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

Jul

3

Hidden flaws in strategy (part un)

Filed Under business, entrepreneurship, product management, self improvement, strategy, things to remind myself, winds of change | Leave a Comment

The McKinsey Quarterly has an interesting piece titled “Hidden Flaws in Strategy”, authored by Charles Roxburgh. What I like about this article is that it forces one to think about your blind spot, and provide solutions on how to overcome your own bias. A blind spot is well, very self-explanatory, which is why I think that’s just all the more reason why people, especially those who do any kind of strategy, should read this well put together article.

I’ll sum up some of the key takeaways to me, but reading the original piece of McKinsey is highly recommended.

Here are the common strategy flaws.

Flaw 1: Overconfidence

Our brains are naturally wired to make us overconfidence. This can be a good thing, because otherwise no one in their right mind would want to launch a new startup. However, we hurt ourselves when we try to make accurate estimates. Given a test question like “How heavy is a fully laden 747?” where participants are asked to give an answer where they were 90% confident, most people would rather be precisely wrong than be vaguely right.

Lesson learned: Be skeptical of strategies premised on certainty, and (duh) give yourself some wiggle room.

Flaw 2: Mental Accounting

Richard Thaler, a theorist in behavioural finance named the concept of mental accounting, defined as “the inclination to categorize and treat money differently depending on where it comes from, where it is kept, and how it is spent.” Some examples of mental accounting in the boardroom:

  • imposing caps on core business while throwing money at a startup
  • writing off money spent with conveniently created categories such as “revenue-investment spend” or “strategic investment”

Lesson learned: Don’t be so quick to throw away “so what if we throw it away” money. Eval potential investment through the standard scrutiny process, regardless of how the money fell into your lap.

Flaw 3: Status quo bias

An experiment conducted by Samuelson and Zeckhauser discovered that when students were asked how they would invest a hypothetical inheritance of millions of dollars, they adopted a “let’s leave things where they are” approach. That is, if the inheritance was already in high-risk high-yield stocks, it would be left as is. If the inheritence was already in low-risk low-return bonds, it would also be left as is. They opted not to rebalance the allocation in this hypothetical portfolio, even if it wasn’t in accordance to their risk preference.

The explanation is that people are more concerned about the fear of loss more than they are excited by the prospect of getting more. That’s the status quo. That’s what makes entrepreneurs special–they are not the status quo.

The other explanation is the endowment bias. Thaler discovered in an experiment with Cornell students that they wouldn’t pay more than $2.75 for mug with a Cornell imprint, but if they were given one, they wouldn’t sell the same mug away for less than $5.25–did the free market suddenly decide that the same mug has more value when it was already in someone’s possession when the same mug (a brand new one available for purchase) would be worth less? I think not.

While conservatism can be a strategic asset, it is important to distinguish between a status-quo option that is genuinely the right thing to do vs. one that just “feels safe” because of our innate bias.
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Jun

3

Real-time stock quotes at rock bottom prices

Filed Under marketing, product management | Leave a Comment

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.

May

26

Incremental improvements .. meh

Filed Under entrepreneurship, innovation, product management, startup, things to remind myself | Leave a Comment

As far as innovation goes, I prefer major disruptive innovations over incremental improvements (not to say the latter does not have it place, it does). As a keen observer of human behavior, I’m interested in understanding in general why people do they things they do, with a focus on human interaction with technology–such as factors that affect the adoption rates of new technology.

I long discovered (the painful way) during my time as an academic in computer science that just because one builds something super well, that by no means guarantee that “they will come”. In fact, my favourite quote then became, “So what if it doesn’t do anything? It was made with our new Triple Shielded Core Blowfish Encrypted Reduced Internal Resistance 26 Level On-Die Cache 512 1024bit Registers Supercharged Iso Bifurcated Krypton Gate Metal Oxide Semiconductor process …” (souped up version from something similar I read from a UNIX fortune cookie, but I digress).

Thus, I found this blog post by Andrew McAfee, a HBS faculty to be quite interesting. I’m going to summarize the key takeaways, although I highly recommend you read the original post.

Changing the status quo is extremely difficult and often leaders get “carried out on their shields” (from an awesome and inspiring Carly Fiorina talk about change and leadership at Stanford, that I’ve quoted her before here). Let’s examine one of the traits of the status quo:

We are loss averse. A $50 loss looms larger than a $50 gain. Loss aversion is virtually universal across people and contexts, and is not much affected by how much wealth one already has. Ample research has demonstrated that people find that a prospective loss of $x is about two to three times as painful as a prospective gain of $x is pleasurable.

A bird in hand is worth two in the bush. Makes sense, it takes a non-status quo person with a vision or be hungry enough to be prepared to lose $50 for the upshot of potentially gaining another $50. The willingness to feel fear and keep going forward distinguishes the living from the merely breathing :)

.. behavioral economist Richard Thaler has called the “endowment effect:” We value items in our possession more than prospective items that could be in our possession, especially if the prospective item is a proposed substitute.

If you’re introducing a mere replacement of an equal product, it’d better be .. uhh, just realize that you’re fighting an uphill against change. Make sure you have incentives for people to change.

As if all this weren’t enough, Gourville also highlights that the people developing new products are very dissimilar from the products’ prospective consumers. You don’t go work for TiVo (to use his example) if you don’t ‘get’ the potential of digital video recorders and think they’re a really good idea. And after working for the company for a while, having TiVo becomes part of your endowment; you think of things in comparison to TiVo, instead of in comparison to a VCR. Both of these factors make it harder for developers to see things as their target customers do.

Many techies suffer from this, falling in love with their own creation and failing to see that it could perhaps actually be fundamentally, how should I put this gently, a completely useless product. If it’s not solving a real person’s pain point that he/she is willing to pay for a solution, then monetization may be a challenge. Doesn’t matter how snappy the UI is, or the fact that you’ve just spent a month shaving off 10 CPU cycles on the algorithm that calculates the number of molecules in a can of soda, I highly doubt anyone would pay you to compute out the exact number of modules in a can of Mountain Dew just before they pop the can. I’m sure the algorithm is still very cool, though!

There are three classes of people: those who see, those who see when they are shown, those who do not see
–Leonardo da Vinci

As an innovator, train yourself to see the things that you cannot see. Ok, so that’s admittedly difficult, so at least try to see the things that other people see that you don’t see.

This last point is one of the reasons why I strongly believe that techies should actually get out there (at least occasionally) to go talk to real human beings, such as the paying customers. Be aware of your own inherent bias and need to protect your “baby” (the product), but don’t forget that you are also creating value for someone else.

The bottom line is: if you’re developing something new, you’ll have an easier time if the benefits of the product surpasses the existing solution by (at least) a factor of 10.

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

18

The best thing I read today

Filed Under career, failure, fear, passion, perseverance, product management, quotes, self improvement, things to ponder about, things to remind myself, values | Leave a Comment

Question: Describe your job in one sentence.
Answer: The art of prospering between a rock and a hard place.

That reminds me of a quote:

There are really only two ways to approach life - as victim or as gallant fighter - and you must decide if you want to act or react, deal your own cards or play with a stacked deck. And if you don’t decide which way to play with life, it always plays with you.
– Merle Shain

Which reminds of awesome book I read titled “The Pathfinder” by Nicholas Lore–which I highly recommend. (Thanks for the recommendation, Becks!)

You can at any moment, take flight on new wings into an unprecedented life making a choice for vitality, for living fully, for LIFE spelled in capital letters. It is, however, an expensive journey. You pay by giving up the familiar, comfortable, everyday ways of living and thinking that are the wages and rewards of going with the flow of your programming.

The willingness to feel fear and keep going forward distinguishes the living from the merely breathing. In fact, it is not just the so-called negative emotions that are uncomfortable. When you choose to live fully, your palate of experiences, thoughts, emotions, and possibilities expands. This leads you onto new ground in other areas of your life as well. And, folks, all that newness swirling around just ain’t comfortable.

The question is not whether to take risks, but which ones to take. The peril of being reasonable is that you will miss all the fun. It’s not enough to cautiously edge your way towards the cliff. Learn to revel in taking risks for the sake of your soul. Every choice you make gives birth instantly to certain risks as surely as your shadow follows you.

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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.
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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

28

Unbundling production from delivery can change the world

Filed Under business, changing the world, did you know, innovation, mobile, product management | Leave a Comment

From this article from the McKinsey Quarterly,

Technology helps companies to utilize fixed assets more efficiently by disaggregating monolithic systems into reusable components, measuring and metering the use of each, and billing for that use in ever-smaller increments cost effectively. Amazon.com, for example, has expanded its business model to let other retailers use its logistics and distribution services. It also gives independent software developers opportunities to buy processing power on its IT infrastructure so that they don’t have to buy their own.

Interesting, but that (Amazon Web Services) seem like an obvious application since IT assets are consumed remotely/virtually, i.e. one isn’t actually physical interacting with it. Does unbundling apply outside of the virtual world too?

Unbundling works in the physical world too. Today you can buy fractional time on a jet, in a high-end sports car, or even for designer handbags. Unbundling is attractive from the supply side because it lets asset-intensive businesses—factories, warehouses, truck fleets, office buildings, data centers, networks, and so on—raise their utilization rates and therefore their returns on invested capital. On the demand side, unbundling offers access to resources and assets that might otherwise require a large fixed investment or significant scale to achieve competitive marginal costs. For companies and entrepreneurs seeking capacity (or variable additional capacity), unbundling makes it possible to gain access to assets quickly, to scale up businesses yet keep their balance sheets asset light, and to use attractive consumption and contracting models that are easier on their income statements.

Read more

Jan

27

Early adopters & the mainstream users

Filed Under marketing, product management | Leave a Comment

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!

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.

Oct

15

Discourage politics, use data

Filed Under google, product management, project management | Leave a Comment

BusinessWeek has this excellent article about how Google (more specifically Marissa Mayer) runs meetings. What stood out to me the most is #5: Discourage politics, use data

This idea can and should apply to meetings in organizations in which people feel as though the boss will give the green light to a design created by the person he or she likes the best, showing favoritism for the individual instead of the idea.

Mayer believes this mindset can demoralize employees, so she goes out of her way to make the approval process a science. Google chooses designs on a clearly defined set of metrics and how well they perform against those metrics. Designs are chosen based on merit and evidence, not personal relationships.

Mayer discourages using the phrase “I like” in design meetings, such as “I like the way the screen looks.” Instead, she encourages such comments as “The experimentation on the site shows that his design performed 10% better.” This works for Google, because it builds a culture driven by customer feedback data, not the internal politics that pervade so many of today’s corporations.

Well said. Too many times have I seen favouritism/politics trump true merit, inconvenient hard-facts that are just “shrugged” off (and left at that). Or just be given some lame excuse (so shoddy and shady that it wouldn’t stand fact-based scrutiny) of why the idea “wouldn’t fly”.

By definition, sheer hard work and determination won’t help since merit isn’t appreciated. The solution? Cut your losses and get the hell out.

Jun

25

Change Management

Filed Under business, product management, self improvement | Leave a Comment

Gerry Riskin, in his article entitled “The Seven Immutable Laws of Change Management” does bring up some thought-provoking and valid points:

In summary, these are the 7 laws:

  1. Propose imperfect change initiatives. The point here is that in life, the outcome of an initiative is not always guaranteed, e.g. you won’t know the outcome of the initiative until you have actually executed it. Therefore, you won’t know what the “right thing to do” is except in hindsight — and hindsight is too late.
  2. Create a vivid picture of where the initiative leads. The appeal of being vague is that you are not committing to anything — which means that you can’t be held accountable for any outcome, cleverly avoiding scrutiny and criticism. However, that also means that it’s tough to get people to support your idea, because they just can’t picture it.
  3. Paint the “first step” in vivid colours. Get the ball rolling! Define what the first step is (define action items), and decide what the outcome of the first step should be for the first action to be considered complete.
  4. Create cult-like internal promotional communications. “Selling” internally within the company. Advocate to others why the initiative will benefit the company.
  5. Ask for commitment — not agreement. “Commitment and Doubt“: Commitment does not require the absence of doubt; often commitment means acting despite your doubt. This is the “leap-of-faith” component, if you will. e.g. My company’s CEO has more experience in being a CEO than me, therefore I will execute the tasks I am assigned, doubt or not, because I have committed to the CEO’s initiative.
  6. Tell the world. Why do couples say their vows in front of friends and family? To let the world know about their commitment (and to be held accountable).
  7. Turn a spotlight on your initiative and leave it on. Often as a side effect of time and absence of any visible accomplishments, people forget about what the initiative was about, or worse, naysayers begin an “I told you so” compaign. The solution to this is to constantly monitor for progress, find out what others are struggling with and help them move ahead (including delegating tasks), and sharing problem solving knowledge within the company, so that nobody has to reinvent the wheel.

Here’s an interesting analogy from Law #1 –

As a result, most good firms are paralyzed by the tedious, never-ending and totally ineffectual process of divining the perfect strategy accompanied by the perfect tactics. These firms are ships tied so firmly to the pier that no matter how well steered, they go absolutely nowhere. In fact, their biggest claim to fame is that they hit no icebergs — few ships do from the pier. Such firms may do “industry-average” well, but they are not going to consistently break out of the pack.

The question is, are you happy with being “just OK”? I know I’m not. “Just OK” is just not enough for me.

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!