Empirical Rationalism and Other Oxymora
IT & Software
Highrise Surprise
Mar 20th
After a long wait, 37 Signals (makers of the venerable project management/collaboration tool — Basecamp) recently launched a new contact manager called Highrise. Although, I think there is room for a lightweight software-as-a-service (SaaS) contact manager, I am not quite convinced on this one yet. Although it offers basic contact tracking, tasks and a nice dashboard, the functionality is pretty limited for the price. On the plus side, in true web 2.0 fashion, the product does offer RSS feeds and the ability to tag your data. If you upgrade, you get additional “case” functionality (from what I can tell, this seems to be similar to the groups capability in other contact managers). If you decide to upgrade, the personal version is $12 per month (i.e. $144 per year for up to 3 users), but that only gives you 200MB of storage and 250 contacts. What do you do when you get that 251st contact? I know more than a few people with more than 250 LinkedIn contacts. The price goes up from there. Twenty-four dollars per month gets you in the game for 6 users, 400MB and 5000 contacts; for $49 per month, you get 15 users, a gig of storage and 20,000 contacts. If you are OK with the limited feature set, these plans may be alright for a small business.
Verdict: True to the 37 Signals reputation for usability, this product is easy to set-up and very easy to use use. However, compared to other options the product seems very feature light. In all, I love the concept, I like the interface and ease of use, but the free and personal editions are basically useless for anything more than freelancers or tracking job opportunities.
Update: I’m not the only one underwhelmed. Stowe Boyd’s (no relation) review here.
Development of Open Product Platforms
Feb 14th
On Monday, Karl Long over at Experience Curve talked about “2.0 Ideas Executed with a 1.0 Mindset“. As an example, he cited the new Nike/Apple appliance that converts your iPod into an accelerometer. In a nutshell, he thought that the ‘black-boxing’ of the application was a lost opportunity for both companies. Rather than producing a “polished, monolithic” product, “real power could be unleashed with a couple of API’s … to use [the data] in other ways”. With this particular example, there is a fine line between providing an open application and addressing security/privacy concerns (recall the University of Washington student that hacked the device, igniting stalker fears). However, clearly (and sensibly) Apple developed the iPod in such a way that it could easily extend its capabilities and functionality — at this point, they’ve regrettably chosen not to make the platform “open” to external developers.
This example does highlight some of the challenges that companies are going to have to face as they adopt a “platform” approach to product development. First, you need to figure out how much of the platform to expose? In his new book, Wikinomics, Don Tapscott writes:
Conventional wisdom says that being open is rather like inviting your competitor into your home only to have them steal your lunch. But in an economy where innovation is fast, fluid and distributed, conventional wisdom is being challenged.
Winning in a world of cocreation and combinatorial innovation is all about building a loyal base of innovators that make your ecosystem stronger, more dynamic and more expedient than the ecosystems of your competitors in creating new value for customers. To achieve this, your organization — regardless of the sector or line of business — needs to identify and open up platforms to enable mass collaboration.
This is all fine and well, but if you open your platform up too much, you may loose control of it. As a business, you need to decide what to keep as proprietary and what to open up. In the case of Apple, they have decided that the iPod is a closed system and sees unauthorized hacking of the device as a threat to the business (according to Tapscott, p. 134). In contrast, other businesses such as Salesforce.com, Google, eBay and SAP are aggressively trying to become platform players.
The next challenge is to figure out how to commercialize your platform. As a platform provider, you have to think differently about the nature of your business. It is no longer about selling new features and capabilities to prospects and customers; it’s about creating a massive installed base of users. Except for a base feature-set that initially ensures a wide distribution of the platform, you leave the development of increasingly niche products, services, features and capabilities to partners (and, in some cases, even customers themselves) From a product development standpoint, your job is to enhance the platform thus ensuring lock-in for both the customers and developers — your profit comes from charging both groups for access to the resulting ecosystem.
A contemporary example of commercializing an ecosystem is Salesforce.com’s introduction of AppExchange. Over the past seven to eight years, SFdC has developed an installed base of over 25,000 CRM customers. About a year and a half ago, they launched AppExchange to enable third-party developers and value-added resellers (VARs) to create new features and functionality for the installed base using their platform. When AppExchange first launched, one of the criticisms was the apparent lack of an ability (for either Salesforce.com or its partners) to make money from the platform. According to James Governor’s Monkchips:
AppExchange really needs to be a market, not a platform. What matters most is creating opportunities for folks to make money.
So, that brings us to the last challenge — how do you engage and reward platform partners? Although the platform provider stands to gain from the widespread diffusion of their open, but proprietary, tools and technology (i.e. “the platform”), there are significant risks for third-party developers. If you can create a product or service entirely on someone else’s platform, you’re left with no stand-alone intellectual property. Furthermore, chances are the the barriers of entry are pretty low. As a result, you are entirely at the mercy of the platform provider. This suggests that platforms are more likely to be attractive to developers of complimentary, but niche, capabilities that require specialized skills or industry knowledge. However, if your application is too successful, it will attract attention and can be easily replicated by competitors. To take these risks, the development partner needs a reasonable expectation that they will make money for their efforts. When introducing a platform, you need to ensure that there is a commercial model in place that appropriately compensates and rewards “co-creation” partners (incidentally, Salesforce.com has responded to these concerns and earlier criticisms, and has since announced AppStore — a marketplace for for AppExchange products and services).
Hola, Mi Amigos. Habla Marketing?
Feb 7th
Skype thinks I speak Spanish (below). A mistake perhaps, but it does raise an interesting discussion point about the future of the marketing profession in an increasingly global market. In their 2007 predictions, IDC suggests that we will see a rise in local/regional software vendors onto the global scene (p.8). Although I don’t necessarily agree with their timing (i.e. this year), I think that it is inevitable that we’ll see the emergence and wide-spread adoption some powerful business technology from beyond the English speaking world over the next few years.
In the halcyon days of international marketing, there was a tendency toward the homogenization of the brand experience, whereby marketers tried to create a single unifying experience across the globe. As a result, we saw some classic, and often humorous, marketing blunders. However, marketers have since learned that creating a uniquely localized experience is far more effective. As a result, many products were developed in the home-country and later modified for local markets by local marketers. In general, home-country marketing execs had control over product development (and in some cases the entire product experience including pricing, bundling, etc) and local marketers had to take what they were given and adapt it to local markets (often with limited resources and confined by head-office guidelines). Over the past 15 years, we’ve proven that marketing is a distinctly local profession. With the rise of regional/local technology providers (not to mention the Chinese manufacturing powerhouses), it will be interesting to observe how the role of marketing changes when the US is no longer the “home-country”.
Smart Phones and Dumb Terminals
Feb 1st
There’s something definitely happening here… Tuesday’s WSJ cites an IDC report suggesting that world-wide shipments of dumb terminals will increase by 21.5% through 2010 (to six million units). As more and more software goes web-based and software-as-a-service, there is less and less need to keep data on the desktop. The benefits are such as reduced cost and increased security are obvious — even if you haven’t fully adopted SaaS. The article highlights one company that was able to replace 750 desktops for 1.2 million dollars. The PM on the project admits that it cost about the same as it would have for new PCs, but they’ll save money in lower hardware refresh rates (there were some additional advantages through server consolidation). The article also cites Gartner, suggesting that the savings can range between 10% and 40%. The downside of course is the decreased flexibility of reduced availability of some applications (i.e. potentially unsanctioned applications such as instant messaging). It should be interesting to watch this unfolds as SaaS increases in popularity and as the cost of “commodity” computing continues to rise with the roll-out of Vista and the new Office Professional.
In contrast, other reports on the rise of smart phones suggest an opposite, but potentially complementary trend. That is, more and more (personal and professional) data is findings its way onto smart devices (that can be more easily be lost stolen or otherwise damaged). If these trends continue, I think we’ll see a real stratification on the types of hardware that people use for business vs. what they use personally. If you can shop, social network, listen to music and organize photos using a lightweight, but powerful, smart phone, why bother taking the risk of doing it using company resources? On the flip side, why lug around a laptop if you can do what you need to for work through your smart-phone browser?
Capturing Feedback and Tracking Influencers in a CRM System
Jan 19th
Although we were discussing the CRM 2.0 definition project, Pete over at Share Tactic raises some really good points about providing the appropriate level of customer interaction (PPM4):
I do like the notion of all my interactions with Company X being defined by me; does it follow then that Company X will need to query my personal preferences each time it thinks interaction might be warranted? What if the desired interaction is simply a transaction? And if the definition of those levels is up to me, the customer, how many do I get to create?
You can read Pete’s post, comments and my response here.
I really had to think about this one for a few minutes, but then it dawned on me that if you view Customer Relationship Management (CRM) as transactional, there will be no way to effectively model response mechanisms for every situation. CRM has to be thought of as a collaborative effort — both inside and outside the firewall. As such, CRM processes and systems need to be able to handle unstructured data as well as implicit and anonymous customer information. This, in turn, got me thinking about how you could model a feedback mechanism into an existing CRM system…
