogno *

Ma allora?

In altre parole, basta essere Market-Driven

facile eh? 🙂

(*) da Steve Johnson #pragmaticmarketing

Why Startups Fail

This morning I was reading a 47Hats‘ Blog post about this  book: Why Startups Fail: And How Yours Can Succeed, By David Feinleib, VC, Entrepreneur.

This post mentions a number of very good, although pretty common, points of failure and  advice for startups. It goes like:

Startups fail for many different reasons. Turn failure into success by avoiding some of the most common causes of startup failure:

  1. Failing to drive demand
  2. Building a product people don’t want
  3. A lack of passion
  4. Running out of money
  5. Scaling too fast
  6. Small markets
  7. Failing to focus

It also makes very good points like:

1. Failing to drive demand – Too often, entrepreneurs focus on what they’re going to build but not on their go-to-market strategy. Imagine that your product is already built. It’s done, and it’s ready to go. Now what? What is the tagline for the product? How are you going to market it? What’s going to drive massive adoption? …Figuring out how to drive demand for your product is just as important as figuring out what product to build. Inefficient, unleveraged distribution can kill a startup…

This is Dead On. Absolutely right.

Still so many keep falling in this trap. Incredible.

2. Build Something People Want – …Many entrepreneurs spend months or years building a product only to find out that few people want it. How does this happen?

The short answer is: it happens because making sure you have nailed down the right product for the right buyer in the right segment is harder that you think, so you haven’t dedicated time and budget for it.

Unless you have done fatal mistakes like forgetting completely about funding or picking the right people you need, the first two points are in my experience, by far the most important ones. Not only.  I would reverse their order of importance. Therefore I will start with the first one (and leave the second one for another post).

1. Build something that people want, and are willing to pay for – very often there is excitement around a new product or service or idea, you get great feedback from peers, friends, family, former colleagues, your early investors. Then the product hits the market and… there is no one willing to pay for it. “Where is everybody! They loved the idea!” . Here is the disaster. Most likely, irreversible.

Now, you just cannot take this risk. You can’t go head down with technology forgetting who your prospective buyers are, what they like/dislike, what is their attitude towards things that are relevant to for your idea. This applies for both consumer and enterprise products. You need to find something that solves a problem, satisfy a clear, painful need, does something 10-100x better than it’s done today,  or just creates desire such as the iPhone (good luck with that).  Then you build a message around the product and what it does for them. Not your technology, not you, them. Your buyers. Your users.

Mr. David Feinleib in his book’s puts a lot of emphasis in driving demand. “Figuring out how to drive demand for your product is just as important as figuring out what product to build“.

I agree. How to drive demand should in a way be part of the new product development process (I am not talking about code here) since the beginning.

Two examples by the same author:

  • Consider file sharing service Dropbox, which gives free space to existing users when they sign up others. The company now has some 50 million users.
  • Or think about social game maker Zynga, which builds games that require the participation of friends. Zynga leveraged the Facebook social graph to reach hundreds of millions of players. Marketing is no longer separate from product—it’s built right in.

Let me underline a key statement:

Marketing is no longer separate from product—it’s built right in.

Dead right! And more applicable than you think.

So what is my point? Look at the two key points above. They have one thing, one, most important thing in common. The buyer and her willingness to pay for something they want (because of a desire, because of a pressing business problem).  If you are able to capture the buyer and then  channel his  voice in clear, precise, compelling, persuasive and “enchanting” manner, both the product and the demand can be derived and/or enriched by the most powerful asset you may have in this business.

An intimate knowledge of the buyer.

Getting to know your buyer or your primary user is not easy. There are techniques and skills involved. The best technique by far, that joins effectiveness with low investment is “crystallizing your buyer and user personas”. I have seen this methodology changing completely the game, getting products to success, getting motivated, excited (enchanted, using Seth’s Godin’s words) marketing people, managers and sales people.

Here is some food for thought

  • Good news: it works great, always.
  • Bad news: it’s not easy. Requires live interviews, skills, competence.
  • Requires a “get out the office and go meet your buyers” kind of attitude
  • What is the business problem that we aim to solve? (Not the solution we have identified and that we want to “push”)
  • Is it urgent and critical?
  • For whom? Who has this problem? Be specific.
  • Describe the Buyer. His priorities. His success metrics (revenues, not getting fired, be promoted, make more money for his practice, etc).
  • Research and describe demographic attributes, habits, behaviors, attitudes, perceptions, emotions and reactions.
  • Is there anything that can’t make her sleep at night? What is that?
  • Create a lifelike description of the Buyer persona and share it with your team. Do they recognize her? Iterate. Interview face to face, iterate.

A buyer persona guides us to create solutions that resonate with buyers, do not require useless and expensive promotion channels and huge investments on sales to “create a need” (this does never work anyway in the long-term). If well done, we will be able to see the world through her own eyes so we can create the right mix of “product and demand creation engine”.

 

OK but…What is it for?

How many times you DON’T ask this yourself?

Articulating your preferred use case (what’s it for?). Seth’s Godin, http://bit.ly/p4srU8

It’s possible to open a can of paint with a $500 Kramer knife. Not likely, and certainly not a market segment that’s going to help Kramer’s business flourish.

At many suburban libraries, the majority of patrons do nothing but ‘rent’ popular movies on DVD. This isn’t an efficient use of the space or the staff, but that doesn’t make it any less common.

Some non-profit organizations are organized to get donations in dollars and dimes, and while they won’t turn away a $50,000 bequest, it’s not something they’re focused on.

Every organization starts with a (usually unarticulated) use case. The founders imagine the best use of their product or service, the situation that they’re organized around. It can involve answers to the following questions:

  • How does someone find out about what you do?
  • How much do they pay for it?
  • When they’re engaging with you in the very best way, what happens? What’s accomplished?
  • What do they do after they use it?
  • How often do they return?

If you put a fancy restaurant on a fancy street, your use case doesn’t involve nannies with a few kids coming in for just a cup of coffee. On the other hand, that might be exactly what a cafe down the street is hoping for.

If your blog is designed for regular readers and a thoughtful dialogue over time, then generating traffic with linkbait, while possible, isn’t going to make the blog work better.

There are two reasons to articulate your use case. First, it helps your staff, your designers, your marketers and your sales force get on the same page about what they’re building and growing. And second, it might be unrealistic. You might be hoping for a market that’s far bigger than it is, or to solve a problem that’s too easy (or too difficult).

When Apple designs a hardware device or a singer records an album, the question must be asked, “What’s this for?” Sure, people can run an accounting business with an iPad, or play one particular song on the album at a party, but is that what it’s for?

Many organizations will take any customer, any time, and bend and writhe to accomodate money in whatever form it arrives. Other, happier organizations understand the benefit of optimizing for a certain kind of interaction, and they have the guts to decline the part of the market that doesn’t want to use their tool/organization the way it was intended

You’ll often be wrong about what the market is and what it wants. When that happens, time to either shift your use case (and the way you’re organized around it) or stick it out but be prepared for a long, tough slog.