Everything is a Solution, No Such thing as a Point Product

Everything is a solution or there is no such thing as a point product.   Here, I don’t use the term “solution” in marketing spin lingo.  I’m not calling a “white paper” an “e-book”.   The point is that every product fits in to a larger context and it must be designed with that in mind.

Take soap as an example.  Just a bar of soap.  Is that an exception to this rule?  Consider this scenario; a company was formed to create some super organic, environmentally friendly bath soap.  To further differentiate their product the decided to sell it in a nine inch long bars complete with ultra hip packaging.  Sound cool right, a sure winner in certain market segments.   Eco-conscious consumers purchased it, felt good about the buying experience.  Then, they took it home, unwrapped the cool packaging carefully, to recycle of course and brought it into their bath tub and/or shower.  After enjoying the ethereal qualities of the aroma they tried to place it on their tub.  What happened?  They spend many minutes trying to find a place where a nine inch bar would fit.  Guess what?  They couldn't.   The majority of bathrooms in the U.S. are designed for a roughly 4 bar of soap.  How many people bought a second bar? Not many since the nine inch bar didn't fit it the overall system. 

So, if a simple bar of soap fits in to a larger system or solution space consider how a technology product does.   I’ll expand more on this in future post and in my upcoming book on Strategic Technology Marketing.

The Value of the Network is Not Zero!

The cloud vendors have taken over the narrative and created the impression that it's all about the cloud (C) and the end points devices (D).  If there's 100 units of intelligence to allocate, the cloud vendors have made the discussion C + D = 100.  And in their mind, C >> D, meaning most of the intelligence is in the cloud and the devices should be as dumb (and cheap) as possible.  What's missing?

The Network (N) is missing.  With the prevalent narrative N = 0 by definition.

The network equipment vendors have failed to counter this argument and have let the N=0 mentality proliferate.

The proper equation is C + N + D = 100

Without arguing what the absolute values of the variables are, it is clear that N > 0.

For "the cloud" to be successful, the industry has to solve this equation and ensure that N is greater than 0.  A dumb cheap network benefits nobody.

Cleantech is more than solar

Many people hear "cleantech" and jump to "clean energy" and then jump to "solar" and then jump to "Solyndra".   Now investors are  looking at cleantech as a much broader market/investment space.  The link below is a very good over view of the scope of clean tech.

http://www.skipso.com/docs/Skipso-CleantechMap.pdf

SDN - Deployment Challenges

SDN (Software Defined Networks) is an emerging technology with tremendous promise to alter the networking landscape and market dynamics for both service providers and enterprises.  However, even with these promises of lower CAPEX and OPEX a significant challenge exist that will likely slow deployment.  Technology? No,  Installed base?  No? The barrier is the organization.

SPs and large enterprises have distinct organizations with separate budgets and head count that focus on the IT/Data Center and the Network respectively.  SDN looks to migrate networking functions to the data center to leverage general purpose hardware (see previous post).  Who's going to pay for the solution?  Who's going to manage the solution?  These issues may appear trivial and solvable and in an ideal world they are.  But in reality, these questions must be address and a deployment scenario that satisfies each of these organizations must be created.

An historical example was the combination of a Class 5 switch POTS card and a DSL modem.  Sounded great, simplified wiring, simplified management etc.  However, the technologist behind this initiative failed to recognize that the purchasers of the POTS card and the purchases of the DSL modems were in different organizations and in the US were legal prohibited from joint purchases.  

The inevitability of "SDN"

SDN in some form is inevitable. Industry after industry has move to general purpose hardware. Only those functions that require high performance specialized algorithms will remain in dedicated hardware. Over time, many of them will migrate to general purpose hardware as well.

Cleantech is Dead, Like the Internet Was is 2000

A very good panel discussion on Cleantech Investing...

Some Key points...
1. The name "cleantech" is a) being expanded beyond clean energy and b) may change all together.
2. The Web and Mobile are underlying technologies for cleantech.
3. If the idea requires a policy change don't go there.
4. Cleantech + IT is emerging as an opportunity. 

From Gigaom...
Throughout 2012, I’ve often heard entrepreneurs and investors working on technologies like clean energy, smart grid, electric cars and even biofuels, talk about the future of the term “cleantech.” It’s an umbrella term that describes very disparate sectors and was created to explain an investment class that has become less attractive to investors over the past 18 months. So, will cleantech as a term die, or morph into a new term? Or will it survive and stick as the preferred name to classify companies looking to address a coming era of resource constraints?

http://gigaom.com/cleantech/cleantech-is-dead-like-the-internet-was-in-2000/?utm_source=General+Users&utm_campaign=e4bb438e7a-c%3Amob%2Ctec%2Cvid%2Capl+d%3A11-17&utm_medium=email

Cleantech VC Investing Paradox

Cleantech VC Investing Paradox

It seems to me that the tier 1 VC investing in Cleantech is caught in the middle. Let's assume that the VC wants to invest $10 Million through the various rounds. On one end of the spectrum are the "home run" major impact clean energy companies. These companies are going to require $100's of millions in capital to reach profitability. For the Tier 1 VC this would imply they would need to invest ~$5 M in the company at an earlier stage of development than they traditionally invest in.

On the other end of the spectrum are the many companies/technologies that have an interesting product that works as planned, but will never be widely deployed. These companies can reach the market deployment stage, maybe profitability or perhaps be acquired with less the $2 million in invested capital. Likely an angel, sophistical angel investment or government grant company.

Thus, the Tier 1 VC is troubled to find a cleantech investment that meets their criteria.

Thoughts?

The Myth of Numbers

Numbers never lie right?  That may or may not be true.  To the marketing professional it doesn't matter.  Your goal is to make the numbers support your messages.

For example, consider the following.

4 out of 5 doctors think drug X is great.

If you market drug X you'd say...   80% of doctors think drug X is great.

If you market drug Y you'd say... 20% of doctors think drug X is useless.

Same numbers, two compelling statements, yet two very different messages.

The lesson here is not to worry about numbers.  You can spin a story that supports your goals regardless of the actual "numbers"

Marketing is all about the color gray

Marketing is all about the color gray.  Nothing is pure white or pure black.  To the engineer it is black or white or a "1" or a "0".  Does the LED blink when it's supposed to?  Does the software do what it was intended to do?   Similarly, to the sales person life is black and white.  Did they make their quota?  Yes or No, 1 or 0, black or white.

No product or service will EVER be 100%.  It will never be perfect for the customer or consumer.  The goal of marketing is to take the "gray" and make it as white as possible in the mind of the customer.

Invention vs. Innovation

Over the years I’ve had the same conversation dozens of times.  It seems that the words “invention” and “innovation” are assumed to be synonymous.   They aren’t.   Simply put inventions generate patents and innovations generate profits.  The clearest examples are the following.   The laser was an invention, FedEx was an innovation.  I’ve chosen this comparison since the laser is generally perceived to be an advanced technology and FedEx is generally perceived to be a boring post office like delivery company.  

Bell Labs, an American icon, invented the laser in 1958.  Scientist figured out how to excite certain chemicals to generate a single wavelength of coherent light.  Think of a single sine wave moving across a PC screen, a single dimension.  For years the laser was called a solution looking for a problem.  Today, over 50 years later we see lasers prevelant in our every day lives.  We have lasers in our homes with CDROMs and DVD players.  We have them in our offices in printers and in hand held pointers.  We see them in our hospitals as tools for all types of surgeries.  The uses of the laser are the innovations that make money.  

FedEx is an innovation, since it revolutionized package delivery. In fact, according to them, they were created to innovate.  They determined that the "information about the package is just as important as the package itself". With access to this information their customers have created new business models and new supply chain efficiencies that have revolutions industry around the globe. Yet, they are not done innovating. They are a major mover in sustainable transportation with 365 hybrid vehicles and 43 electric vehicles (source FedEx.com).

Inventions are great and help propel future industries. But, it's those that can turn an invention into an innovation that make money and drive economies.

Call me at 978 992 2203 or at gwhelan@verizon.net to discuss how this impacts your technology and business strategies.

Great Quotes that apply to Marketing

These two quotes are very appropriate in today's world.

The first by Einstein....

"If you can't explain something to a six year old, you don't fully understand it"

The second attributed to Twain, Cicero and Voltaire...

"I would have written you a shorter letter if I had more time"

To write the "short letter" in marketing to address the ADD issue discussed previously, you really have to know your products and your target audiences.  When you do, you know which words to use to illicit the desired response.  Words are expensive, you can only use a few (see bill board marketing discussion below).  Therefore, by knowing what will excite your target audience and fully understanding the intersection of your product and them, you will be able to create the terse, salient messages required today.

If SPs become a dumb pipe everybody loses

If service providers become a dumb pipe, everybody loses – even Google.

The answer – Network APIs

Since the worldwide web took off over a decade ago we’ve all witnessed and benefited from constant innovation bring us new services and new applications.  Imagine life without web-based maps and directions or watching videos on your mobile device. Much of this innovation was a result of higher and higher bandwidth to each home and office.

Facilities based service providers do the heavy lifting of building and maintaining a network.  The heaviest lifting occurs in the outside plant part of the network.  Whether copper, coax or fiber the outside plant needs to withstand extremes from the cold of winters to the burning suns of summers.

Over-the-top providers (OTTP) have received essentially a free ride over the SPs networks including the high speed core, metro and the access networks.  OTTP have been benefiting from the build out and upgrades the SPs are investing in.  SPs are struggling to generate any-play bundles that add value, increase revenues and margins and attract and retain customers.  OTTP want the network to be a free dumb pipe.  However, SPs fear is becoming this dumb pipe.

Up to now, everyone has benefited from the constant increase in affordable bandwidth.  SPs have continuously invested in network equipment to remain competitive and to reduce OPEX.  OTTP providers have utilized this increase in bandwidth with a constant stream of innovated applications with an increasing amount of video and rich media.  They’ve benefited with an increase in number of users thus revenues.  Consumers have also benefited from the SPs and OTTP investments by enjoying an exponential increase in compelling and useful applications.

History – SPs continue to invest – everyone wins.

SP revenues go up
SP’s network investment goes up
Bandwidth goes up
Innovation engine continues
OTTP revenues go up
Consumers benefit from new compelling applications and services


If the OTTP get their way and the SPs do in fact become a dumb pipe everyone loses.  If SPs are an electric-like bandwidth utility with fixed margins their infrastructure investment will become flat or will decrease.  Equipment will be depreciated over 20 to 30 years like Class 5 PSTN voice switches were in the past.  Bandwidth will remain flat with best effort transport only. OTTP will suffer because the end user experience will become “hit or miss” and consumer will abandon sites and application with poor performance. The bandwidth hungry innovation engine will slow to a crawl.  Consumers will be impacted with a sudden halt to new cool applications and services that improve their lives.

If SPs become a dumb pipe – everyone loses

SP’s revenues become flat or decrease
SP investments go flat or decrease
Bandwidth remains flat
Innovation slows
OTTP revenues become flat or decrease
Consumer do not benefit from new cool applications and services



The Solution

SP’s need to create value to get the OTTs to want to pay them.  A network API strategy properly implemented is the solution.

Small Business Marketing Dilemma

For the small business cash is king.  So when things are going well, you don't feel the need to spend cash on marketing.  Yet, when things are not going well, you don't want to spend cash on marketing.

Perhaps the answer is to spend cash on marketing when things are going well to keep the pipeline filled.

ADD is a Global Phenomena

ADD or attention deficit disorder has been widely discussed at the latest condition affecting young people today.  It seems that all childhood issues ranging from misbehavior to poor grades is attributed to ADD.  Perhaps it's the manufacturers of Ridilin(R) that are driving this epidemic.  Let's not belittle those that suffer from some maladay, rather let's adopt the concept of ADD in modern day life and how it impacts marketing today.

ADD is a global phenomena.  It's not limited to the US and advanced western economies.  People around the globe are overwhelmed with information and advertising and are awash in choices.  Whether it's a the beer store, the supermarket or on the TV, global consumers have more options today then even one year ago.  

The causes of ADD are many.  We can point to the proliferation of texting and twitter for example.  We communicate with 140-160 character messages that would make english teachers cringe.  Our verbal vocabulary has expanded to include "words" like OMG, LOL, .  These acronyms have even entered into our verbal conversations.  

What does this mean for marketers in the 21st century?  The answer is what I call “billboard marketing”.


“I would have written you a shorter letter if I had more time”

This quote in various versions has been attributed to Twain, Cicero and Voltaire.  It doesn’t matter who actually said it first. What matters is it defines the role of marketeers today.  

To get your message across to overwhelmed consumers requires marketeers to sharpen their pencils and spend the time to write the shortest letter possible.  These “letters”, whether documents, presentations or videos, need to get the key message(s) across quickly.  The apt metaphor is the billboard.   

Billboard marketeers need to get their message across to drivers in less than a second.  Think of driving down the highway at 65 mph and glancing at a billboard.  You don’t have time to read lines of text.  You have time to grasp an image and a key phrase.  That’s why billboard marketing is the ultimate form of messaging.  Creators must boil the value proposition over and over again until they have it terse to the nth degree.  Figure 1 shows some examples that illustrate this point.

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Figure 1

Examples of Effective Billboards

Source: Google Images

These examples are effective since the leave the view with a clear message of the value of the product.    Looking at the first on, we see a tasty hot dog and are asked whether we love dogs.  If we do, we leave with the action to think Pink’s.  The second example hits the viewer with a simple message:  Natural, a pineapple and Skyy Vodka.  As you can see each of these takes advantage of the number 3.  

Call 978 992 2203 to discuss how billboard marketing can work for you