The Mobile Capability Maturity Model February 4, 2014Posted by bernardlunn in Uncategorized.
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I like being out and about, dislike being chained to a desk so my iPhone is my primary work tool. My laptop is relegated to those things I cannot do properly on an iPhone (eg word processing and spreadsheets).
So I look at any productivity app through the lens of “how good is it on mobile?” I see three levels:
1. The Old Baseline is notification and reply by email. These are systems that somebody else chooses and I participate in the minimum possible.
2. An app that lets you do your daily tasks on a mobile device but which forces you to a browser to configure and set it up. This is the Modern Baseline.
3. An app that gets you configured and running in minutes all on a phone, no harder than a consumer app like Instagram. Trello is like this. This is competitive advantage today and will soon be baseline.
Why I Like Writing January 8, 2014Posted by bernardlunn in Blogging, Journalism.
Tags: blogging, writing
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I have friends who are dyslexic. One saw me writing and asked “what are you doing?”. He assumed I was doing something painful and difficult because I had to.
When he asked me why I was writing, I had to think about the question because nobody was paying me to write and even in the most convoluted indirect economic justification for the use of my time seemed a massive stretch. So I just said “because it is fun”. He gave me a “you are weird” look. I could only say “guilty as charged your honor, yes I am weird”.
So I thought about this a bit more and decided to – yes - write about it. For I am not the only weird person who writes for fun. In fact a lot of Internet entrepreneurs have got rich off our free labors. No worries, Ev Williams et al, I do it willingly and so I don’t begrudge you getting rich from free tools that make it easier for me to indulge my folly.
My inner editor is saying “cut to the chase, write the lede”. I like writing because:
1. It helps me to get my thinking clear. Sometimes this has an economic purpose, I am trying to understand some rapidly changing space in the technology business. I talk to lots of people, read a lot and then the process of writing helps me synthesise. Sometimes (this piece for example), it is just because understanding something is err, fun.
2. Feedback to complete my understanding. This is the beauty of online writing. The most obscure subject finds those other weird souls who are thinking about the same obscure subjects. That is why the Interest Graph is different from the Social Graph and why I tend to enjoy Twitter more than Facebook. Don’t get me wrong, I love my friends and family, I just don’t expect them to share all my obscure interests.
3. Communicating. Its a social acceptable form of madness. The guy opposite me on the train is muttering to himself, talking to somebody who seems real to him but who is clearly not with him in meatspace. He is clearly mad as defined by society. Blogging/tweeting is a socially sanctioned form of this insanity. Thats OK with me, I saw the line recently that falling in love is a socially sanctioned form of insanity; so I am OK with another socially sanctioned form of insanity.
Before blogging enabled everybody to get published, many people made a good living from writing. I do sometimes have a twinge of guilt that I am yet another amateur helping to make life a bit harder for professional writers.
Getting “the vision thing” right in Enterprise Software December 12, 2013Posted by bernardlunn in Corporate Strategy, Enterprise Sales, SAAS, start-ups.
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Lou Gerstner wrote one of the best business books of all time, an educational thriller about how he took an IBM that was on the ropes in 1992 (having failed to adapt to a PC centric world) and made it great again, which he called “Who says Elephants Can’t Dance?”
IBM was in total crisis in 1992. He was asked by a journalist what his vision was for IBM. His reply became famous and much misunderstood. He said something along the lines of “the last thing IBM needs right now is a vision”. A couple of years later he did unveil a classic bland corporate vision statement and then said what he really thought which was:
“So the most important strategic priority for IBM becomes, when you peel it to the core, to execute what it knows – and has known for years. Execution will lead IBM back to success.”
Gerstner did have a vision – to make IBM a customer-centric business – but he recognized that realizing this vision was all about execution. Later in the book he revealed his growing understanding that execution was all about changing the culture.
At IBM’s scale he was right. It was 99% execution and 1% vision. For tiny startups struggling to get noticed in a crowded market, that balance is different. Execution is critical – it always is – but startups need crystal clarity on vision, mission, positioning and so on. Mind-share precedes market-share.
In many enterprise software startups, this is harder than it should be, because executives are like blind folks around an elephant. Each one feels a different part, but only one part, such as the side or the tusk. They then compare notes and learn that they are in complete disagreement.
The different parts of the enterprise software elephant are:
A. Technological Advantage aka “secret sauce”. Externally this is irrelevant. Your customers only care what you can do for them, not how you do it. You actually want to hide this externally and protect it with patents. However, internally you must know where your source of competitive advantage comes from.
B. Customer pain. You must know “what keeps them awake at night” and how you can use your technical secret sauce to solve these problems. The difficulty that horizontal platforms have is that the language used to describe this pain varies dramatically by market. The way that a CXO level person talks about the pain is totally different in a Bank, in a Pharma company, in Government, in FMCG etc.
C. Market Space Labels. This happens when some bright analyst does some pattern matching across vertical markets. They spot that the customer pain being described in such different ways in a Bank, in a Pharma company, in Government, in FMCG etc all have a common theme. They give it a name, a label for the market “space”. All the participants in the market realign to position into this new space and to get into the magic quadrant or other short list paradigm.
The problem for startups is very simple:
By the time the customer pain across verticals has been aggregated into a “space”, it is too late for a startup to become the dominant player in that space. The incumbents can offer “just good enough” features to be signed off by buyers who have already put them on the approved vendor list.
Startups have two ways to meet this challenge:
1. Name the space while you are creating it. It’s incredibly hard to do. In this post I describe how Tibco did this.
2. Just deliver and don’t label yourself. That is what Splunk does. You deliver value and let the market figure out what label to put on you.
Pivots are usually for consumer ventures. This is what I learned leading an enterprise software pivot November 22, 2013Posted by bernardlunn in Uncategorized.
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The company had built a product for a market that evaporated after we had made a few big sales. I was given the job of finding another market. We had a great product that I could position as a framework, some superb developers and a management team committed to going the extra mile for clients (because company survival depended on them being happy).
All I needed were some problems to solve that were relevant to the technology we had.
A wise fellow suggested I go to the City of London as they have lots of money and lots of problems. That is still true today.
It worked. We found a market, closed a few deals to establish credibility in that market and rebuilt the company around that market.
I started with the usual “what keeps you up at night?” line of questioning. Through this I stumbled on a “blue ocean” market that was just emerging (blue ocean means that no other vendors were targetting the market, as the market did not yet exist, but a simple trend analysis indicated to me that a big market would emerge and it did).
I learned three things from this:
1. The technical killer feature was not what we all thought it would be. I came back from the first meeting a bit despondent, because the problem that the client had – which he had freely admitted was very difficult to solve as per all the tech advice he was getting – was not the problem that I had thought best suited to our platform. I was dejectdly chatting about this with one of the developers and he said “oh, that would be easy”. As the client had told me that he considered it tough to solve, once I had a solution the sale was relatively easy.
2. Once means nothing, twice is coincidence, three times is a trend. The first sale just showed what we could do technically. The market did not yet exist – it was only a gleam in the eye for a few people. So we simply delivered a custom project using our framework. The second sale was closer to the market that was emerging. Also on the second sale we turned it into something more like a product, by the usual productization techniques. The client was recognised as an innovator – “a name to conjure with”. Yet we still needed the third client, a more mainstream one, to prove to the market (which was starting to be perceived as a market) that we had a product. Also on the third deal/project we knew enough and were confident enough to really create a product. Then we launched and scaled from 3 clients to 30.
3. When you hit the mother lode, throway the pickaxe and find the money to get a backhoe. This was where we went wrong. We were a boostrapped company. We did OK, became #2 in a good market, got acquired. We scaled from 3 to 30 clients, even the next 10x to 300; but we stumbled at the next 10x. This is where today in America you get calls from Growth Equity Funds. This was in Europe and before Growth Equity was mainstream. We might have been first in the market, but another venture saw the big picture opportunity and seized it (they are now a multi-$billion public company).
Its harder today. There are lots of software ventures with sophisticated frameworks and great developers. The key is still the same – find a problem to solve in a blue ocean market, get three customers ready to rave about you, then scale to meet the opportunity.
Why I am addicted to Twitter but never got the Facebook habit November 21, 2013Posted by bernardlunn in Uncategorized.
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1. No social pressure. You are not upset if I don’t follow you. The social scene in school kinda sucked, who needs that forever?
2. Funny. The hashtag humor around fast breaking events often make my day. It is a new art form.
4. People I wish I had gone to school with. I went to school/worked with some cool people, but sorry guys the Dalai Lama and Yoko Ono have more to say.
5. Lists. To quickly research a new subject, Lists are the best productivity tool since email.
6. Brevity is good. Nuff said.
7. The sense (false but still fun) that you are eyewitness to history (I woz there in Tahir Square from the safety of my armchair).
10. The journalist habit of 10 point lists dies hard.
Tags: enterprise software, negotiation, sales
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As a sales rookie I was reviewing the key issues before a major contract negotiation with my boss. We made a list of a) showstopper issues and b) “not a big issue for us” clauses.
During the meeting one of the “not a big issue for us” items came up. My boss said;
“Hmm, that is difficult. Do you mind if my colleague and I step out of the meeting to discuss this?”.
I walked out thinking WTF; why make so much fuss about a clause that did not matter to us? When we were alone my boss said:
“So what do you think will happen in the cricket today?”
We spent 10 minutes talking about cricket. The idea was simply to make them sweat about a point we were willing to concede so that we could trade it for something we wanted.
Wix, Drupal, WordPress. What my DIY hack taught me November 6, 2013Posted by bernardlunn in Uncategorized.
I am hacking together a site for a startup non profit sporting event. No budget to hire a developer so I drew the short straw (volunteered, yep, I am an idiot). I have never written code but thought I could hack together something using a mix of:
The good news – it works.
The bad news – more painful than I had hoped. More painful for end users but also for your humble hacker. I mean humble. I Am Not A Developer.
Sites like this will thrive by ever deeper integration, increased functionality and superb UX that hides complexity.
Its topical because Wix is doing an IPO. I did not try Wix, I had not heard about them. I also did not try Drupal, too daunting for a non-techie DIY. If I had a budget and my developer wanted to use Drupal I would have said “great”.
So my default was WordPress. I have used it for blogging since 2007, love it. The site I am building is not a blog – that will be one feature in future – but I could set up on my domain and also use Pages. Anybody could see I hacked it with WordPress, not an issue in this project.
WordPress SEO is great. That matters. It plays well with Eventbrite and Paypal (and Wufoo and everything else, WordPress seems to thrive by being a team player).
Eventbrite was great. Toyed with Eventbee and Wufoo, but once again “familiarity breeds contentment” ie I know how to use Eventbrite.
Everybody says “Paypal is a pain” and they are right. Wanted to use Stripe but I am in Switzerland and that was a story of “nearly ready is not good enough”.
Its the programmable web and it works – sort of – and is improving all the time.
There is a quadrant here. Wix and WordPress are in the simple but functionally limited box. Drupal is in the steep learning curve but functionally powerful box. The magic quadrant is still empty.
One observation is that Wix trades on great themes and HTML5. The themes marketplace is cross platform ie I can now choose a theme and implement on Wix or WordPress or Drupal. HTML5 is clearly cross platform.
End note: written on Notes and posted to WordPress by email.
Why Enterprise Software Sales is like Chess (with elements of Poker) November 4, 2013Posted by bernardlunn in Enterprise Sales, SAAS.
Tags: enterprise software, revenue, sales, sales management, software ventures
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Many cerebral developers have an image of sales as a game for smooth talking silver tongued devils who are not over-endowed with grey matter.
Coding is very hard intellectual work. So is enterprise selling. Enterprise sales is like a game of chess with opening moves, middle game and end-game:
- Opening moves in chess are fairly well-defined. You cannot win through brilliant opening moves, but you can lose quite quickly through some dumb moves. The same is true in enterprise sales. People over estimate the value of an introduction. It is not much more than Pawn to Queen four. You need to get through the door to sell, but its what you do when you are through the door that matters. Its not just the credibility of your introduction (first move) but also how you position your value proposition on first email, call and meeting that will determine how well you do when you get to the negotiation phase.
- Middle game is when the sales support guys make all the difference. The process of proving product fit to the specific enterprise requirements is long and complex with a track running from demos to gap analysis to proof of concept. Then the process of aligning stakeholders towards a specific proposal can take place. You cannot plan more than two moves ahead, the best players mix analysis with intuition (“sight of the board”) as well as some time-proven maxims (such as “control the center of the board”).
- End game is when the closers score. Some sales guys are no good in the opening moves (they expect the company to set them up with lots of qualified leads) and they are hands-off during the complex hard work of the middle game. This may annoy the hard-working folks in marketing and sales support, but they can get away with it because they are great closers. Watch out for these guys at your Gorilla competitors. A naive start up can align people around a perfect demo, gap analysis and proof of concept only to find the deal snatched away by salesman sammy at Bigco who trashed you with a well timed comment to the decision-maker over golf or cocktails.
The reason that winning at enterprise sales is so much fun is that it is cerebral but it is not only cerebral. You need good EQ as well as good IQ. Or, to put it another way it is a mix of chess and poker and as Bond says in Casino Royale “in poker you don’t just play the cards, you play the person sitting across from you”.
Thought leadership selling for enterprise software October 31, 2013Posted by bernardlunn in Enterprise Sales.
Tags: enterprise software, sales management, salesforce.com, thought leadeship selling
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There are two core jobs in enterprise software; you either code it or you sell it. All the other jobs, vital as they are, facilitate those two core tasks. In the great companies there is a culture that synthesizes the best of the coding world and the best of the sales world. In those companies, both techies and hustlers respect each other and know that they depend on each other like mountain climbers roped together.
Sadly that kind of mutual respect culture is all too rare. For the first generation of enterprise software, the sales guys ruled and they often abused that privilege. It is therefore no surprise that in the next generation, characterized by consumerization, many technical founders sought to write the sales guys out of the script.
In the consumer world, there is no selling (door to door salesmen are only in history books), there is marketing and that is tightly integrated with the product (lots of AB testing to find out what gets consumers to hit the buy button).
Marketing has become a science. The creative folks and their hustlers, who we watch with such amusement on MadMen, have been banished to the history books along with door to door salesmen. We now have a perfect quantitive feedback loop of analytics feeding into Marketing Automation feeding back into product management feeding back into analytics….
That would be OK if selling to the enterprise one user at a time – the consumerization story – was all that was needed. It is a venture life-stage issue. You may get early traction, the foot in the door, one user at a time using Freemium. To grow your share of budget you need to engage with the people who manage these enterprises (or sell to an acquirer who can do this but that is a very limited pool of acquirers).
In order to sell the big ticket deals to the Global 2000, you need a qualitative feedback loop integrated with this quantitative feedback loop. That needs flesh and blood humans, there is no way algorithms can do that.
These humans need to practice a form of creative thought-leadership selling that has become a forgotten art. It is an art not a science because you need to interact with a lot of smart, powerful people and no amount of process will replace a talent for convincing people. It is a forgotten art because enterprise software has been in a coma for the last decade. Most of the best minds moved into consumer ventures.
Unfortunately when you find the folks who still know how to do big ticket deals with the Global 2000, many of them are uncomfortable in the new consumerized social media data driven world.
The money quote is here:
“Take Salesforce.com as an example. This was an organization that took cloud-based software-as-a-service for customer relationships into the mainstream marketplace. There are several elements to its success, namely a strong product, but it also has an army of thought leaders who specialize in app development, sales lead development, sales management, etc. that helps customers do their jobs better. Salesforce’s model, driven by product success and thought leaders, has led to a familiarity with “the cloud” and a willingness to accept it in a corporate environment. These achievements not only helped the cloud computing industry with adoption rates, but helped make Salesforce a leader in the cloud-based CRM space.”
I think of this more simply as “bloggers who sell or salesmen who blog”. I use “blog” as short-hand for insightful trend analysis about your market (fully recognizing that lots of blogging is empty drivel).
It is no longer good enough to have thought leaders blog and sales people sell. The buyer has to want to meet the sales person. They can get the insights from the blog. Why would they want to spend an hour with a sales guy who will just parrot the same info you just read on the blog?
This is easy when all the selling is done by a founder, which is clearly not scalable and is a tough transition for many ventures. Getting a whole team of thought-leader sales people is harder.
Tags: adjacent markets, bowling alley, crossing the chasm, enterprise software, marketing, niche markets, sales, whole product
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For years Crossing the Chasm was the closest that Silicon Valley startups had to an operating manual. It fell out of favor when the focus was on digital consumer ventures, but people are dusting off their copies as we are now in an enterprise software renaissance.
“Market momentum picks back up in the Bowling Alley phase, as early pragmatists in certain
customer segments overcome their reluctance toward discontinuity and adopt the new
technology to solve niche-specific problems. By their nature, pragmatists are reluctant to
adopt new technology and prefer to follow the herd. Early pragmatists are forced out of
their comfort zone to find solutions for broken, mission-critical business processes.
The Bowling Alley phase takes its name from the market strategy that is appropriate. The
key to success is to provide a complete solution for one segment while identifying closely
aligned segments that could benefit from a similar solution. When the momentum from
successfully capturing market share in the first segment (the lead bowling pin) is felt,
this momentum is leveraged into adjacent segments. By dominating several segments, your
company may start to emerge as a sector leader.”
That describes the strategic mission – that is the easy bit. Actually winning those deals and delivering those move-the-needle projects is a lot tougher, particularly today after “enterprise software’s decade in a coma” has left many of those skills rather rusty from lack of use.
Each niche is like a foreign market. Literally, niches like this have their own lingo, the jargon that feels like listening to a foreign language. You can translate the jargon, study the subject, but you will still feel like a foreigner mangling French in a Parisian cafe getting supercilious stares from the waiter. The people in these niches all know each other
well, these are dense networks which spit out antibodies to reject outsiders.
You can break through into these niches but it requires creative selling techniques that have been forgotten in the last decade. Consumer start-ups don’t need to sell, they market online using their product. Consumerized SaaS startups believe that this is also the way to win the enterprise. It may be the way to get your foot in the door of the enterprise, but to really win the big tickets you have to solve really big pain points.
These creative selling techniques usually start with some variant of asking “what keeps you up at night?” You are looking for the kind of pain that is so acute that the customer will overlook the fact that you are a startup with radically new technology.
It is good to first read the guide books to this foreign land and talk to people who have lived there. You need some familiarity with the lingo of this niche market, understand “what makes it tick” and some theory of where the pain might lie that you can fix. Even open ended questions need a focus. But remember, “no theory survives first contact with a customer”, keep an open mind and stay light on your skis. Opportunity often lurks in the parentheses, the seemingly unimportant throwaway comment that shows you the real hot buttons.
You need more than a 10x proposition based on a technological breakthrough. You need that to be able to deliver the solution, but that alone only works if your 10x proposition is purely a cost-cutting proposition. That tends to be a tough sell in most enterprises because it involves rip and replace and that is too big a risk to take on a start-up. You can sell a 10x rip and replace cost-cutting proposition if your technology is down the bottom layers of the tech stack and you sell to data centers. For example if you have a way to 10x cut the electricity consumption by servers, Amazon, Google and Facebook will all listen intently even if you are a bunch of techies in a garage and sell one of them and you are off to the races….
However if your proposition is further up the stack, for example at the middleware layer or the application layer, well as they say in Brooklyn….fuggedaboutit. That’s when you have to find a business problem to solve that fits these three criteria:
1. A “big, bad problem” something that really, really matters, that gets the attention of the CXO level guys, that keeps them awake at night. Don’t worry, the Global 200 are going through wrenching changes thanks to the triple tsunami of globalization, digitization and the debt crisis, so there is no shortage of big, bad problems.
2. A problem that is ideally suited to your unique technology, that none of the incumbents can easily solve. There is no point in discovering a big, bad problem that can be easily solved by Oracle, IBM, SAP, etc. All that will happen is you spend a lot of time getting the proposal up the chain of command until a salesman from an incumbent spots it and closes the deal.
3. An internal “sponsor”. We used to call them angels, but has a different meaning now. This is your inside person, who keeps the message going after you have left the room. I think of him/her as an innovator with clout. They have to be innovators because you are an upstart with new technology, so they have to think outside the box and be ready to challenge orthodoxy and incumbency. You will easily find many like this and have lots of conversations where they bemoan how stupid their company is, how politics gets in the way of innovation, blah, blah. These conversations go nowhere. You need an innovator with clout, somebody who is trusted and respected by those with the power to close a deal.
So you have to cast your net really wide to find the few that sit at the intersection of this three-way venn diagram. Cast a wide net and then qualify like hell. Lots and lots of conversations, lots of active listening, lots of “see ya later” when you don’t hear the screams of pain that indicate these guys really, really need you. This has to be more like a guy who has had a
heart attack needing a surgeon than somebody with a headache needing an aspirin.
Once you have found the problem, the hard work starts. This is what I think of as the middle of the chess game. You have opened well, now it gets complex with lots of options and moving parts. Now you have to assemble a solution. It is an assembly job, great for Lego fans. You need these pieces:
1. Your technology at the heart. You will need easy interfaces to all the other bits as you are the newcomer and therefore the one who is most motivated.
2. The other components that deliver a total solution. This could be as simple as the hardware and networking if you are running behind the firewall (yes, that is technically simple but the incumbency innovation antibodies lurk here) or include software components up and down the stack. Remember, you are solving a problem, not selling technology. If you don’t do this hard work, the incumbency innovation antibodies will attack you; an existing vendor will show a “just good enough alternative”.
3. A team that can pull it all together, the system integrator. Your view has to be pragmatic; use your own people, or one of their approved integration vendors or an internal team. This is a key area where your Sponsor needs to guide you.
If you get through this part you are positioned for the end game, you are in the closing zone. That is the subject for other posts.