Product Marketing

Growth Hacking and the Philosopher’s Stone

Growth HackingThe search for the philosopher’s stone has confounded some of the world’s brightest minds for centuries. Alchemists, from as far back as the 8th-century, have longed for the day when they would be able to mix the right ingredients, in the right way, to create a stone that would not only turn commonplace metals into gold but would render its owner immortal.

Just like the alchemists of the past, today’s marketers are constantly on the hunt for a recipe of tactics that, when combined in the right order, will create a whirlwind of viral growth that accelerates revenue and generates eternal success.

This idea of using low-cost tactics to achieve expectation-shattering revenue is frequently known as “growth hacking.” It’s a buzz phrase that will light up a CMO’s eyes. But, while it is easy to understand why a company wants to integrate growth hacking techniques, few leaders truly know exactly what recipe will achieve alchemic-level results.

Because, unlike the practice of alchemy, which predicted that any person could be victorious by using the same recipe, successful growth hacking is distinctly unique to each and every organization. It can rarely be achieved by reusing the exact formula of another.

So, if there is no universal recipe for achieving viral growth, where do you start in the hunt for revenue gold and organizational immortality?

Download the rest of the ‘Growth Hacking and the Philosopher’s Stone’ whitepaper to learn how you can successfully craft and implement growth hacking campaigns into your digital strategy.

Growth Hacking Cover

Jobs to be Done? It's All About Substitutes

img.phpWhen thinking about who your real competition is, it is helpful to step back and think broadly about all the different ways that the problem you're addressing can be solved. Clay Christensen and his disciples have come up with a framework - Jobs to be Done - and are trying to create a movement around this concept to help understand the competitive environment and how to refine products. They've even created their own hashtag - #JTBD - on Twitter to engage others in the conversation. But is it really that new?

To me, this is just a reformulation of the economics concept of a substitute (let's skip the math for now). The challenge for people in technology is that they tend to consider only perfect substitutes - competition that looks, smells and tastes like them - instead of stepping back and considering gross (or net) substitutes. To me, that's all this "jobs to be done" stuff is about - what are other ways that people are going about solving their problems?

A good example of this is when I was at a client discussing the merit of spending marketing dollars to promote a marquee feature of a product - photo sharing - that no one was using. When I asked the product manager who the competition was for this feature, he immediately started listing all the products in their space - little black boxes that were networked-enabled and had storage options.

The real answer was Facebook and Instagram (and now Google, Apple and Dropbox, among others). The product manager didn't step back to understand what are the real alternatives (the substitutes) for the act of storing and sharing photos with others rather than just other consumer electronics that have some photo sharing capabilities (or not).

No amount of "marketing" to promote this feature would have helped. Consumers already left this feature behind, which is why there was no adoption.

So, as a product manager, it is important to understand not only what a feature does, but also why it should exist and how it solves a problem in a way that's better than what they do today in general. Step out of your own space and look around. And if you need the #JTBD framework to help you, that's fine. You should be thinking that way anyway.

The Middle - A Followup

Speaking of being in the middle, check out Ben Thompson's post Twitter and What Might Have Been on his Stratechery blog. Money shot:

This was the context for the aforementioned post: advertising works best at scale but 3rd-party apps were peeling away too much of Twitter’s audience. That is why the company made such a big mistake: they didn’t kill 3rd-party apps completely. (my emphasis)

...

The funny/sad thing about this entire episode is that Twitter was clearly trying to bend over backwards for its 3rd-party developers: it was strategically stupid and financially unwise to let them continue to exist, but Twitter left this massive loophole open that limited growth but didn’t kill successful apps like Twitterrific or Tweetbot. And yet, the company was pilloried and tarred with a reputation for being especially unfriendly to developers, a reputation that strongly persists to this day.

Twitter clearly had a strategic direction they wanted to follow, yet muddled it up by still allowing some access to third-party apps.

Twitter got caught in the middle.

By the way, if you aren't a regular reader of Stratechery, you should be - it's chock full of insightful analysis and strategic thinking. I also subscribe to his Daily Update, and it's worth the investment.

The Middle (Where You Don't Want to Be)

3stooges One of the things they drill into you when studying strategy is never to be in the middle. The canonical example is the trade-off between being low-cost vs. high value / differentiated. If you are neither low-cost nor high value, you can't compete on price, nor can you deliver high enough value to customers to sell at a premium price. Samsung is a timely example of a company with a product line caught in this kind of squeeze – its smartphones are not inexpensive enough to compete with the multitude of cheap Android devices, yet not delivering the complete experience that Apple does at the high end.

Beyond the classic analysis, I find evaluating whether or not being in the middle of two strong positions to be a useful construct in general. You can see it in professional sports (h/t:Paul Sytsma), where some teams actively tank — hello Sixers fans! — to get the top draft picks to build championship teams, while other teams maintain mediocrity.

An illuminating example is the fate that befell Compaq when it was trying to compete with the Dell in the late 90's. Compaq, for those who aren't old enough to remember, had a very strong and successful channel model. Its supply chain was specifically designed for this type of model. Dell, with its direct model, leveraged the web to create a configurator that approximated mass customization. Dell's go-to-market took the PC world by storm, and grew quickly, jeopardizing Compaq's leadership in PCs.

How did Compaq react? By trying to add this direct-to-market model while maintaining its channel. I am aware of a number of consulting firms that were engaged in the late 90s to try to figure out how to implement some flexibility in Compaq's supply chain to address both conflicting approaches. As you can see from the results (a merger with HP, which is now being spun out into its own company), it was not a successful endeavor.

It wasn't just the supply chain, it was the business model and go-to-market itself. Compaq was unwilling to commit fully to the new world, which would upset its channel. The end result was a muddled mess, where it couldn't compete effectively with Dell online, yet its legacy partners were still upset.

Compaq was caught in the middle.

Being in the middle can seem to be a good approach for two-sided marketplaces. After all, they act as the hub and facilitator for transactions between two independent parties. That great... except for the part where it's too easy for the two parties take their transactions and interactions off-line. Once the parties meet, there is nothing to stop future transactions from happening outside the marketplace.

Consequently, those marketplaces started building up capabilities to become more sticky. But where do you start? The first is identifying who is your real customer. Is it the buyer or the seller? Consumer destination sites like eBay and Amazon Marketplace chose the sellers as their real customers - spending a lot of money and effort to create tools to make it easy to onboard sellers, create offers and manage their businesses.

Business marketplaces took the other approach - for example, the Ariba Commerce Supplier Network came bundled with Ariba's procurement solutions. They focused on big buyers where they had leverage to bring their own suppliers on the network. However, in the past few years, Ariba, now a part of SAP and calling its marketplace the "Business Commerce Network," has been trying to have it both ways - not only still selling buy-side solutions, but also jacking up supplier fees. Needless to say, this approach has been causing some consternation with the suppliers on the network.

Can Ariba/SAP have it both ways? It remains to be seen, but I'm doubtful.

So, how do you know if your product or company could be caught in the middle? What is really helpful is thinking about the tradeoffs you have to make for your products, operations and/or marketing. If a decision you make puts you in a place that does not satisfies any of the desired strategies or requirements — where one action that supports one requirement would be detrimental to another, or makes things more confusing — it is definitely worth stepping back to see if you are putting you, your company or your product in the undesirable middle.

In the end, trying not to be in the middle is all about having strategic clarity and focus. It's the business version of "you can't make everyone happy, so stop trying…."

Five Ways to Market Your Tech When You're the Underdog

We were recently challenged by a client to re-position a mature product, a table-stakes part of a suite of B2B services.  The company’s sales and marketing teams believed the product was falling (or had fallen) behind the competition. Great development plans were in the works, but with delays and shifts, it didn’t appear there’d be much new to talk about in the coming six to nine months. That got our team to talking.  What’s the best way to market a technology when you know you’re the underdog in the marketplace? We shortlisted five of our favorite ideas, all of which we’ve tested with success in the course of our marketing careers.

1. Confirm, don’t assume. If you suspect you’re behind, confirm it with customers and prospects before you believe it as truth. Avoid the inferiority complex trap that can be very common, especially among weary and overwhelmed sales forces. Even when your product is terrific, sometimes all it takes is one competitor trumpeting boldly about their newest bell or whistle—however strategically unimportant it may be—to put your marketing and sales teams on the defensive. A non-confrontational way to learn what your customers and prospects truly think is to ask them these four simple questions when you talk to them next:

  • What are the features/functionalities of your current solution that you couldn’t live without?
  • What is your favorite feature/functionality of your current solution?
  • If you could change one thing about your current solution, what would it be?
  • Knowing what you know about our solution, would you recommend it today to a colleague?

These questions will give you insight into not just how you’re perceived, but also why people might think you’re behind, and what they most value in a solution.  If you find you are in fact competitive, a dose of sales training about your product’s strengths and differentiators could go a long way.

2. Change the product, or change the target market. It’s a beautiful thing about human beings: We don’t all want or need the same things.  What is “must-have” to one customer may be overkill to another. If you’ve confirmed your product has fallen behind in the eyes of your target market, then it’s time to change the product – or change the target. First, identify your product’s strengths. Perhaps it’s the price leader. Perhaps its differentiated by strong personal service and relationships.  Perhaps its more customizable. Then look at a gap analysis of what you’d have to build to re-emerge as a fierce competitor, and where.

  • Can you build a strong business case to invest in changing the product to close the gap and compete for your existing target market?
  • Is it more effective to shift target markets?  Consider if there is a different market segment that might rank your product highest based on your particiular strengths, at the product and company level.

Screen Shot 2014-05-06 at 4.28.44 PM3. Forecast your strategy to customers—boldly, rationally and transparently.  Develop a crisp point of view about what must be true about solutions in the future to meet your target market’s needs.  Then find ways to elevate the conversation to that strategic point of view, and to your intention to make all those things true.  Also, show them, don’t just tell them, what the future state might look like. If you have a concept in development that’s a year or less out, consider investing at least a small amount in conceptual user experience mockups or other visualizations. (Frankly, these could double as an aligning force for your development and product teams.) If something is more than a year out, conceptual artwork and thought leadership pieces, such as white papers, might do the trick. WARNING: Don’t be irrationally exuberant! If you promise something at a specific time, and you don’t deliver, you’ll do more to harm your credibility than any marketing may be able to repair.

4. Focus on your strengths.  Sometimes, it doesn’t hurt to acknowledge that your company is not all things to all people, and that your product cannot immediately be made to do all things.  Own up to your shortcomings when challenged by a customer. Then emphasize what does differentiate you—either with the product or with the way you deliver it: your people, your service, your processes, your accuracy, your consistency, your price, your geographic scope, whatever it may be.   Talk about your priorities, and discuss how they serve your customer’s needs best.

5. Play the Co-Opetition game. Ready to get really strategic and brainy about this?  Check out the classic ideas behind Co-Opetition, the game theory approach that Adam Brandenburger and Barry Nalebuff (of Harvard and Yale respectively) brought to the market in the mid 1990s.  You can shape the game, not just play the game, by using what they call the PARTS framework, which is explained pretty succinctly here.  This one takes some study and discipline, but it’s a great holistic exercise that could help align your executive team on the strategic priorities in front of you.

Secret Number 2 to Branding Technology

I talked about the first secret to building a technology brand, aspiration, in my post last week.  I described aspiration as the emotional hook to get your target customers on the line.  The aspiration of your brand is indeed critical, but if you don’t follow it by delivering something meaningful, your customers will drop you like a hot potato.  Deliver something meaningful: sounds easy enough.  But how do you know that a new technology is meaningful?  And more importantly, how do you make sure it stays that way, so you can keep selling your stuff?

The more addictive a product is, the more meaningful it is.  Think of the addictive qualities of your smart phone, your Fitbit, your Facebook account, your Twitter feed, your Netflix views, your Pandora station, your favorite apps.  There’s something inside these products that makes you continue to come back to them and want more.  They are sticky.

Screen Shot 2014-02-11 at 5.53.49 PMAnd that’s the second secret to branding technology: stickiness in the product.  Stickiness is a quality that, for customers, is simply too good to miss and too good to keep to oneself.  And if the stickiness produces the “network effect,” all the better.  It is stickiness that enables a product to go viral.

Don’t think this applies just to consumer products. B2B technologies need to be sticky as well, perhaps now more than ever.  In this BYOD world, you are selling your stuff to people, whether they are wearing an employee hat at the time or not. Products that are clumsy to use, don’t deliver value and create drudgery aren’t long for the B2B world.  They will be supplanted or disrupted by products that are easy and cool to use. If they aren't sticky, they'll be replaced by products that are.

viralHow do you get stickiness in a product? Sometimes (but rarely), it’s luck.  But it should be strategy.  In fact, it’s your job to make it sticky.  Of course you need to be able to identify the appropriate market, describe the product in the most compelling way, figure out how to go to market appropriately and then create some awareness.  Of course you need to connect your brand to the aspiration I talked about in my last post. But before you do that, you should be deeply engaged in the product itself, and build it on a complete understanding of the market and the target customer.  As a marketer or an executive, your job isn’t just to take the product from engineering, give it a good tagline, and then talk it up in the press.   Your job is to make the product sticky.  And to make it sticky, you have to know what the “main addiction” is and test and refine it until you get it right.  If you haven’t read The Lean Start-Up, it’s time to do so.

Here are ten questions you can ask yourself to check the stickiness of your product. 

  1. What is the main addiction?
  2. What is its addiction potential? Have you tested it?
  3. Is it ridiculously easy to use?
  4. Is the design or UI elegant and attractive?
  5. Does it align with a current trend?
  6. Does it continue to deliver more and more over time?
  7. Is it affordable?
  8. Does it create pride of association?
  9. Can it be easily shared with others?
  10. Does it produce a network effect?

If you know the main addiction of your product and understand that potential, and if you can also answer each of the remaining eight questions with a “yes,” knowing why you’ve answered that way, you are well on your way to having a sticky product and going viral.  Not so hard at all. Certainly worthy of aspiration.

The first of two secrets to branding technology

Spending three decades in marketing at the epicenter of technology has taught me a thing or two about how we think here in Silicon Valley and what makes us who we are.  "Innovate or die," as the saying goes.  But recently, I reached a new understanding, and figured out the two secrets to branding this stuff.  By “branding” I mean establishing an innovation in the marketplace and building a brand.  Which, of course, is the goal. Today, I'll share the first of those two secrets. But first a little background. We celebrate our engineers here in the Land of Innovation, but when these guys release their version or product or app or device, it’s the marketers who have to get traction with customers.  So how do you do that?

Screen Shot 2014-01-27 at 11.39.09 AMI think it’s important to recognize, first off, that technology people are different.  We like to try new things.  We embrace change. We participate in crowd-funding of projects and companies.  We early-adopt new devices.  And we have patience with failure, our own as well as others, their companies and their products.

Secondly, we must understand that a customer buying a technology product early in its lifecycle is a “technology person.”  Ok, she probably isn’t an engineer, or a technologist or a rocket scientist.  But you can bet if she’s laying out cold hard cash (or mobile payment of choice) for a product that is touting something new, she “gets it.”  She gets that she’s part of a grand experiment, a Beta tester of sorts, a guinea pig.  And she likes it that way. Being the first to try a new product, to show it off to your co-workers, to brag about waiting in line to get it is all cool.  If you’re a technology person.  In fact, it is so cool that it actually confers admission for you into a sort of virtual “club” for innovators.  And of course, if you’re in the club, the people with whom you hang are likely to be in the club as well so they will also think it’s cool.  Word of mouth ensues—the Holy Grail for technology products.

So, if you’re on the selling side of a new technology, it stands to reason that you will want to sell your widget to other members of the innovators club who will think it’s cool because it’s new, who will be patient with its functionality and who will tell their friends about it.

As a marketer, you’re going to want to capitalize on the natural order of things in this situation.   You’re going to want to get people to try your product and you’re going to want to create word of mouth among other technology people.  Because if you amass a circle of innovators who love your product and tell their friends about it, you will create a bigger circle of early adopters, and if you’re lucky and the product is sticky enough, the word of mouth you generate among early adopters will spread beyond technology people, outside the innovators club and into the real world.  At this point, you’re reaching what we marketers call the early majority, or the mass market.  Success!

But the question is always this.  How do I get members of the innovators club to pay attention to my new technology?  What makes it cool?

Here’s the first secret.  Aspiration. 

MatterhornThe reason innovators and early adopters are attracted to some products and services that are untested in the market is because in some way, they establish an emotional connection with the buyer, one that usually offers the promise of positive change.  The buyer believes that the product or service will change her life in some way and quite possibly the lives of others as well.  Remember, technology people embrace change.  That’s where the aspiration comes in.  If you build a brand that reaches out enough to be aspirational in nature, that promises to change the world in some way, you stand a better chance of attracting innovators and early adopters to it.  And of course if you are successful in attracting innovators and early adopters, you are more likely to make it to the early majority.

Oh, and one more thing.  Technologists innovate to change the world.  They think in terms of vision.  How will the world be different because I was here?  How will my product or service change the way people do things?  The way the world operates?  So if you’re a marketer trying to help a company get its innovation to market, remember that you’re not only selling to innovators and early adopters out there in the marketplace, you’re selling your marketing strategies to the very same kind of technology people you are trying to reach in the real world.  If you start with an aspiration, a goal of changing the world in some way, you will connect with your engineers as well as your target customers and set the stage for building a technology brand.

In my next post, I'll explain the second secret to branding technology. Stay tuned!

Three Critical Focal Points for Your Growth Strategy

For the most recent McKinsey Quarterly, the firm produced a video in which two of its experts discuss the evolution of strategy in business. The video echos so much of what we advise our clients -- growing companies -- as we help them develop, adjust, and align their teams around their ideal strategies.  Here are three of the points we firmly believe that were backed up by comments in the video.  All three are critical focal points entrepreneurs and leaders should attend to when it comes to strategy: 1.  Market selection and targeting has the lion's share of impact on your growth. A direct quote from the video: "80% of growth is explained by decisions about where to compete or by market selection."  You must begin your growth strategy with a realistic assessment of how you make money, what problems you solve, for whom -- and on that last bit, even more specifically, for which segment(s) of the market.  Doing so well requires considering marketplace trends, competitive forces, your product's fit with market segment needs, and your company's very DNA.  Get this wrong and you might experience incremental growth, but not cross the chasm.

2. Positioning of your company and product is critical, and should precede and guide decisions on brand, product development,  marketing plans, pricing, and even hiring. To quote the video: "Companies should be just as focused [on] positional improvement as they are on performance improvement .... [it is] fundamentally about positioning the company against the right trends, catching the right waves, and putting our bets on the right markets."  SeriesC defines positioning as the articulation of strategy, inseparable from it.   When our clients ask us to help them with positioning, we approach it not as a creative exercise, but as a scientific and fact-driven one.

3. When a strategy fails, leaders might be inclined to fault the strategy.  In the vast majority of cases, however, the strategy itself is not to blame; it's the execution that went wrong.  We often encourage clients who are facing failed strategies to assess how well or poorly they executed the strategy in four categories: Processes, Culture, Product, and Tools/Information.  So frequently, this analysis unearths breakdowns in multiple places within multiple categories.  A quote from the McKinsey video hit on one of those categories, culture: "Strategy’s not just about what’s on paper, but about the thinking and feeling processes of the leaders of the company."  In other words, strategy will go nowhere if the leadership who must execute it are not aligned to it and psychologically prepared to embrace and support it.

Do you have a question about your strategy, or how to bring focus to its development? Leave us a comment or contact our consultant team.

The Forgotten Marketing Basics

Elia Freedman has an interesting little rant, The App Store Problem Is Not Price, which has elicited a response by Loren Brichter in the comments and by Marco Arment here. In my experience, if you have to have people try your product to understand the differentiation from competing products, your positioning (and therefore your marketing) isn't fully baked. Or your differentiation doesn't matter to your potential customers.

That being said, it is a reminder of thinking through all aspects of marketing, especially if you plan on making your app available on a crowded place like the App Store or Google Play.

Let's use the old 4P's framework here.  Sure, Apple has locked down Place, but that just makes for an even playing field. It is what it is. Given Apple's inscrutable nature, to count on future changes in the App Store is irrational. As a former sales colleague still likes to say: "hope is not a strategy!"

The real question you should be asking yourself is what you doing with the other 3P's? Elia mention changing Product (differentiation) and perhaps changing Pricing, but then goes off and complains about Loren Brichter and Marco Arment (yes, I'd say that calling what Marco has an "echo chamber" is a bit pejorative), which is more about Promotion.

I'd say yes to all of the above. Don't count on the App Store to change - make your product truly differentiated (and that doesn't mean just layering on "cool," but useless features) and do proper promotion. Marco has invested a lot of time and energy in his blog and podcasts, which, by the way, are forms of promotion.

Yes, it's all about taking care of your marketing basics. By not addressing your Product, Promotion and Place, your Price will indeed suffer.

Why In-Company Incubators Aren't Working… Yet (Part 3)

239px-Brown_Leghorn_rooster_in_Australia This is part 3 of a 3-part series.  <<Part 1      <Part 2

In this three-part series, I'm addressing the topic of why in-house incubators don't necessarily work, and specifically answering the question about whether organizations should entrust innovation to their entire organization or just to an elite team, incubator style.  The answer is, it depends on where your organization is in the three-part innovation process.

In my first post I explained this concept, and covered the first phase, Ideation.  A few days ago I covered the second phase, Validation.  Today, I'll tackle the one that seems to be most comfortable for enterprises and startups, and yet also the failure point for  many of them: Execution.

Once your idea has been validated, it's time to start thinking of bringing that idea to market like building business. Here is where a lot of organizations make the mistake of putting the nascent product or service in a current business unit and letting them run with it. After all, now that it's a product with a defined market, you should just treat it like every other product in your portfolio, right?

Well, sort of.

Sometimes, your new innovation will inherently play by a new set of rules, a set that doesn't apply to your existing products.  These new rules need to be identified and dealt with -- through permissions, process, skill sets, etc -- as the innovation is developed and delivered.

To explain this more clearly, I'll offer a story from my own experience, when I was at PeopleSoft managing the eProcurement product. There definitely was a market (thanks to Ariba and CommerceOne), and there was traction in the growing number of customers that we had. However, there was a lot of catching up to do with what the market expected, but we were constrained by product development processes designed for maintaing something like Accounts Payable and General Ledger in a 12-18 month product cycle, while our more nimble competitors were able to ship in less than half that time. It felt like we were competing with the proverbial one hand tied behind our back.

To get around our constraints, we had to break the rules and ship new functionality when we weren't' supposed to (long-time customers may recall version 8.0 SP2) and make PeopleTools dance in ways it wasn't designed. I credit the engineering team and the creativity of their manager, MJ Guru (now at Workday) for making this all work. He had just enough of a rebellious edge to make it work without getting fired.

The lesson here is that this innovative product had to iterate and add functionality faster than our more mature products like AP and GL. It also was a new kind of solution for PeopleSoft - one meant for all employees to use without training, not just people in the back office. It was different, and playing by the rules set by a more mature product line would have killed the product if it weren't for the team that wanted it to succeed.

Of course, every new product can't require a new organization to be created. It wouldn't work. What companies should consider doing is creating some sort of "half-way house" for products that are still in the early stage to allow them to iterate quickly for the first year or two. Just because you have traction and have validated the solution does not mean that you have a complete product and are finished learning. Far from it. In fact, from my experience, the amount of learning grows exponentially as you get more customers and start receiving more pointed feedback from people using your product every day.

In the end, every product and solution has its development "supply chain" and its point on its lifecycle in addition to having an affinity to other products that have the same economic buyer and market. For companies looking to launch new products and become innovative, it's not only about coming up with the next great idea, but also knowing how to make it work with the organization that you have.

<< Part 1: Ideation      < Part 2: Validation

 

Get in touch with SeriesC to talk with us about how we help clients navigate the innovation process: team@seriesc.net