Jul

13

iPhone 3G MS Exchange sync pricing strategy

Filed Under business, entrepreneurship, marketing, mobile, product management, strategy | Leave a Comment

Unless someone knocked you out in a hockey fight last Friday and your consciousness has just returned, chances are that you have heard of this thing called the iPhone 3G launch. I’ve been going back and forth on my decision on whether to get it or not. There are 2 things that are holding me back from getting an iPhone 3G:

  1. MS Exchange synchronization pricing
  2. No tethering option

It’s a classic pricing strategy–their (AT&T’s) attempt to extract more value from the wireless consumer segment that well .. has more money to dispose. Not only have they hiked the price of the unlimited data plan by $10/month from $20 to $30, but they charge you an additional $15/mo if you want to synchronize with an Exchange Server.

I’m a price-sensitive customer *and* I’m a techie at heart, thus I simply balk at having to guarantee AT&T’s revenue for 2 whopping years merely to transfer a sequence of low and high electrical signals to some proprietary email server, as opposed to any other email server, or as opposed to just casually serving the web.

The techie in me knows that they’re simply charging more by discriminating against MS Exchange data from casual web surfing, or any non-Exchange email data.

From Wikipedia’s entry on Net Neutrality: Neutrality proponents also claim that telecom companies seek to impose the tiered service model more for the purpose of profiting from their control of the pipeline rather than for any demand for their content or services.

The entrepreneur in me knows that they are just playing it by the pricing strategy books. To that end, I say, all the more power to them. Maybe I won’t buy the phone, but seeing that they are so savvy and nickel and diming the segment I am in (the “tough” crowd), I’m considering buying their stock instead.

My second gripe is the inability to tether the iPhone 3G to a laptop (without hacking it). This point is important to me because when I travel with my laptop, and if I’m in a spot where I don’t have wifi access, I just need that option to tether my laptop to my mobile phone.

Maybe AT&T is worried about people starting to use the iPhone as a modem and thus cannibalizing revenues from their existing wifi hotspot sales. To that end, I feel like if I’m already putting up with the hike in price for monthly unlimited data, putting up with the extra monthly charge for their discriminating against MS Exchange data, it’s just simply un-polite to ding me again by forcing me to cough up even more for a separate wifi hotspot plan. Come on.

And I quote Bruce Scheier:

Anyone with wireless capability who can see my network can use it to access the internet. To me, it’s basic politeness. Providing internet access to guests is kind of like providing heat and electricity, or a hot cup of tea.

I can see how they might have justified this impoliteness though. Corporate users probably have their companies paying for the bills anyway, and corporations have much deeper pockets and can easily justify such a cost as a business expensive. However, this pricing model obviously neglects the average work-for-a-corporation-joe-but-this-is-an-out-of-pocket-expense.

All said, here’s a message from a randomly-selected passionate early-adopting techie from the price-sensitive “tough crowd” segment, to whoever green-lighted this pricing strategy. You guys suck, and I hope you enjoy this video.


How to Get Broke by Buying an iPhone

Jun

3

Real-time stock quotes at rock bottom prices

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Google has just announced that Google Finance now provides free stock quotes in REAL-TIME. The “real-time” part is important, because all the major free stock quote providers (such as Google Finance, Yahoo Finance, MSN Money) has always provided the quotes, but delayed. As a matter of fact, I had coincidentally recently blogged about why they delay the quotes on purpose, which to sum up quickly, is a pricing strategy to extract more money from those who are willing to pay more.

So with Google now providing the coveted real-time prices for rock-bottom prices (free!) you can’t beat, what else does this mean? I predict that MSN Money and Yahoo Finance will follow suit. That’s mostly my intuition since I have no hard facts, but I really do think they will.

If Yahoo and MSN’s finance visitors are not in the demographics where more value can be extracted from (i.e. people who actually buy and sell stocks), then MSN/Yahoo would have no incentive to drive down the price of real-time prices to $0.00 since it’s not a differentiator anyway–but on the flip side if real-time was a differentiator, then start the countdown before MSN/Yahoo tear down the silly self-induced delayed prices (uhh .. look out for your customers/visitors best interest and make them feel happy?)

In my opinion, the delay doesn’t really make people want to fork over even more loads of cash to MSN/Yahoo (so there’s little upside); it’s really more of an annoyance–”here’s your price, but ha-ha, it’s delayed”. From quick cost-benefit perspective, it appears to make sense to not delay the quotes.

For all the other folks like brokerages, if your marketing is around “sign up today and get free real-time quotes!”.. tough luck. Google just voided your campaign.

Kudos to Google for sticking to their corporate values: do not be evil (delaying information on purpose is evil), and to making useful information universally accessible to all!

This actually ties in really nicely to Wired magazine’s Chris Anderson’s (author of The Long Tail) argument on why “free” business models make sense.

Apr

24

SDSIC Integrated Product Management and Development - A Case Study

Filed Under business, entrepreneurship, marketing, people i like, product management, project management, san diego, startup, strategy | Leave a Comment

Recently, I’ve been really fortunate to have met so many amazing people, that I can just learn from through osmosis, merely by just hanging around them (the converse is also true, which is why I am careful to stay way from people I don’t want to model myself after). Two days ago, I attended a San Diego Software Industry Council (SDSIC) event on Product Management where a real world case study was presented by Alan Kiraly, CEO of Enterprise Informatics.

When I last took Rod Whitson’s class on product management at UCSD, I particularly liked the real world case studies that we went over. It was definitely a plus that Rod actually had real world experience to draw from. Likewise with Alan, who is also an industry veteran. The other thing I like about an actual face-to-face event is the people interaction, the stuff that you learn that nobody will actually write in a book.

Here’s a couple of things I picked up from Alan’s presentation.

A solidified and well defined business processes can be quite the competitive advantage. Alan talked about how Enterprise Informatics use their own product for their SOWs “lifecycle” management (eating your own dogfood == awesome!). What I particularly liked about this really manages decision making. Once an SOW is defined, if the time is not right, it can be thrown out in the “parking lot”. At a later time, if the opportunity arrises, the SOW can be picked up, dusted off a little, tweaked and be reused by putting it on the development cycle train.

The obvious value here is in saving time and resource in planning. Planning and strategizing stuff takes time and .. well, brain power! Too many times have I figured a whole plan for something, shelved it, and then later when I want to revisit it, I have to redefine the entire plan from scratch again.

Transparency is good. Ok, so nothing really ground shattering here, but it’s nice to hear about real world problems when transparency is not advocated. In a global and diverse organization, with people working across various continents and different timezones, synchronizing work and expectations can be a challenge. I can surely relate to that–my team at work, consist of folks in California, Australia, Israel, China, France, and the UK.
Read more

Mar

14

Pricing information itself as a product

Filed Under business, did you know, marketing, product management | Leave a Comment

Have you ever tried looking up stock prices online? Let’s say we look up the ticker symbol GOOG on Yahoo! Finance:

yhooticker

Hmm. It says, “Quotes delayed for <ticker symbol>. Get streaming real-time quotes - FREE TRIAL”. And this is the same ticker symbol on MSN Money:

msnticker

Quotes on MSN Money are delayed 15 minutes. Now how about we just look up Google’s stock price on well, Google themselves! This is Google Finance:

googticker

15 minute stock quote delay. Ever wonder why that is?

It’s a pricing strategy. The product here is information–the price of the stock quote. They segmented their customers into those who are casual surfers (who may or may not care about investing) from those who are serious stock traders (stock prices accurate up to the nearest millisecond is critical!). The perceived value of the same piece of information is different to each consumer.

If you suffered from some life-threatening disease and have a week left to live, how much you would pay for information of a possible cure? (note: I said “possible” cure) I’m sure you would sell off everything you have for that information, maybe even taking on a loan. Now if I told you that I have information for a verified cure, but you don’t have the disease, how much would you pay for the information now? None.

This is pretty much the same thing. Companies that are in the business of selling information, are always looking for ways to generate a bigger return from their “product”, and this is one of them — by extracting more money from people who are willing to pay the price.
Read more

Feb

20

Disruptive technology

Filed Under innovation, marketing, product management, technology | Leave a Comment

Summary of Wikipedia’s entry on Disruptive Technology:

  • Disruptive technology/innovation is a technological innovation/product/service that uses a “disruptive” strategy, rather than a “sustaining” strategy (incremental improvement)
  • Can be classified into low-end and new-market
  • New-market disruption aims at non-consumption/untapped market; targets customers who have needs that were previously unserved by existing incumbents.
  • Low-end disruption aims at mainstream customers with needs not met/underserved/overserved by existing solutions. Low-end disruption targets customers who do not need the full performance valued by customers at the high-end of the market
  • Disruptive technology can dominate market by filling a role that older technology cannot fill or by displacing incumbents by means of successively moving up-market through performance improvements (e.g. digital photography)
  • Low-end disruption occurs when the rate at which products improve exceeds the rate at which customers can adopt the new performance. Therefore, at some point the performance of the product overshoots the needs of certain customer segments. At this point, a disruptive technology may enter the market and provide a product which has lower performance than the incumbent but which exceeds the requirements of certain segments, thereby gaining a foothold in the market.

Jan

27

Early adopters & the mainstream users

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This short article on R/W Web gives a quick intro on why you should pay attention to early adopters of your product, but also not wait until it’s too late to “cross the chasm” and rake in the mainstream users.

rw web cross chasm 1 Picture from the Chasm Group.

A common entrepreneur misstep, ignoring early adopters and instead going straight for the mainstream market:

rw web cross chasm 3 Picture from Tara Hunt

rw web cross chasm 2

Read the full article, I do no justice summarizing here (on purpose!)

Jan

1

Steve Johnson on Software: Business or Hobby

Filed Under engineering, marketing, product management, things to ponder about | Leave a Comment

Steve Johnson of Pragmatic Marketing, the winner of Software Idol 2007, gives an entertaining talk about the role of product management in software companies. A 6 min 35 second-clip:

And oh, Happy Q1 of 2008!

Dec

19

Bristlebot

Filed Under howto, marketing | Leave a Comment

Haha, this has got to be the simplest but elegant nerdy toy I have seen in a long time!

Jun

20

Being yourself

Filed Under marketing, product management, self improvement | 1 Comment

As I hurriedly (only had 30 minutes to eat + change + pack my hockey gear) munched down the unhealthy fast-food (KFC’s Tuesday-special 2 leg and thigh, original, biscuit, and mashed potatoes) that I had gotten on the way home from work, I caught a glimpse of Kathy Griffin on some reality TV show, or some kind of interview, showing her typical day. It wasn’t E! True Hollywood Story, but it was something of that nature, but in her present, not her past.

I rarely watch TV to begin with, so for me to write about something I watched on TV is kind of huge, but I digress. So anyway, Kathy is an _AWESOME_ comedian, and I love her sense of humor (Kathy, if you’re reading this, may I get a ticket to your next show? :p) So it was odd to me, when I saw her fretting over some show she had to do at some big name show place in New York.

She put the pressure on her self, and clearly held herself to a very high standard. She said, “I don’t want anyone leaving the theater without having a good time”. Sometimes I feel that way, creating unnecessary pressure on myself, which is interestingly counter-intuitive, because it just screws me up even more.

Anyway, in that show, she then said, “.. at times like these, I can almost hear Oprah [Winfrey]’s advice”. Oprah said, “Kathy, the audience didn’t come to the show to hear something anybody could have said on the street. They came to hear something only Kathy Griffin would say.” I made a mental note to remember that and write about it after my hockey class, I should get some points for the extra effort, but I digress again.

Hmm.. I don’t know much about producing comedy shows (and by that I meant, totally clueless), but what Oprah said was interesting to me and I then thought about how we judged a comedian. We measure a comedian by the quality of their jokes. And jokes, are somewhat like software. They’re not physical things you can touch and hold. They’re intellectual properties of their owners. Anyone can easily rip off someone else’s joke and call it theirs, just like pirates do with software. You can reuse software, but a told joke over and over by the same person is just worn out. We have IP laws designed to protect software owners, but last time I checked, you can’t patent a joke.

So comedians actually have it much harder than us software creating people! Anyway, I digress again. I’m thinking about the ways I can apply Oprah’s advice. For instance, this blog. It’s mine, and I think (I think, because I don’t have any solid data to back this up) that most people come here because they are interested in what I have to say. Odds are they didn’t come here to hear what anybody on the street could have said. Which is one of the reasons why I try not to re-hash the same shit that has been going around the Web. If someone suddenly discovered that the world is flat, we really don’t need every single blogger on the planet each writing a blog post that says “OMG, did you know the world is flat?”

This, (in my opinion anyway) is branding. You’re branding yourself. You’re differentiating yourself or your product, from everybody else. If you are doing what everyone is doing, then you’re just like everybody else. Points of differentiation is important, if you are going to compete in a free market — something I learned him my product management class taught by Rod Whitson, President of Townsend, Inc.

Besides, you have to be yourself to be happy. If you try to be somebody you’re not, for external reasons, and if you’re unhappy doing it, then you’ll be miserable (no shit). What’s the saying again, you can’t love another unless you first love yourself, because nobody will love you more than you yourself?

That’s right, Scott. I’m going to be myself, and write whatever I damn well please on this blog. Ha!

May

23

Piracy as a free form of marketing

Filed Under business, marketing, product management, things to ponder about | Leave a Comment

I just read this very informative article, I highly encourage those in the business of software to read. Perhaps the most interesting evidence that this works is the real world scenario summarized at the end of the article, where giving away the intellectual property did not cannibalize sales of the product, but instead help market if by creating buzz.

So what about free copies? How do you compete with free, to state the battle cry of the new Luddites who fear digital technology? It’s done all the time. One of the most dramatic recent instances of this was the strategy of science fiction writer Cory Doctorow who, over the course of three years, gave away 700,000 electronic copies of Down and Out in the Magic Kingdom. Sales of the hard copy went through six printings and surpassed his publisher’s expectations. Many of the downloaders, Doctorow said, did not buy the hard copy and probably would not have regardless, but the giveaway created considerable buzz and a significant minority did buy the hard copy.

I see so many forms of “piracy” today that aims to achieve the same thing, albeit through legitimate channels so it can’t be called piracy and doesn’t strike people as piracy. Many SaaS Web 2.0 companies offer a “free” version of their product, usually limited by a time period or crippled (missing a cool feature, etc.) with the goal of converting those prospects into paying subscribers. Paying customers are usually given access to an uncrippled version of the product with full fledged functionality and so forth.

Hmm .. giving away the product for free to entice people to pay for a better version .. giving away the product to create buzz .. hmm .. yeah. Sort of kind of like what the end result of piracy is. But legit.

This has got me to thinking about some of the open-source a.k.a. free software business models. Wow, what a disruptor. In certain respects, almost a form of legalized piracy, isn’t it? Not all, but some open-source software are basically knock-offs of a must-pay commercial software.

Knock-offs are pirated products. Because they are usually cheaper than the original, knock-offs tend to appeal to a more price-conscious segment of the market; that is, the buyers of pirated products are probably not legitimate prospects for the innovative new product, either because they cannot afford, or do not want to pay, the higher price. Message to the innovative marketer? Either drop the price of the new product or produce a cheaper version — or be the first to exploit a new technology.

Note: I am a proponent of the open-source software movement, I am not in anyway bashing the community–but in fact, applaud them for many of the successful technologies they have introduced, resulting in where we are today.

Update 6/3/2007: Salon has a piece comparing the success of AK-47’s and the QWERTY keyboard. Also mentions software piracy.

Despite all the whining that proprietary software companies do about “piracy,” the industry has long been aware that it’s not always such a bad thing to have everyone illicitly copying your products. Get everybody hooked, and then start selling the upgrades, or support services, or other nifty add-ons. For open-source software companies, the strategy is a fundamental plank of the basic business model.

May

6

Why word-of-mouth works in the Attention Economy

Filed Under marketing | 1 Comment

If you think about it, your attention does have a price to it. Not that you can make a decent living just by giving up your attention, but someone out there will pay for your attention. As Michael H. Goldhaber mentions in his article on Wired titled “Attention Shoppers!“:

By definition, economics is the study of how a society uses its scarce resources. And information is not scarce - especially on the Net, where it is not only abundant, but overflowing. We are drowning in information, yet constantly increasing our generation of it.

Because I was out of town last weekend, I’m just now getting around to read all the interesting articles I have bookmarked this weekend (a whole 7 days later). Not to mention, my to-do list also has “Read Monday’s bookmarks” and “Read Friday’s bookmarks” on it. Information overload? I think so.

One of the things I bookmarked last weekend was Ross Mayfield’s blog post titled “Power Law of Participation“. In it he mentions,

We network not only to connect, but leverage the social network as a filter to fend off information overload.

How true is that to you? I never really thought of it as an information “filter” before, but in essence it is. I lament to my buddy how I can’t think of a decent restaurant for a blind date. He then tells me his wonderful experience at this one restaurant downtown San Diego. Since I believe him (he is my buddy), I end up going to that restaurant downtown San Diego.

What I have just done here is completely ignore all the restaurant ads I have seen on TV, newspaper, billboards, and the radio. Too many ads, all claiming to be the best, who am I to believe? Word-of-mouth trumps them all.

I read a post by Kathy Sierra, liked the picture below so much I printed it and stuck it on my whiteboard at work:

http://headrush.typepad.com/creating_passionate_users/2006/04/the_myth_of_kee.html

.. and now, back to my reading.

May

3

Architecture of brands - Introduction

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Did you know that the same company that makes Clorox (the bleach) also makes Hidden Valley Ranch (yes, the salad dressing)? Boy what a marketing nightmare that would be more people knew that. Bleach flavored salad dressing? Yummy!

I’m learning more about branding every day. At the moment, I’m studying a paper written by David A. Aaker and Erich Joachimsthaler titled “The Brand Relationship Spectrum: The Key To The Brand Architecture Challenge“, California Management Review Vol 42, No. 4 Summer 2000. Awesome paper, definitely a recommended read.

What can I say, the only architecture I am familliar with is software architecture. The other architecture that I have heard of, is the kind of architecture where you need an architect to design your house, figure out the dimensions, where to place the doors, windows, etc. But brand architecture? There’s a first time for everything.

Essentially, you have to figure out how brands interact with each other. Among other neat stuff, one brand can break, make, cannibalize, or have no effect on another brand. According to the Aacker and Joachimsthaler, the Brand Relationship Spectrum consists of 4 basic strategies which in turn branches into 9 substrategies.

Strategy #1: House of Brands

  1. Not Connected - RCA (GE), Saturn (GM)
  2. Shadow Endorser - Tide (Procter & Gamble), Lexus (Toyota)

Strategy #2: Endorsed Brands

  1. Token Endorsement - Universal Pictures, a Sony Company
  2. Linked Name - McMuffin (implies it is a McDonald’s product), Nestea (implies its a Nestle product)
  3. Strong Endorsement - Courtyard by Marriott (Courtyard’s value proposition is credible)

Strategy #3: Subbrands

  1. Co-Drivers - Gillette Mach 3 (Both Gillette and Mach 3 are strong brands in their own respect)
  2. Master Brand as Driver - Dell Dimension (Dell is the brand, not Dimension)

Strategy #4: Branded House

  1. Different Identity - GE Capital, GE Appliance (same brand, different context)
  2. Same Identity - Virgin (umbrella corporation with many products)

These is only a high level overview, too much to summarize in one post so I’ll break this up into a few posts (also partly because I don’t have the time to write everything up front now). Stay tuned!