Category Archives: Business – Marketing

The shiny new gizmo effect: growth predictions and the reality of new products adoption rate

Forecasts on new markets are like vacations in a foreign land you have little information or experience about: the only sure thing is that the experience will not be like you thought it would.

When a new market is created, especially in the tech world, it is always very tempting to assume the best. It is tempting to assume people will jump on this new product or service as quickly as early adopters (they will not, that is why we call the others “early adopters”). It is equality tempting to assume that mainstream users will be as excited about this product benefits as you are. It is also quite optimistic to assume consumers will prioritize the purchase of this new gizmo or service over the many other gizmos and services they already know and want to buy.

Years ago, in a previous professional life, I saw a cool new device: the Tivo set-top box (STB). Everyone in my company (Philips Electronics) was super excited about the concept, and explosive growth was expected. The reality was very different. It’s only when Direct TV integrated TiVo in their satellite STB, a device users were going to get anyway, that TiVo reached a growth inflection point.

Since then I’ve seen this over and over again, and the dynamic is often the same: If your new service or product requires users to buy something that has no connection with anything you already own or want, it will take a much longer time to grow. Unfortunately, “expert” forecasters will almost always miss this and will generate nice charts with big growth that will never happen as planned.

Let’s take a recent example: smartwatches.

When the first smartwatches came out, then the Apple Watch, the industry was buzzing about it. It seemed like it was as great a new product category as the smartphone had been when it launched. When I analyzed this, I just could not see how a device that had “diet smartphone” capabilities, was expensive for what it could do, and needed to be recharged every day could be appealing.

Back then (2014) I saw this projection and could not believe it. So I kept the link and left a note to myself to check the real numbers a few years later to see if indeed I was misunderstanding a genuinely booming new category… or if once against pundits were over optimistic.

Fast forward to today. The smartwatch market is clearly not what was predicted. Look at this two forecast. The first one is from October 2014 (check the URL name), the other from December 2016. Back then the estimated market for smartwatches by the end of 2016 was more than 70M units a year. It’s effectively less than half of this, which is the numbers the forecast initially predicted to be reached as early as early 2015. A two years delay for a three years forecast!

October 2014 forecast: >70M smartwatch sold in 2016

clip_image001

December 2016 forecast:

clip_image002

What does this tell us? It boils down to three aspects:

  1. New markets are extremely hard to forecast and, more often than not, pundits forecast will be more on the optimistic than on the realistic side.
  2. New products require users to get used to the idea of needing and buying this product. Unless you have an incredible value proposition (and even then: see the TiVo example above and this was a pretty good value proposition when you have ads every seven minutes on TV!), it will take quite some time for the adoption curve to go beyond the early adopter’s segment
  3. To accelerate or even trigger the growth of a new product for a new use case (whether to address a real customer pain or just to offer a cool experience that will make life somewhat better) it’s much smarter and quicker to attach this new feature to a product you already want or, even better, need (like the STB for the Direct TV / TiVo example).

Another good example of the latest is the new personal universal translator that Microsoft Translator enables with its new live feature. Of course, we initially thought about building a dedicated Star Trek looking (or Babelfish looking!) devices just for this scenario. However, bundling the feature in a smartphone and tablet app (the Microsoft Translator app) and a browser (http://translate.it) to leverage devices and apps users already had and were already using was a much faster way to speed up adoption.

Are they counter examples? You bet! However, even seemingly overnight successes are often closer to matching the points 2) and 3) above than you may think.

Take for example the Amazon Echo. It sold quickly and to many people and t was a totally new product category. Or was it really a stand-alone new product category? If you think about this product a bit more:

  • It was offered at a lower price to existing Amazon customer: the Amazon Prime members. These people were already Prime members and these members primed the pump on device sales (pun intended!)
  • It offers a Jambox-like feature. A user that is looking to purchase a Bluetooth speaker could pay $150-$300 for one that only does this… or $180 for an Echo. Quite an easy choice
  • With Amazon Prime Music, Pandora and Spotify, the most popular music services are available on Echo. If I already am a customer of one or more of these, the Echo is a simple extension to better enjoy something I am already paying for.
  • Ditto if I use Hue lights, a smart thermostat, etc.

What is your perspective on these points? What has been your experience dealing with third-parties forecast on new markets you were entering?

How SAAS in driving parallel changes in organizations business processes

SAAS, or cloud business in general, is profoundly changing business dynamics. I won’t go into details as these changes are really well documented.

The one element, though, that I haven’t see mentioned so far is that it’s interesting to see how all the traditional business functions have all evolved from discrete time and objectives-bounded activities (with a clear start and finish) to more continuous ones.

Engineering, sales and marketing all have embraced models where their core business processes (product development, marketing campaigns, sales engagement) are now continuing much farther than what used to be their end point.

In product development, it’s well known that Amazon engineers are on pager duty to be able to jump on and fix the code they write if an issue is reported. On the other side of Lake Washington, under Satya Nadella, Microsoft has eliminated its 30 years old model of the Developer-Test-Program Manager trio for a dual Dev/PM one where engineers are responsible to code and fix their features (vs. throwing it to test/QA for them to see if it was working correctly).

Similarly, sales for cloud solutions now involve moving from mostly hunting, to hunting and nurturing deals. This is necessary to ensure that, once deployed, customers are fully satisfied and continue (and hopefully increase) usage of the service vs. cancelling their subscription after only 3, 6 or 12 months. My good friend Jacco van der Kooij just published a great book going through the best practices relative to how to design your sales teams for a SAAS world so I won’t elaborate further. If you are interested in sales-related aspects for SAAS businesses I advise you read it’s fascinating book “Blueprints for a SaaS Sales Organization”.

Finally, Marketing has slowly evolved in this direction of continuous campaigns as well. From a classic prepare-launch-move to the next product launch, marketing has evolved to a continuous process too. Now, campaigns never end but go up and down in intensity (you never want to let the wheel stop spinning), where people move from product launches, to regular content publication, to social engagement, to the next minor or major upgrade of the product, etc. Maybe the term “Go To Market” is not the more aft to describe what’s happening anymore. Maybe Go and Grow To Market? (GGTM).

Either way, this also has, similarly to what’s happening in the sales and engineering organizations, impacts on roles, organizations and metrics. How are you adapting your metrics to these changes? In particular when a particular one (say webpage impression, app downloads or service trials) is a combination of a business as usual result with several marketing activities running in parallel.

To conclude on these parallel changes, an amusing analogy is that all the core business processes, as we moved from installed software to cloud based one, have on their end evolved from discrete digital-like activities (1,2,3…) to more analog-like continuous ones. Or from distinct Qantas to everlasting Waves, for the physics geeks amongst us.

La valeur n’attend point le nombre des années

I recently witnessed some great leadership behavior from our 10 years old and thinking about that the next day this 400 years old quote from Pierre Corneille, “la valeur n’attend point le nombre des années » came to mind.

In a nutshell, it means that you don’t need be all grown-up to display your ability to impact the world around you, i.e. to display your ability to lead.

Let me rewind a bit to explain myself here.

A few months back our family started an informal “family game night” where we would spend an hour or so playing different fun games (cards, board…) together. Our youngest loved it the most and, as other day-to-day priorities took over in the new year, she started to remind us that we were late for our monthly game night.

What came after this, while not earth-shattering, was to me a display of leadership skills that our daughter intuitively demonstrated on a topic close to her heart:

  • First, she gave herself a clear goal: get these family game night back on track => goal setting
  • Then, she decided to come to us with a choice of possible dates for the game night on little cards for us to fill. => strategy definition (made us chose the date but not whether we’ll do it), hard work (made those hand-crafted voting cards), communicate (went around giving them and explain what was expected from us)
  • When several of us did not reply she came back, and went out of her way (such as picking the card I had left on my desk upstairs) to ensure we were filling them out => determination, focusing on getting what she needed even if it meant going the extra mile
  • She then tallied the results => Did the grunt work
  • Called-up a “family meeting” to discuss the results and offer 2 options for the night (once again, not doing it was not an option) => results and action oriented, communicate directly
  • When we pushed back on length, hour and day, she took all our inputs in without missing a beat and then adapted to offer a new option => listening to feedback and focused on a pragmatic solution to reach the goal not on her particular way to reaching it.
  • And finally got us to agree on the day and hour => drove to decision and action.

Thinking about this as I wanted to praise her on this great work she did leading this to resolution I realized she had been intuitively going through steps many leaders take years to recognize:

  1. Decide on your goal
  2. Select and build your strategy to get to this goal
  3. Communicate and get feedback
  4. Work hard
  5. Come with a clear action plan
  6. Get feedback and drive to decision
  7. Execute.

Interestingly enough, two days later I stumbled on this article and found several similarities with what she displayed: www.linkedin.com/today/post/article/20130822180103-15454-a-short-story-about-leadership

I quote the beginning of this article: “The Less Simple Formula for Assessing Leadership = Identify the Problem, Find a Solution, Develop a Workable Plan, Inspire Others, Deliver the Results”

clip_image002

Convincing is not a one-size-fits-all thing

When it comes to influencing or convincing people, the baseline model has been laid down thousands of years ago by Aristotle. Nothing new here. the 3 key aspects he described are:

  • Ethos: Describes your credibility to deliver the argument. Why your experience, education, position, etc. makes you relevant for the audience when it comes to listening to you on the topic you are addressing?
  • Pathos: the emotional aspect of the argument. Why would a person actually care about hearing or discussing about this.
  • Logos: Logic, the actual argument(s) you use to convince.

More on these highly documented and studied concepts abound on the Internet so you can start there if you want to learn more: http://pathosethoslogos.com. Therefore, I’m not going to spend much time on the first 2.

Ethos is about ensuring you have and demonstrate your credentials before trying to convince. For instance I write this blog post because of the thousands of sales, product, business, or people-issues related arguments I had to make across multiple cultures and company sizes. This extensive experience, and various formal institutional and professional trainings, taught me a few thing about Logos.

Pathos is about building a rapport with the person you want to convince. If possible before you need to influence someone, you need to build a rapport with him. Then, you need to communicate your arguments in words that matter to the person (what’s in it for them?). In this case you’re reading this blog post so you already know me in person or through this blog.

However, and even if I know that both of those are simpler said than done, I am going to spend the remainder of this post on the third one: the argument itself (Logos)

As many of you know from having been through various personality tests during your college years and career, and regardless whether it was Myers-Briggs, Insights, or other similar models, people have different personality traits that can be mapped along various axis. However, especially in engineering heavy fields (high-tech, finance…) and thanks to the broad availability of data and tools (from Excel to advanced Business Intelligence tools), I have often seen a one-size-fits all to business presentations: the data driven one. My argument is that, although using hard data to make large scale decisions is extremely important, only using data is missed opportunity. Using only data for experiments is great, it helps you validate assumptions, build your own understand of what seems to be working or not, etc. I’m not talking about quick A/B testing when I say it’s misguided. I’m talking about the big work and life decision or arguments.

Let me start with the –sorry- easy way out for those starting to think I’m losing my mind talking data up here: Steve Jobs. He did not use Excel to make his decisions and he did pretty well. So now that this is out of the way let me get to the core of my argument. It was Steve Jobs. Most of us aren’t Steve Jobs caliber went it comes to vision, nor can we impose our views like he did.

I believe that every good (business) argument should always have 3 core elements. Whether it’s a business plan to get your start-up funded or a new corporate project, if you cover all these 3 bases you will be able to touch all types of personalities and make it much more likely to succeed.

1) Hard Data. Yes, the right data is always a good idea to have. It looks objective (but we know that in business and other aspects of life, data set and interpretations can very often be carefully selected to highlight what we are trying to achieve), and can be shared easily. It also takes emotions out of the equation. My favorite tongue-and-cheek data quote being that 83% of all statistics used in arguments are made up on the spot, like this 83% was.

2) Logic. This is the “Why”  behind the data. It’s important to explain why something happens, or will be possible, the way it is. How did you come to this conclusion. If you can take a rational, Cartesian approach to explain your point step-by-step people will be able to get to multiple “yes”  in the process and won’t feel odd by a somewhat un-intuitive numerical result or real-life example. I have found that using analogies are a powerful way to explain this logical process for issues that are new to a business or a situation.

3) Real life example. This is the one that can be often omitted in business but is so powerful when brought on the table. This is the customer discussion you had 2 weeks ago that goes in the same direction that your argument is going. It’s the personal anecdote that ads color and potentially generates the “get it” moment for people. The caveat is when the example is the only argument you have or when, out of 10 customer meetings, you only use the single one going in your direction. Similarly to data, real-life examples can be twisted to mean anything. Finally, if one example is an anecdote, 5 or 10 of them with the right logic and quantitative data are the nail on the coffin of a persuasive argument.

If you present an argument leveraging these 3 approaches, your chances of success will be much greater than if you only use 1 or 2 of them. In this case, the impact of the whole is indeed greater than sum of its parts.

Let me close by giving you a small example that will illustrate why I believe this is the right approach, and in particular that a data only approach is not the right one.

One of the key axis in personality trait tests is about being more fact/data vs. people oriented. Even in highly data focused cultures, like in high-tech, I have never seen more than 60 to 70% of the population being more “data” than “ people”  focused. If you only use data you will miss out on the (at minima) 30-40% of the people that are not naturally inclined to focus on data first. (data argument)

This makes sense, data has often been used the wrong way. For instance in his book, Straight From the Gut, Jack Welch wrote about how average on time deliveries were used to measure success only to end-up with a system with huge variability but still a close-to-perfect average delivery time. The average delivery time was maybe 15 days…. but plus or minus 4 days. Hardly great predictability for GE’s customers. (example argument)

No one is never purely a “data” person, or a “people” one.  Even the most rational people will still have emotions influencing them. You just have to look at the most rational, poised, data centric person you know when one argues with him or her on religion, politics, a sport (s)he is really into, etc. This will convince you that we all have a non-data, emotional and subjective sides and these sides need to be catered to as well when we need to be convinced. (logical argument).

Convinced yet?

Interesting sources of images for your presentations

In his blogpost of January 7th, Jerry Weissman comes back to the concept of text in presentations or how the content on slides should not be made to be used as reference material after the presentation (i.e. all is written and self-sufficient) too, but how it should add value to the presenter by providing structure, highlights or context (or all the 3 of them).

Together with a few tips he also links to several sites that provide photography and images one could use in his or her presentation.

Always remember that a picture is worth a thousand words.

If I were you I would bookmark this post: www.powerltd.com/_blog/Blogs/post/But_I’m_not_an_artist  . I just did by “saving it” through a post on my blogSmile

Critical mass and leadership

This fairly well know video (also mentioned in Seth Godin’s blog a few years back)  is a great example of how a critical mass can be attained in a group situation. Whether with a generic public at an event (such as in this video), at work or in any situation where leadership is required.

Check out especially the tipping point at one minute 10 seconds into the video, when the 3rd person joins the 2 first dancers.

This is a perfect example of typical group dynamic and some key leadership aspects:

  1. To be a leader you need to go out there, don’t think too much about what others will think but believe in you and your ideas and go for it at 100%.
  2. It might take time before you’re not alone believing in what you’re preaching (or dancing!)
  3. Being the first follower also takes lots of guts. However, you can still pretend you’re not that into it and are just doing it “for the fun”. Probably the best “Image” ROI for someone not willing yet to make a leap of faith and lead… 
  4. The next follower is the one transforming a quest into a crusade, a pair into a group or in plain words the one that create enough “normalness” for many others to join.
  5. Others are just followers. Without them there will be no mass market, no real movement. They are needed, but are just followers…

Who are you? Who would you like to be? When will you (did you?) start doing what it takes for you to be what you want to be?

Jerry Weissman’s new book is available for preorder

Jerry Weissman did it again. The 5th installment of his “Power Presentations” series is rich of real-life examples on how to handle various types of presentations and situations including Q&As.

It will be available in December and can be found in preorder on Amazon.