Competition vs Opposition

Fabulous article in the February issue of Harvard Business Review print ed. (Actually, there’s a few.) The opening line:

“Top executives are good at competing, but when they come up against opposition rather than competition, they flounder.”

A simple example from the article. When Coca-cola battled Pepsi to get their soft-drink vending machines into schools, that’s competition. When parents decided they didn’t want soft-drink vending machines in schools, that’s opposition. (At least one of the soft-drink companies started producing bottled water…)

I can think of another example. Get ready to fall over in shock and surprise… Microsoft. Microsoft is usually at its best when competing, preferably against an established player. (Increasingly hard to do, when you’re the world’s largest software company.) Microsoft is rubbish at coping with opposition. Probably because it doesn’t happen very often. The last time they really faced opposition, it was called Netscape. The solution? Create a near-identical product and compete. Say hello to Internet Explorer. (We’ll not get into a debate about whether the tactics used to compete were fair). The opposition this time around? Google. Microsoft’s tactic? Same as before – turn opposition into competition. Round 1: Try and build a near-identical service. That hasn’t gone so well so far. Round 2: “Hmmm, who could we buy to achieve our goal…” 🙂

Trying to tackle opposition by getting into their space and competing head-on doesn’t always work. Worse still, it can be a disaster. Instead, the article advocates turning the tables on the opposition. And highlights that, in this instance, business can actually learn a few tricks from politics. Adopt your opponent’s issue/solution as your goal but pitch an alternative path for getting there. Tracking Microsoft’s activities in cloud computing and software as a/+ service, I suspect some opposition tactics are also in play but a lot less visible in the news than their traditional methods.

The ability for any and all organisations to cope with opposition is going to become an essential management skill (I wonder if it is on MBA courses). The Internet’s role in social networks combined with mobile phones and instant messaging services have introduce a whole new audience of potential opponents, better organised and more vocal than ever before. Us.

Technorati tags: Microsoft vs Google

Web Traffic Value

The New York Times has an article – The Best Kind of Traffic for Web Sites (free registration required to view) – about the value of visitors to retail web sites. The following chart shows the difference in value depending on whether you click through from a search result, from a paid search ad (i.e. displayed alongside search results) or direct (entering the address of the site in the browser/clicking on a saved bookmark):

Visitors who clicked on paid ad links were more likely to buy and spent more on each order than visitors who click on ‘unpaid’ search results, although nothing compared to visitors who go direct. The chart makes a compelling argument for a) having a short web address (I’m quicker at typing amazon.co.uk than I am at locating it’s bookmark); and b) giving customers a reason to want to come back (I often check reviews at Amazon) and hence remember the address or bookmark it.

The statistics were supplied by Engine Ready, an Internet marketing company, who analyzed 18.7 million visits over two years to web sites run by 27 of its 500 clients. You could ask ‘why those 27?’ A broader data set would be more convincing.

Technorati tags: online marketing; seo

The Vista Blue Monster

You may or may not have heard of The Blue Monster. It started life as one of Hugh MacLeod’s business card cartoons. It evolved. A simple picture conveyed the feelings of so many people who work within Microsoft but who are rarely heard or talked about:

Today, the New York Times has an article describing the Vista debacle – They Criticized Vista. And They Should Know – in relation to the law suit that has kicked off from customers unhappy that their machines were marketed Vista-capable when the sticker should have said Vista-incapable. The law suit has led to the release of a number of internal Microsoft emails and those emails show The Blue Monster has been around for a while but is too often and easily ignored:

The minimum hardware configuration was set so low that ¨even a piece of junk will qualify. It will be a complete tragedy if we allowed it¨ – Anantha Kancherle, Microsoft program manager

¨It would be a lot less costly to do the right thing for the customer now, than to spend dollars on the back end trying to fix the problem¨ – Robin Leonard, Microsoft sales manager

Maybe the lessons will be learned this time. Maybe more internal people need to follow Robin’s and Anantha’s lead. Be prepared to take the risk and speak out when you see the company make a wrong turn. Don’t just wear the t-shirt.

References:

Technorati tag: Blue Monster

Social Networks Long Tail

The Compete blog has posted February 2008 site visit statistics for the top 20 social networks in the US – February Top Social Networks – Make way for the new guys. I thought I’d have some fun with graphics. The statistics for monthly site visits make for a great long tail:

Using bubbles to represent relative size vs growth: (Note: fubar.com has been removed as it skews the graph too much, with 3.2m% growth. Just picture it waaaaaay to the right of Twitter and Ning with a fractionally larger bubble than Twitter)

Myspace might have negative growth (at -1%) but it is a fair bit bigger than its nearest rival. Of everybody else, Twitter, Ning and Fubar stand out for their significantly higher growth rates. The number of unique site visitors is also a long tail but with a little more wiggle in the tail:

And that wiggle shows up some interesting statistics. Orkut has an average of 15 visits per visitor whilst Flixster has an average of 2. They both have roughly the same number of monthly visits. Twitter and Ning have a similar number of monthly visits and a similar growth rate (significantly larger than everyone else bar Fubar). But Twitter has twice the number of visits per visitor… Here’s the complete breakdown:

Only three sites (shown in red) have a ratio of more than 10:1 in terms of visits to visitors. The rest range from 1.5 to 6.6. The first two sites – Myspace and Facebook – account for 88% of the monthly visits to the top 20 sites. The third member of the 10+ club – Orkut – is Google’s social network. (It used to be invite-only but I just checked and it’s now open.) Classmates is the third most popular site in terms of visits yet has the second lowest ratio of visits to visitors (1.9:1). Fourth-placed MyYearBook has a ratio of 6.6:1. If I were an invester, I think I’d prefer sticky eyes to many eyes.

[Update] Just spotted in the comments on the Compete blog post, the statistics used here are for US site visits and visitors only, they are not world-wide (Orkut is huge in Brazil, Bebo is big in Europe).

Source: Compete – http://www.compete.com/; Statistics – http://blog.compete.com/2008/03/07/top-social-networks-traffic-feb-2008/

Technorati Tag: The Long Tail; Social Networks

Mobile Ads Can Work

As mobile technologies continue to develop, it feels inevitable that advertising will ultimately find its way on to our mobile phones. When it happens, it actually could be a very good thing (sadly, the easy spammy bad option will likely arrive first).

Imagine heading out to your local shopping mall, parking the car, and then swiping a machine with your mobile phone. On the display, you can choose which shops within the shopping mall that you are interested in and for how long. You click OK and you have just opened access for those shops (and only those shops) to send adverts to your mobile phone for a limited period of time. A clothes shop might send you a 5% discount voucher if you spend it in the next two hours. Another shop might highlight that free ‘coffee and cake’ vouchers are being given with all purchases over £25. You make a mental note to visit that shop just before lunch… As you walk past the bakery later on, you receive an instant message that all produce is now half price (its late in the day and they need to sell their perishable items).

Done right, this could be a win:win scenario. The recipient controls the process and the advertisers get warm to hot leads versus spamming and annoying anyone and everyone.

The more likely scenario to reach us first will probably be localised search. Imagine coming out of a business meeting, you’re starving and in critical need of a caffeine injection. Open a web browser on your phone, click on a local search form, check the boxes for what you want (food, coffee, wine), the form picks up the location of your phone and you get a list of cafes, food shops and restaurants within 10 minutes of your location, ideally linked to an Amazon-style review system and ‘1-click-to-reserve’ option if you decide you’re sitting down to eat.

Related blog post:

Filed under: Mobility

Technorati tags: mobile technology

Twitter For Sales

That’s the plural. This is not a post announcing that Twitter is for sale. 🙂

If Google can help your CRM, then so can Twitter. If you haven’t yet stumbled upon Twitter, the concept is beautifully simple. If you’ve ever sent a ‘Happy New Year’ text individually to multiple different contacts on your mobile phone, how about sending it once to everyone, whether they choose to read it on their phone or in a web browser on any device with an Internet connection? Like a Chumby (that one is waiting for whole other post). That’s what Twitter does. Restricts texts to no more than 140 characters but enables you to send one text to anyone who subscribes to your Twitter feed.

So, imagine this. Your sales people need to keep track of news that can affect your company or the likelihood of a prospective customer buying something from your company. How about using a Twitter feed to send out regular updates, in real-time.

For example: A Microsoftie travelling to a customer hoping to sell them a search solution based on SharePoint. Would be better to know that an announcement has just been made to acquire FAST than to hear it from the customer. A sales rep travelling to meet a prospect, receives a Tweet that the prospect has just announced their quarterly results. How about using Twitter in your call centre? Send out updates that can help keep everyone informed when making/answering calls. A support engineer discovers a new method for repairing a fault, takes half the time and resources – a tweet goes out and is picked up by all other engineers currently on call. You don’t need war and peace on each subject, just a short announcement that will either tell you what you need or alert you to find out more asap.

It’s a simple concept, the equivalent of that snail mail approach in the 1990s – distribution lists for sending out bulk emails. And yes, you could indeed use that approach instead. But Twitter keeps it short and helps prevent announcements from being buried under everything else that swamps your inbox.

If anything, Twitter is the reincarnation of those little stock tickers and ‘breaking news’ feeds that you could install on your desktop a few years ago. But this time, you don’t need to download any specialist software and you can view the updates in real-time on any device that can view the Twitter feed.

Take it a step further – use Twitter to feed breaking news to your customers. Why restrict the information to only those customers who your sales people are about to see or speak to? Drop in announcements about new products, short term pricing deals, any kind of buzz that might turn a prospect into a sale.

To find out more about Twitter, check it out – http://www.twitter.com/.

Related Blog Posts

[Note: if this post crops up in an odd place, it was half written back on 4th Jan and got lost]

How to lose your brand

Blogging is a bit thin at the moment due to other commitments taking priority, but just read a post that has to be passed on – Companies Without Conversation.

When Hasbro/Mattel hit the news a couple of days ago for trying to kill a Facebook application that mimics the well known game Scrabble, I rolled my eyes in despair. Whilst I understand they have to be seen to protect a brand else risk losing it, you’d think there’s got to be at least one bright bunny in there who would have thought twice before using the traditional route.

Companies Without Conversation is a brilliant blog post describing what Hasbro/Mattel did wrong and what they should have done, along with a couple of other good examples too. Well worth reading. And the post manages to throw in my current favourite metaphor – Meatball Sundae.

Filed under: Changing Systems – Marketing

Dot Com Miss

In the headlines on Techmeme is a blog post predicting a dot com crash in 2008. I’m not so convinced. The conditions are not the same as in 2000. Back then, ridiculously large sums of money were being bet on crazy ideas with a business model as well covered as a thong-wearing butt (it’s Friday night, the analogies are heading South). This time around, it’s possible to start a good idea with minimal investment. To the extent that start-ups are becoming a commodity. Paul Graham has an excellent essay describing the trend – the future of web start-ups. It comes at a time when more and more people are breaking away from corporate life and becoming freelancers. Enough for McKinsey to highlight the effect as one of their 8 business-technology trends to watch in 2008. People have questioned does Twitter have a business model. For many, creating a product that becomes an acquisition target is more than enough.

What I do think we will see in 2008 is a dot-com miss.

People are getting giddy and excited about Web 2.0 acquisitions (YouTube – started in 2005, acquired in 2006 for $1.65bn; Skype – started in 2003, acquired in 2005 for $2.1bn). Myspace, Flickr and Del.ico.us didn’t hit the billions and could be accused of having dealt to soon. But picking the right time to be acquired (or choosing not to, in the hope you will be the next Microsoft or Google) is a huge gamble. Particularly when you are the celebrity in the headlines. If you are not careful, you will get wrapped up in your success and start to feel invincible. Always a dangerous place to be…

In the UK (probably elsewhere too), there is a game called Deal Or No Deal. The concept is simple: 22 boxes, containing various amounts of money from 1p up to £250K. The player has to open boxes, one at a time. At stages throughout the game, a banker offers money to buy the player’s box and stop the game. The amount offered depends on what boxes remain unopened. The player has to choose deal or no deal. Deal, and they take the money and run. No Deal and they keep on playing, hoping that their box contains one of the big numbers. It’s amazing how many people end up with the 1p box. Is that going to be Facebook’s fate? No dot-com crash, just a spectacular miss.

Related links:

Living Company vs One Hit Wonder

In his book ‘The Living Company’, the author Arie de Geus points out that the average life span for a multi-national company (Fortune 500 or its equivalent) is between 40 and 50 years. For companies in general, it’s a massive 12.5 years. In comparison, the average for human beings is 75 years, suggesting we do a better job of living our lives than we do running companies… Not really a fair comparison given that, currently, it is not legal to acquire, merge or break up human beings.

Can Web 2.0 start-ups become living companies?

When MySpace was acquired in July 2005 for nearly $600 million I remember wondering what exactly was NewsCorp buying – a company or a fad, more akin to buying the rights to a movie that will be hot property (and high revenue, hopefully) for a limited period of time. Now, a New York Times blog has articulated the lifespan of a social networking site:

¨They inevitably self destruct because sooner or later using it will stop being fun and start being embarrassing.¨

It’s an interesting statement and makes you wonder if Facebook, having turned down a $1 billion offer from Yahoo in 2006, risks ending up with the 1p box (comparing acquisitions to the UK show ‘Deal or No Deal‘). The New York Times references a great article by Cory Doctorow on Information Week that nicely sums up the challenge of longevity for social networking sites:

¨It’s socially awkward to refuse to add someone to your friends list — but removing someone from your friend-list is practically a declaration of war. The least-awkward way to get back to a friends list with nothing but friends on it is to reboot: create a new identity on a new system … Once that happens, poof, away you go — and Facebook joins SixDegrees, Friendster and their pals on the scrapheap of net.history¨

I love that quote because it goes against the assumption being made by techies that we don’t want to keep creating new profiles on different social networking sites and therefore need a ‘standard’ to integrate them all (see: OpenSocial). Most strategy and management books will tell you it easier (and more successful) to kill something and create from new than it is to change an established business/process/product/whatever, despite the hassle involved in starting from scratch all over again. People experience the same when moving house – do you seamlessly migrate all of your belongings or do you have a bit of a clean-out in the process?

So what will Facebook be worth in 4 years time? (The duration of the advertising deal that was part of Microsoft’s $240 million investment for a 1.6% stake.) I think it is a mistake to assume the value will be higher then that it is today. Some things just aren’t built to last…

Related Links:

Filed in the Library under: Social Networks

Technorati tags: Web 2.0; Social Networks; Social Networking ; Facebook

CRM and YouTube

I’ve never been a huge fan of customer-relationship management (CRM) systems. In principle, a great idea. In practice, it seems many have insufficient focus on the R. I’ve touched on the problem before – no. 2 in Seven Producitivity Tips

But here’s an opportunity for CRM – integrate YouTube. In fact, integrate all the mainstream Web 2.0 technologies that give customers a voice. Then you’ll be in a better position to work on that R. And if you choose not to? Well, hope that your competitors stick their heads in the sand too. Because if they don’t, they might know more about your customer problems than you do…

Reported today on the BBC – BT customer’s YouTube complaint. A BT customer spent six months trying to get to speak to a human being about problems with his bill. In the end, he tried an alternative approach. He recorded his complaint on video and posted it up to YouTube. And 2 weeks later, BT responded and the complaint was resolved. Naturally, BT claims the process was already underway before the YouTube clip appeared.

It’s yet another example to show that you might not be comfortable with Web 2.0 trends but they are happenning anyway. Ignorance is not an option.