Is there a recipe for Slack's enterprise success without a traditional sales team?

Image Courtesy Ron Mader of Flickr under Creative Commons

Peruse the job listings page of a Series B enterprise start-up and you will see that a majority of the listings are ear-marked towards building out the direct sales team. And why not? The conventional and classic thinking such as in the timeless "Crossing the Chasm" advocates for a direct sales model as there is a need to explain the benefits of the new technology to customers.

Recently, the success of enterprise customer acquisition at Slack without an apparently traditional direct salesforce has caused jaws to drop and has fueled much discussion. Is this a new low cost pathway to market for a new technology company selling to the enterprise? Atlassian is another company called out as another proof point for enterprise traction without a direct sales team. Certainly, even for Slack, there is a deal size and complexity of deployment where an enterprise specific offering and sales team is necessary. But can this base level of low cost customer acquisition success be replicated? What are the ingredients of Slack's success?

Established User Preference There needs to be a support base of users familiar with the technology already present in the target customer base. These are usually in Line of Business or individual users rather than Central IT.  Preference can be achieved through two experiential mechanisms. One, through free trials and freemium versions of the product. Another way to establish this user preference is through consumerization - Where users can experience a version of the product in their personal lives as consumers. From there, this familiarity with the consumer version is translated into preference for the enterprise version or for bringing the consumer product into the workplace for its proven utility. These users inside the target customer base are a powerful influencer to the Central IT function through their word-of-mouth activity. In effect, the familiar users are acting as 'internal' sales and thus deferring the need for sales until the product is needed for more complex needs.

Pricing The price point needs to be low enough to be 'under the radar' as larger deals invoke budgetary commitments, approval cycles and multiple stakeholder involvement. The pricing should also have a level of assurance around being able to detach from the product if the value is not perceived by the customer. Slack has taken this one level further by offering pricing relief for inactive users which removes a barrier to adoption - yet another incentive to get started. Last, pricing should also be easy to find and understand. Too often, enterprise sales pricing requires a custom and high touch engagement with sales.

Ease of product acquisition and usage The product should be easy to acquire such as through a web channel and it should fit the buyer's process needs for vendor qualification, IP protection, security reviews etc. The product should be easy to use. No manuals, no on-boarding steps, no detailed training.

Marketing In the absence of a direct sales team calling on the customer, how will customers find you and how will they learn about your product? Content marketing, inbound marketing are some manifestations of this important need.

Usage Insights Without a direct sales team engaging with the customer to gather insights on usage, the product should have the capability to gather usage insights through instrumentation, call-home, self-healing, telemetry and other similar methods.

Time pattern of customer acquisition Without a direct sales team to pull in end of quarter sales, the time pattern of customer acquisition won't allow for easily meeting the pressures of quarterly revenue targets and the rigors of quarterly reporting that public companies go through. Promotions and other approaches can help but this model is more ideal for private companies.

It is not the case that a sales team is redundant in the context of this new 'Slack' model. Rather, the efforts of an enterprise sales team are being shared by a number of other entities such as users who take on the role of advocacy, marketing that drives an increasing amount of education, customer service advocates who drive absorption and resolution of customer issues.

Putting these ingredients together - especially the established user base - is a tall order. Few companies can replicate this model. However, given the impressive gains Slack has demonstrated, it is well worth the effort to re-create the magic.

The Four Constants in Storage - What will not change in the next ten years

Image Courtesy Thrifty Look under Creative Commons License

I very frequently get the question: 'What's going to change in the next 10 years? ' And that is a very interesting question; it's a very common one. I almost never get the question: 'What's not going to change in the next 10 years?' And I submit to you that second question is actually the more important of the two - because you can build a business strategy around the things that are stable in time...." Jeff Bezos, President, CEO and Chairman of the Board, Amazon.com

Some keen insights from Jeff Bezos around the constant around e-commerce; actually applicable to all commerce. In this post by Bill Gurley of Benchmark Capital, there are quotes from Jeff Bezos who goes on to describe three constants or what's not going to change in the next 10 years.

(1) We know that customers want low prices
(2) They want fast delivery
(3) They want vast selection

Sounds over-simplified, right? But, it is profound in its simplicity and high degree of empathy for the customer. Looking at the Amazon press releases and third party writings about their new features and products, I can almost correlate everything to the above three constants.

• Deals - Low Prices - Constant 1
• Drones, Home Services - Fast delivery and Consumption - Constant 2
• Music, Doubling of Amazon.ca - Increased selection - Constant 3

Inspired by Jeff's insights, I looked towards the current disruptions underway in the data storage industry where I spent some of my formative years. I realized that there are constants that will be true in the next 10 years. Indeed, they have been true for the previous ten years. Ironically, it is these constants that will drive change. Upstarts will disrupt incumbents by solving for one or more of these constants better.

In data storage, the constants are:

(1) Customers want flexible storage implementations.
(2) Customers want cheaper storage implementations.
(3) Customers want scalable storage implementations.
(4) Customers want available storage implementations.

Data Storage Constant 1 - Flexible - Customers want flexible storage implementations.

Also frequently termed business agility, users always wants to know if they can build apps faster, respond to un-anticipated web scale traffic surges, provision storage fast enough to support changing business needs in lines of business and so on. This constant is reflected in the rapid rise of the cloud computing (for storage in this case) model over the past few years, The pay-as-you-go and scale-on-demand elements of the cloud model is a disruption along the vector of flexibility. The financials of the cloud computing bellwether Amazon Web Services  and the growth of Amazon S3 speak for themselves. 

Data Storage Constant 2 - Cheaper - Customers want cheaper storage implementations. 

Storage cost reduction technologies has been a critical driver in the creation of new business models such as photo sharing apps, enterprise file serving and in fostering customer-friendly price wars in the cloud storage industry. Looking ahead, the volume, variety, growth rate of data will demand continued innovation for cost-effective storage implementations. Companies that respond in this vector will prosper - whether it is by reducing 

• management costs
• purchase price
• deployment costs such as reducing data center footprint
• integration costs through emerging hyper-converged solutions etc. 

In storage, "Do More with Less" is always a popular message that resonates with customers.

Data Storage Constant 3 - Scalable - Customers want scalable storage implementations.

The amount of data and the sources of data (machine logs, sensors, click streams etc.) are growing exponentially. Data stores must grow without service disruptions. Any growth related restrictions such as larger scale-up machines that hit limits or systems that require service interruptions will not meet this critical need. In response to this need, witness the rapid rise of distributed systems built on top of clusters of commodity servers and disk drives such as Hadoop and NoSQL databases.

Data Storage Constant 4 - Available - Customers want available storage implementations.

Users expect data to be available anywhere, anytime, any device. Cloud Storage provides that availability and access. In the distributed systems described above, data protection is implemented across multiple nodes thus preparing for the loss of a single disk or even an entire node. Current disruptions around cloud storage, distributed computing incorporate this storage constant.

So, what does this all mean? For marketing professionals, resist the urge for new and complex terminology. Instead, incorporate these constants in your messaging. This is the language of the customer. These constants will stand the test of time. For product strategy professionals? Jeff Bezos said it best " you can build a business strategy around the things that are stable in time ".

Generation Z girls business instincts and guiding factors

(Image Courtesy Scott Swigart Flickr Creative Commons)

Today, I had a chance to attend a Girls Innovate Live Pitch event organized by the Girls Innovate non-profit organization and supported by a 'village' of mentors, sponsors, parents etc. Lots of goodwill, willingness to help and community support to assist today's school age girls (ages 12 to 17) understand and harness the opportunities around computer science and entrepreneurship in general. Not to mention the soft skills of presenting, pitching and support an idea or point of view to a supportive but critical (from a learning standpoint) judging panel.

Ten pitches were delivered today, with counsel following from Christy Remey Chin, Andrea Lo, Julie Won and other pitch coaches. I looked for trends to understand how this Generation Z demographic cohort thinks about the opportunities and challenges ahead of them. What was underlying their business ideas? What guiding factors influence their decision making?

The ten pitches were roughly in four categories. One, Productivity solutions. It was clear that these school age young women were conscious of the time-pressed nature of their lives from school, play and other interests. In a good portion of the pitches, solutions were presented in the form of calendaring solutions, study guides, and other experiences that would make them more productive and efficient. Two, digital experiences that bridged the offline world with the online world. Here, homework assignment tools for teachers, personalized deals/offers, re-imagining medical facilities decor  were some of the solutions that would make today's paper, brick & mortar or partially digital solutions into new and more efficient digital experiences. Three, specialized Q & A solutions that were specific to girls and supported by mentors and peers. Four, new commerce opportunities. Here, the ideas included creative ideas to fill gaps in coffee shop offerings (look out, Starbucks and Peets) and apparel commerce.

Some guiding factors that influence their thinking include Collaborative Consumption. This demographic group appears to have embraced and will carry forward the notions of the shared economy and shared ownership. Social Responsibility - Green considerations, special needs, combating negative digital influences like cyber-bullying were some of the underlying factors in the design and development of their ideas and solutions. Social experiences - Learning from peers, sharing knowledge with peers, tapping into mentors were just some of the underlying social considerations in how they approached solutions. There's an App for that! Apps in the digital marketplaces of today's leading mobile operating systems are the starting point to how they address solving their problems. Well positioned for the evolutions in app stores for wearables and other future areas.

For mainstream appeal, Twitter needs to be more like Twitter

 Image Courtesy Wagner Flickr Creative Commons (https://www.flickr.com/photos/wagner-machado-carlos-lemes/)

Recently, much has been made about Twitter seemingly looking like Facebook or about the ability to tag people in photos in Twitter like Facebook. Twitter offers a delightful experience especially the random walk to discovery and the serendipity of you-never-know what's-going-to-pop-up-next in your feed (especially if you follow a diverse set of people and entities).  For broader appeal, the company is addressing the right priority of mainstream relevance and adoption in its stated intent to " ...By bringing the content of Twitter forward and pushing the scaffolding of the language of Twitter to the background..."

However, to do that,  I think Twitter needs to reach into its own strengths and yes, from there, draw some inspiration from others.  I offer a couple of thoughts for Twitter to amplify its appeal to the broader masses.

First, no doubt a simplified view but the ideal social media network  contains (among other things) the narcissism of Facebook, the serendipity of Twitter and the utility of a LinkedIn.

Narcissism is an underlying behavioral trait of mainstream media use. The name Myspace says it all or witness the viral distribution of the Facebook 10th anniversary "Look Back" self-video which saw 'hundreds of millions of movies rendered'. On narcissism, Twitter is highly skewed towards the celebrity. As a Twitter mainstream user remarked to me once, "I'm just going to take my 200 Twitter followers and go the (fill-in-the-blank) home". What Twitter needs to do is to make it more democratic for the masses so that they feel they have a shot at a moment of fame. Their time in the sun. Some ways to achieve that are editorial curation of non-celebrity Tweets through mechanisms such as "Tweet of the Day", "Notable Tweets", "Editor's Choice", "Rising Star"etc. an example being Blogger's Top Contributors.  Another example, fostering and encouraging forums like CNBC's Squawk on the Street where tweets of non-celebrity people are highlighted on the network for their creativity.  Twitter needs to find a way to harness all these outlets and more to make Twitter more gratifying to the masses.

On serendipity, one of the delightful aspects of Twitter is trends and breaking news. Currently, Twitter's notifications are along the lines of follow more people i.e. "People like XYZ" even if you are already following 100+ people. The masses don't have time for more information streams. But, they crave being the first to know. They fear missing out. So, the notifications should be, based on your interests, here is what news broke on Twitter, here is what you missed,  your interests XYZ is trending now etc.

Finally, just an Facebook adopted hashtags and celebrity following through Subscribe, there is one small thing that Twitter can draw inspiration from Facebook. Namely, the addictive, eye-catching, urgency inducing Red colored Notification icon for notifications. Twitter's blue on blue is too subtle for the mainstream. Red on Blue works - Look at the native apps on iPhone like the default mail icon, the phone icon etc.

2014 - The New Whole Product

The New Whole Product

Description - How has the whole product concept changed in the light of trends like cloud, consumerization, social, self-service distribution etc.? A new present-day whole product framework is presented and the elements that are different and new from the categories in the original framework are discussed in this post.

The Whole Product framework/concept was first coined by Regis McKenna and imprinted in our (technology) minds by the timeless (in technology years) book, Crossing the Chasm.  The Whole Product concept refers to the need to address the complementary set of products and experiences that a customer expects beyond the generic product that a firm creates. The premise is that by understanding the expectations of the mainstream customer, a company can plan ahead to build the complementary set of partnerships and experiences to fulfil the mainstream customers expectation thus creating a broad market for the new product entry.

I have created a framework that extends the original 'doughnut' concept into a new 'wheel' framework that attempts to incorporate the market dynamics and evolution in customer expectations since the book "Crossing the Chasm" was first published. The original premise still remains that a firm can plan market entry for a new product by understanding and addressing the complementary set of experiences that fulfil the whole product promise.

Original Framework (Source "Crossing the Chasm")

Source: Crossing the Chasm, ISBN 0-06-051712-3

Source: Crossing the Chasm, ISBN 0-06-051712-3

The New Whole Product Framework

So what are the categories in this wheel framework that are different or incremental from the original doughnut framework?

Extensibility

Marketplace - Marketplace here refers to the digital watering holes of today where complementary products, professional services, tools, references, processes etc. gather to provide a supporting set of capabilities that help complete the generic or base product.  Examples of successful marketplaces that offer these complementary capabilities include the Amazon cloud marketplace, Salesforce AppExchange etc.. Samsung's recent struggles in not being able to attract a rich developer community to build apps for the Tizen mobile operating system shows us how the generic product cannot cross the chasm to the mainstream without a supporting marketplace or ecosystem.

APIs - APIs can be core to a company's approach be it a company like Twilio's whole dependence on a developer community for its communications services or on the other side for a developer needing data sources to build a business and income stream. APIs can be also be internal to in-house developers for knowledge sharing, repeatable solutions and business agility such as discussed in the Netflix API-as-a-tactic post by Daniel Jacobson. For my framework, I refer to the "non-core" extensibility and leverage that APIs provide to business objectives by closing the gap between the generic product and the augmented product.  On the consumer side, a familiar example is how the social media companies have driven traffic and user engagement through the Share APIs that allow for easy content sharing by creators on the social media networks. On the enterprise side, the various SaaS offerings in the Amazon Web Services Marketplace that require the SaaS partner to be primarily hosted on AWS infrastructure is an example of extensibility of the AWS core offering.

Experience

Support and Social Learning - Today, support includes community based learning and the leverage that social media provides.  Social media groups, Q & A websites like Stack Overflow, vendor specific communities like Angie's List Answers  and community forums like Bimmerfest for BMW present and future owners are a key part of the support model today beyond the traditional call-in tiered support, onsite support etc. The whole product needs to factor in the availability of these support channels to augment the support model that comes with the generic product.

Training & Experiential Learning - Training now goes beyond the vendor created classes or industry body created certifications. Freemium models, free trials, advertising-based product version allow customers an entry point to experience a product version before committing spend to a full-scale, paid or ad-free version respectively. Also, consumerization of the enterprise is a strong trend, so enterprise vendors would do well to help build products that have interfaces similar to what people experience in their personal lives or to create consumer facing versions of enterprise products.  Vendors now need to create an experiential dimension to augment the generic product.

Self-Service & Multi-Device Access - Today's distribution channels include self service portals and an expectation of solutions that work across different form factor device access points. If the generic product is centered around a single device experience or high touch distribution such as field sales, then the whole product experience must be thought about carefully to include self service and multi-device experiences. 

Enrichment

Service Providers - Given the growth of the cloud-based X-as-a-Service market, to access the broad mainstream market, a traditional on-premise solution must be augmented with a cloud delivery model. A generic product may be extended into the cloud market through partnering with a cloud service provider and help them create a viable service offering. This is the 'arm merchants' to the cloud approach to extend the generic product to cloud-based delivery such as Desktop-as-a-Service. The other approach is the earlier example provided where SaaS providers can build upon an existing IaaS cloud service provider infrastructure to create a whole product cloud solution.

The overall strategies in "Crossing the Chasm"  and the tips on whole product management continue to be quite inspirational. I suggest the new framework detailed above to take a more current view of the new market dynamics to achieve success through the strategies espoused by Geoffrey Moore.

Where is the 'Consumerization of the Enterprise' puck going to be?

Image Courtesy Kenneth Lu http://www.flickr.com/photos/toasty/

Description - What consumer behaviors today will create new incremental enterprise revenue streams tomorrow? How can enterprise solution providers prepare for where the puck is going to be?

The term consumerization has a few related definitions. The reorientation of product and service designs around the individual end user.  The use of personal consumer electronics at work. The blending of personal and business technology use.  Gartner summarizes it as " Consumerization is the specific impact that consumer-originated technologies can have on enterprises. It reflects how enterprises will be affected by, and can take advantage of, new technologies and models that originate and develop in the consumer space, rather than in the enterprise IT sector. "

The oft-stated example of how consumers translated their personal device preferences (e.g. iPhone, iPads) into enterprise class communication tools of today is probably the best example of consumerization of the enterprise where consumer preferences created a new enterprise market. In fact, I think about the Apple case study as prominent and repeated as the Dell operational excellence 'build-to-order' case study of the last decade. Other less-accounted examples of consumerization include the consumer cloud storage space where consumers brought their personal usage of tools like Hightail(formerly YouSendIt), Dropbox etc. into the enterprise to share, store and collaborate work files because they found it difficult to work within the constraints of equivalent enterprise tools. SaaS, Social Media in the enterprise, and the list goes on.  Consumerization is beyond hype and demonstrated significant economic value for enterprise vendors/service providers.

So, how will present day consumer behaviors and expectations translate into new future economic streams in the enterprise? How can enterprise vendors  amplify existing consumer usage or foster new consumer usage to take advantage of these trends?

                                                

Recommendations, Ratings and Reviews - As consumers, we have become accustomed to proof-points  that are in the public domain. We expect a Yelp or Zagat review before we try a new restaurant, we expect opinions on Trip Advisor before we select a vacation destination, we rely on crowd-sourced recommendations to pick a movie to watch on Netflix, we look to ratings to evaluate apps in app stores or to trust a merchant in an online marketplace. While the recommendation/ratings/reviews system is still maturing and ironing out some wrinkles, it is here to stay. Today, the enterprise provides proof-points via customer testimonials, 3rd party studies, analyst influences etc. However, these proof-points are initiated and fostered by the vendor. The democratic or public opinion system will translate over to the enterprise.  Enterprise vendors can prepare and foster this aspect by starting with building presence in the evolving enterprise app marketplaces and proactively building support and quantitative proof-points in the online communities relevant to their industry.

Education - Products used in schools, colleges, universities are habit forming. Our first bank account, first email account etc. are sticky. The earlier in life, the stronger the habit. I recently attended a middle school club event which required presentation by groups of students to a large audience - Powerpoint was not the presentation tool of choice for this particular group of middle schoolers. Early experiences like these are what this generation will carry over into their work lives. Enterprise vendors/service providers will be well served by investing in low-cost or free solutions for education. Another way enterprises can foster consumerization is by contributing knowledge, products and define new course offerings in the evolving MOOC education space populated by Udacity, Coursera, edX etc. The M in MOOC stands for massive!

Experience - As consumers, we increasingly buy experiences more than we buy products these days. Part of the experience is manifested in the showrooming effect which the consumer vendors such as Best Buy are embracing to their advantage. We increasingly try before we buy. The experience precedes the purchase. The enterprise players already have a head-start on this through existing mechanisms such as technology centers, centers of excellence, development environments, demo/trial programs etc. The enterprise players should invest in and amplify these avenues.

Fun - "Happy Streaming", "This is gonna be fun", "Why's it cool" - These were the messages I received when opening  the package of my digital streaming device. Again, a manifestation of the experience over product trend -for example, termed as the Experience Economy by Pine-Gilmore. Or defined by Simon Sinek in his TED Talk as the "Start with the Why". The "Why" is more important than the "What" and the "How".  This is a tough task for the enterprise i.e. to make the experience matter more than the product, make it fun. I will point to the Super Bowl ads of today (incidentally) for inspiration - Think about the non-consumer companies that captured your attention by how they appealed to your sense of fun.

Other aspects of consumerization like simplicity & aesthetics found in our consumer app experiences that are well known as are the effects of consumer electronics in the workplace. I have not focused on these since much has been written about these effects and their impact on the enterprise such as this Forbes article by Darian Shirazi. Instead, I tried to take a forward looking view to emerging consumer behaviors that have not yet made it over to the enterprise.  Where the puck is going to be.......

The Mobile Factor - Just this week!

Photo Courtesy Dominik Syka

Given the MLK holiday, I got a chance to catch-up on some detail on the events in the technology space this past week. Nothing big that I missed during the course of the week while I was 'snacking' on news throughout the day and week on my smartphone. This time around in my reading, I tried to keep an eye out for what lessons can one learn from the past or for an undercurrent in the week's happenings.

Starting with the news medium itself, this WSJ article about the impact of the digital medium for magazines particularly the tablet. Given the over-exposure of revenue to advertising (75%) in the print medium  and declining advertising revenue, publishers are looking to the mobile digital medium - the tablet - to derive more customer subscription revenue. With leverage i.e. digital subscription pricing in some instances being twice that of its discounted print subscription cousin. While digital subscriptions are in the single digit percentages today, the impact of the tablet is quite evident.

Five years ago or so, when I was choosing between a Plasma-TV and LCD-TV set, I choose Plasma. Turns out, so did Panasonic. My bet was smaller but for Panasonic the bet turned out to be expensive.  Closure of its plasma-TV factory in the midst of LCD domination is described in this WSJ article. In the race between Plasma and LCD, LCD became the mainstream technology due to broader application in other products such as, yes, mobile phones.

Or the excitement in the LBO industry around the vested interested parties generated rumors of a Dell buyout. Dell struggles are strongly correlated to the computing shift from PCs to smartphones and tablets. PC account for half of Dell's revenue but in the 4th quarter of 2012, Dell's shipments fell 20.9% and PC related revenue declined by 19%. Other lessons from history? Competitive advantages have a limited shelf life - Rivals catch-up as in this case with Dell's direct sales model and supply chain efficiency. New adjacent lines of business need to align to your core competence as in this case printers/TVs did not align with Dell's made-to-order customization competence.

Can Intel be far behind in terms of the impact of the PC shift to smartphones and tablets? This past week saw Intel's fourth quarter profit fall by 27% while investors grumbled about its capital investment plans. A deeper look at the dynamics of the chip making industry has the mobile factor in spades.

And then, Commerce. The increased use of mobile devices by consumers to comparison shop while in brick and mortar stores was a key area of discussion at the National Retail Federation Conference this past week.  EBay's revenue growth of 18% in this latest quarter was attributed significantly to enhancements the company made to the mobile shopping experience.

The mobile factor and just this week!

What's ahead? A lot but look for this.... In all this fuss about Apple growth prospects or lack thereof especially as related to the iPhone 5. I believe that an understated feature of the iPhone 5 is LTE technology and the associated speed of data download. iPhone 5 shipments and usage will correlate to increased video consumption. The video industry and associated sectors will see an impact of increased consumption in the months that follow.