Posts Tagged ‘apple’

Product led organizations build categories. By Peter Zaballos

March 6, 2018

Part four: Product has the obligation to set the tempo of transformation 

Every business needs to have a laser focus on the needs of their customers. Look no further than Amazon, who has a legendary, systemic, DNA around customers. Literally their customer obsession.

A few years ago I had an opportunity to speak with an Amazon exec about the business he was running and the priorities he had in building it. This business was a direct competitor to a business of Apple’s, and I noticed the Amazon exec was using both an iPhone and a MacBook Pro. I asked him, “why are you using products from your competitors, effectively helping fund them?” – his answer was disarmingly reflexive and sincere. He simply stated “why would it serve my customers better for me to use products that made me less effective at doing my job?”

MountEverest

What does this have to do with product led organizations?

Bringing a category to life and Amazon have the same customer focus.

I wrote earlier about when you’re building a category it’s important to not listen to your customers – don’t let them dominate your near term product priorities. You owe your customers the maniacal focus on your bold vision, and bringing that to life over time, not attending to their long list of improvements in their limited field of view.

Which means product will have complicated relationship with sales and customer success. Sales and customer success are faced daily with enormous input and demands about the here and now. And they should focus maniacally on how to win today’s prospect sale and ensure today’s customers get the value they were promised. But the product team needs to be super careful to include only the most critical few of those customer and prospect needs in the roadmap. The category is the high order bit here.

Your category gets built by bringing tomorrow’s promise to life. I’ve seen companies falter and stall when they take their eye off the category defining focus and shift it to the priorities of their sales teams or their customer success teams. Worse, if the next 90 days of your backlog is the only commitment to your roadmap, you’re never going to build a category. You need to have appropriate commitments to what needs to get done three, six, nine, and 12 months from now.

The product leadership needs to behave like the CEO of their product. That means to operate with a strategic purpose and context. Sure, they need to hear the near term need from sales and customer success, but like a CEO, they’re measured on their ability to perform today but also ensure the company realizes its potential. This is so wonderfully captured in Ben Horowitz’ now legendary 20+ year old essay, Good Product Manager, Bad Product Manager. If you haven’t read this. Do so. Now.

Focusing on the bold future can introduce some awkward dynamics to organizations not used to thinking with a category mindset. In a product-led organization, sales and customer success are going to feel pressure to keep up. They’re going to have to become capable and fluent in understanding the trends and priorities that make the bold product vision important. They will need to fully internalize why the category is strategic and important and be able to explain it to their prospects and customers.

In sales or customer success led organizations, the opposite occurs. The product team will need to simplify and reduce the vision and explain the plan using the terms of today. No matter how well you do this, you’ll never build a category. You’ll just hit a forecast. For a while.

I’ve heard some executives at tech companies use the excuse that “we can’t let the salespeople know about the roadmap, because then they won’t sell what we have today.” If that really is true, then that’s the tell-tale sign that the company in question is not a category builder. Because category builders have salespeople who are experienced and savvy enough to sell what you have today, and who can also convey the compelling nature of what is coming. And why buying today’s product puts that customer on a more compelling and secure future.

No one less than Steve Jobs understood this with his typical clarity. Observing that the difference between technology companies that function as sales organizations versus technology companies that function as product companies is that the sales-led organizations will revert to today’s product. They’re not wired to think about or develop big, bold new products.

Companies like Salesforce have mastered “product-led” organizational behavior. Just watch one of Marc Benioff’s keynotes and you’ll see him talking about capabilities that likely won’t be real for years, but speaking to them as if they’re here now. Their salespeople know how to straddle these two realities. They know that you’re going to be better off getting on the platform now and be better off over the years as the promises get delivered.

Product-led organizations build categories, and categories are the product of a bold vision that the marketing organization communicates and aligns the company around, and a product strategy that brings the category vision to life. And that’s good for your customers. Give them something they can’t envision. It’s never been a better time to be a technology company CMO.

 

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Startup advice brilliance

October 21, 2009

A friend pointed me to a superb summary of advice for startups, specifically calling out the ways that advice can be flawed, along with some perceptive insights into how to identify advice that’s actionable and useful.  The post is by Eric Reis, and is appropriately titled The 10 Ways Startup Advice is Flawed

Eric’s pov is appropriately snarky, and at a macro level he calls out various ways that being lucky and being smart are frequently confused with each other.  Snarkiness aside, the really valuable point he makes is how important it is to be a critical thinker, in general.  The value of making your own assessment of the information you’re consuming, and not just accepting it.

I especially liked his point #6: Maybe the thing they did used to work, but it doesn’t anymore

I think about that a lot in my own context.  I was at RealNetworks back when it truly was pioneering this new phenomena of sending audio and video over the internet, and we owned that market.  In public we said we had 85%+ share of the market, but in reality it was closer to 95% for a good long time.

We called the shots, named the prices, dictated terms.  We muscled into and out of markets we cared about, aligned ourselves with titans of the technology landscape.

And then Microsoft showed up and we fought them tooth and nail.  It was a hard and ugly fight, which they eventually won (once they started paying attention).

Well, they won, sort of.  It was epic, and in a start-up kind of way, it was epic fun.  I remember picking a big fight with the Windows Media team on an internet media list-serve, where I’d just published some user research showing how people preferred our new video to Windows Media’s.

And Microsoft’s head of a/v technology posted to the list, accusing us of fluffing up the research, and he included a three page outline of the ways you could falsify/skew consumer surveys.  And it was so much fun to respond to the list , asking “how was it that Microsoft knew of so many ways to distort research?”

But I digress.

We each became so obsessed with each other we quit paying attention to what Macromedia was doing with Flash and what Apple was doing with the tight coupling of iTunes and the iPod.  So, while we were both wrestling in the mud pit, Apple and Macromedia left the building and started more interesting and lucrative businesses elsewhere.  And until that point the thing we did at RealNetworks really did used to work.

Eric’s “ten ways” are simple and insightful.  The hard part is putting them into action, in the moment.  My experience at RealNetworks is valuable to the startups I work with and talk to if and only if both of us are cognizant of its context.  And it takes discipline and a good dose of humility to walk the talk Eric is alluding to.

I know there’s a ton of stuff I did that was a product of luck and timing, and a lot that was a result of deliberate hard work and applied intelligence.  The hard part is being honest enough with myself to examine where those boundary lines are, to strip out the specific circumstantial knowledge from the generalized, truly durable knowledge.

So, let’s all get a good laugh out of Eric’s list, but also remember how hard it is to actually do what he’s suggesting.

My guest post on TechFlash

May 6, 2009

John Cook was kind enough to let me guest post on TechFlash today, on a theme which turned out to be quite timely given Amazon’s introduction of the new Kindle DX.  The post is about how mobile consumer devices like the Kindle and the iPhone have finally wrested the grip of the mobile phone networks from the device itself.

To me it’s a rare instance where you can witness an industry transformation occur before your eyes.  Or perhaps watch a train wreck occur in slow motion.  The carriers will never be the same, but holy cow, we’re all in for some great new mobile products and experiences as a result.

You can find my post here:  The Kindle, the iPhone and the wireless carrier as commodity

The iPhone – Virtualizing enterprise market share

April 8, 2009

It’s always good to state the obvious:  there is no way Apple will ever make a dent in overall PC market share, much less get into the enterprise desktop or server business in a way that’s relevant.  The reasons are so obvious most people don’t realize it.

The Mac will never duke it out at the low end, much less hang out with the netbook crowd because the lower margins don’t work with Apple’s business model.  HP, Dell, Lenovo – they get to have all the “fun” sorting out the volume/margin voodoo.  Lucky for Apple there’s a large enough segment that will gladly pay a premium for an elegant, integrated, and stable computing experience. 

And guess what?  Apple gets nicely rewarded:  in the fourth quarter of 2008 Apple’s operating profit was 11% while HP’s was 5% (for their personal systems division). 

But what about the corporate market?  What about all those enterprise customers who you can build lucrative, durable, “sticky” relationships with?  Businesses built from hard-fought battles over market share, premised on whoever sells the most laptops/desktops/servers to corporations reaps the rewards of valuable added services that run on them.  Has Apple really just punted on this?

No, they’re smarter than that.  They’ve realized in a world of cloud computing and web delivered applications, their leverage into this market doesn’t come from desktop unit volume.  It comes from inserting the iPhone into the information flow between businesses and their workers. 

But hasn’t every big mobile device supplier tried this already?  Didn’t Nokia bet a huge part of their farm on this with various “Communicator” handsets? 

What about Microsoft with Windows Mobile?  Wasn’t that supposed to provide the worker/enterprise tether?  It was but it never did.  It neither generates significant revenue for Microsoft, nor has it gotten durable traction with business users.  Dan Frommer of Silicon Alley Insider does a great job explaining why it’s a tweener in the worst way.  I can tell you that my two years using a Motorola Q were the longest mobile “computing” years of my life.  One of my partners compared it and an iPhone to “showing up on horseback (Q) when everyone else is arriving by jetpack (iPhone)”.

And as Network World pointed out, Blackberries are great at corporate email and “legacy” enterprise applications but are not great mobile internet experiences.

These companies forget that it’s not about them and protecting their business franchises, it’s about the user experience.  Apple is the first company to get the complete mobile internet user experience right.  Microsoft, Nokia, even Blackberry/RIM probably have done a better job getting mobile computing right, but in a world of web services, I think the operative term is “internet”, not “computing”. 

So how does Apple become relevant in the enterprise?  By virtualizing its market share.  The battles to be fought in enterprise computing over the next 5+ years won’t be over email and ERP, they’ll be around cloud-based services, web-delivered applications and mobile interactions with them.  Market share leverage will be measured in mobile devices, not desktops. 

And until the iPhone arrived, no one had a compelling mobile internet experience.  Hundreds of millions of other phones shipped, and they all suck at the mobile internet.

In an April 2008 report, Gartner found the iPhone is clearly having an impact on IT strategy.  Of their survey respondents, 65% were responsible for supporting, managing and/or provisioning enterprise mobile solutions.  Of these, 13% said they either currently supported the iPhone or had planned for it, 64% said they were currently researching/evaluating support for the iPhone. 

This is brilliant.  By having major corporations enable iPhone support Apple can get a meaningful share of enterprise users without having to sell a single desktop, laptop, or server:  13% share of mobile support is 10x+ Apple’s share of enterprise desktops.

No one is focused on this, and it makes me wonder if Apple likes it that way.  Keep the “iPhone is a consumer product” head-fake going long enough to get a strong foothold with enterprise users.  And if Apple can instill in those users the loyalty they’ve instilled in consumer iPhone and Mac users, well this could be brand new territory in enterprise business.

The reasons are so obvious most people don’t realize it..

The next big thing

April 7, 2009

“What’s the next big thing?” I get asked this a lot, and a lot of VCs get asked the same question too about what’s the next big trend/device/web-service/… and that always makes for an awkward detour in whatever conversation preceded the question.  The truth is “I don’t know.” And it’s a great answer, because none of us do. 

The next big fill in the blank only becomes apparent in hindsight.  It’s not that I’m not smart nor anyone else who gets asked this question, it’s just that you can’t really tell.  Sure, I’ve got favorites (twitter is now at the top of my list, but I wouldn’t have said that a year ago). 

Remember when Google actually was in beta, in 2000?  It began appearing on people’s desktops where I worked at RealNetworks.  We thought it was cool and efficient, but there were ZERO people talking about it being the next big thing.

Last Thursday’s NY Times had an interesting article about the rising popularity of “netbook” computers, and how these are a big emerging phenomena enabled by a structural technology shift in the computing landscape: we no longer need Microsoft, and probably Intel.  The next big thing?  Maybe.  More on that in a second.  Let’s look at newspapers.

Clay Shirky did a phenomenal job explaining the collapse of the newspaper industry on his blog, pointing out it too results from a structural technology shift – the internet.  Clay references Elizabeth Eisenstein’s book, The Printing Press as an Agent of Change, where she observes that during these technological transformations the only obvious effect in the moment is the destruction of the status quo.  What transcends the status quo takes time to emerge.  Clay sums this up well: “That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place.”

In the case of netbooks, we’re about to see a lot of old stuff get broken, but it’s not clear if netbooks are the transcendent replacement, or just one of the convulsions of the revolution.

But netbooks are significant because they’re exploiting the growing vulnerabilities of Intel (price, performance) and Microsoft (price, legacy support, integration) at the low end in the same way that Apple is (more elegantly) exploiting them at the high end.

Netbooks have traction because they focus on where people spend the majority of their computing time: web-based documents and services, and the consumption of digital media.  That’s it. 

Whether or not someone buys one, netbooks educate the average citizen that GoogleDocs and a browser are all you need, and that MS Office is both irrelevant and overpriced.  My belief is the impact of netbooks will not be felt so much in unit volumes, but as catalysts speeding the unraveling the Office franchise. 

But wait, there’s more.  How much distance will separate the Office franchise “unraveling” from prying MS’s grip off the operating system?  Apple can’t do it, and is smart enough to steer clear of this outcome.  Will Android and Linux be good enough at the low end?

We’ve already seen the indifference that’s greeted Windows7, and the reluctance to even adopt Vista, with people scrambling to stick with XP.  My family did exactly this in February when our five year-old XP home computer died, and we scrambled to find someone who could sell us a new XP machine (we succeeded).  It was an intelligence test.  XP or Vista…hmmm.

Maybe this reveals a nuance to Clay’s “revolution” observation.  Perhaps the path to destruction takes you through the terrain of irrelevance.  What netbooks show us is how irrelevant the once mighty Microsoft and Intel platforms are to the needs of people today.  They may be lucrative businesses but they just no longer point to the future like they used to.  They’ve become what’s broken in the revolution. 

It’ll be exciting to see the new stuff that’s put in place.  I’ll be sure to blog about it, after we all see what it is.