Are You Experienced? - A Declaration for 2012?

When I was a wet behind the ears sales rep in the Rolling Meadow's Illinois branch office in 1986 (yes, they had computers back then :)), I remember the big sign that hung on the wall;

Calls + Demos = Sales

Now this office sold everything from PCs to copiers (yes, IBM sold copiers) to mini computers (S34, 36, 38, and later AS/400 and RS6000s) and the biggest S360 Mainframes.  Though the sign belonged to the "Office Machines", ie Copiers,  team, I quickly learned in my territory of small manufacturers and distributors, the key to selling the minicomputer lay in not just having the right software package, but in putting a killer demo in front of the customer.  As Jerry Maguire might say, "show me the money" and I say then and now, "show me the demo".

Fast forward 25 years or so and I now have come to the corrolary to this sign for B2B technology vendors:

Marketing + Experience = Sales

As I have blogged about extensively, I believe that B2B technology sales and marketing is being transformed, as we move from products to services, we must move from traditional evaluation based product sales to experienced based service sales, this is true in SaaS models but in many other places too.  In fact, just walk into any Apple store and see this in action, they are built to be giant experience labs, contrast that to the traditional cell phone store or Best Buy with product under glass covered cabinet shelfs or sitting tied down on turned off or canned displays.   

Why is it then that B2B Software and SaaS providers continue to hide their experiences in the equivalent of a locked glass cabinet, behind weeks of qualification and sales calls that make a customer "prove" that they should be able to give it a go?  Why not put the experience (trial, freemium, demo instance, whatever) front and center in your go to market?

I believe there are 3 main "reasons" for this hesitancy.  They are:

1) The belief that the customer will not see enough "value" in the trial or demo experience.

2) The belief that my competitors will learn so much that this will put them at an advantage over us.

3) They simply haven't invested yet (mentally or financially) in transforming their mindset, service and tactics to take advantage of experience marketing.

As you might guess, none of these reasons hold water for me.   The first and second are simply outdated vestiges of the old way of thinking.  If #1 is true, than shame on you for not delivering value, you best be fixing that regardless of your go to market strategy.  

Reason #2 is just living in a fantasy land.  First of all, a determined competitor will get a hold of your product or service, even if you spend a lot of effort and time to prevent it.  Without passing judgement on tactics, I've seen shell companies, resellers, consultants and others to be effective paths for "back door" acquisition.  It's really not hard.  

As for reason #3, rest assured, if you aren't making this investment, one of your existing or soon to be competitors is.  EVERY market is being disrupted and re-invented, you best be the one to do it to yourself.  You can't afford not to!

So with that I'd like to declare 2012 the "Year of Experience Marketing"...care to come along??

The Re-Invention of Everything

Look around and be amazed, everything is being re-invented.  From the tablet computer to the thermostat, from cars to enterprise software, from incubators to light-bulbs.  We are living in an amazing time.  Opportunities abound to capitalize on the biggest industrial change since electricity.  In fact, I've started a Pinterest board (my first!) to show off these products and services off - Check it out.

This got me thinking about what is going on.  We are at the the convergence of 6 megatrends, some new, some old, that when taken together create this incredible rush of innovation and opportunity.  The megatrends are:

• Microelectronics  - Moore's Law Marches on!  - Microelectronics continue to evolve, giving us more and more density and capability.  The innovation here is long from done with nano-circuits promising continue improvement for decades to come.
• Materials Innovation - Nano-materials are silently becoming embedded into new products at an amazing rate, driving innovation that we don't see unless we look for it.
• Cloud Computing and Big Data - This is not some hypothetical marketing hype, compute power is becoming like electricity, on demand and reliable.  This has repercussions well beyond computing, as data processing becomes embedded in everything, using realtime information to make products and services better and more compelling.  The next big thing, the cloud of things?
• Mobility - everything comes with me, my phone, my tablet, my whatever.  We are a mobile society and with ubiquitious Wifi, wired as we move, mobile but connected, not just us, but our stuff too!
• Sustainability- The recognition of the value of sustainability is driving our Green technology quests, and the innovation to create products and services that deliver value but have minimum impact on the environment, energy consumption and society.  
• Design - What began as a music player, has spawned a new design esthetic, simple, functional, easy to use.  Call it the Apple esthetic, and when all is said and done, this may be Steve Jobs biggest and most lasting contribution.  The expectations of elegance and usability, and the value that we put on them has been forever changed.  The bar has risen, and this give rise to more innovation.

Some of my favorites examples  - find them on my Pinterest Board-

Products - Lytro, Nest, iPad (of course) , Embrace
Services/Applications - Pinterest, FourSquare, Spotify

More ideas...add them in comments and watch my Pinterest board for updates

Aspen Trees or Jellyfish, it's All Digital Economy at PARCForum

Had the pleasure of attending PARC Forum talk yesterday by "How Technology is Recreating the 21st-century Economy" by W. Brian Arthur of the Sante Fe Institute. I assume they will also post the slideshare here.

Anyways, essentially Arthur argued that 100% of our economic growth comes today from the digitization of business processing, sprouting what he calls a 2nd, underground economy. His prime example is to think of all the digital transactions/look-ups etc happen between the time you swipe your ID at a Airport Kiosk and it spitting out your boarding pass. He uses the metaphor of an Aspen forest, where 10 miles of roots exist for every acre of trees. Not only that, the Aspen forest grows new trees from it's roots, like he says new processes are always invented, making the roots thicker.

I found a few things very interesting in no particular order:

1) This is the intersection of cloud computing and the "internet of things".

2) This is very likely a root cause of some of the new structural unemployment / jobless recovery we are experiencing, the job simply arent there anymore, think secretary, paralegal, ticket counter rep, etc...it is the death of process white collar jobs.

3) Arthur firmly believes are cars will drive themselves in 15-20 yrs. I feel like this is a bit unrealistic, not from a perspective of technology, but from both cultural/psychological and infra investment reasons, hmmm....

4) Depending on your view, this could be utopian (we are freed of all grunt work), dystopian (we look like the people in Wall-E*) or somewhere in between.

5) If Arthur is right when he says this is the BIGGEST technological disruption ever, wow, someone's gonna make a lot of money...

6) I'd admired Arthur's use of metaphor to communicate, especially the Aspen forest one. However, while he quoted some "stats" he had done, he didn't share his model, that would've been nice, I was left wondering...

7) I'd encourage everyone to view this content once the PARC folks put it up.

I've been to 2 of these in the last year, but really need to make a point of getting to more of them, PARC brings in some amazing Thought Leaders.

Cheers
Ken

Bridging Brand and Demand: Thought Leadership, the Missing Link

Walk into just about any B2B marketing team today, and you will see a very large focus on marketing automation. This is the tip of the iceberg that has been building since the dawn of Google and Direct email, or for about a decade, let's call that time AG for After Google. That iceberg is the maniacal focus on demand over brand, on lead generation over messaging, on revenue over valuation.

I have no qualms about this, driving revenue is what the whole marketing game is about but...

Let's face it, we've got a heard mentality going here. We bid up AdWords to the point of expense that makes us scratch our heads. We spend more and more on jamming "nurturing" touches to wring out pipeline from our marketing database. We hire quant jocks to build dashboards, optimize spend and score leads. We bow to the constant siren call of the VP of Sales, more leads, better leads, more leads, better leads. Oh, and now we nuture our brand on social media, and let's be honest, we don't really know how to do that well or even how to ask the right questions so we can learn...WOW, who wanted this CMO job anyhow?

I started my career in brand marketing at Intel. We spent literally hundreds of millions of dollars a year to build the Intel Inside brand. We measured our success in moving share, preference and all those other cool brand metrics. Was there direct marketing done too, of course, but in the days BG, the web was not the center of our universe. That world is long gone except for the biggest of big brands, and even they have adjusted dramatically.

Now, the hot topic is "Content Marketing". But in my exposure to practice, this is nothing more that nurturing programs where a bit more content is jammed down the prospects pipe, whether they want it or not. And this content is ALWAYS focused on the selling cycle and is rarely powerful enough to make a real difference.

Don't get me wrong, I think that Content Marketing is a good start, but it's missing a big part of the point. Without THOUGHT LEADERSHIP, content marketing will be lost in the same clutter as search words, competition for mindshare is enormous. We are in the world of short attention span theater, NOT Dickensian serial novel writing.

Thought Leadership, a term first coined in 1994 by Joel Kurtzman in Strategy Magazine, can be defined as "having a distinctively original idea, 
a unique point of view or an insight". ORIGINAL UNIQUE, RELEVANT, MEANINGFUL, INSIGHTFUL.

Thought Leadership marketing is the process of bringing Thought Leadership to your brand with ORIGINAL UNIQUE, RELEVANT, MEANINGFUL, INSIGHTFUL ideas that quickly break through the information overload and attention deficit AG world.

Where your content marketing is imbued with Thought Leadership, and your Nurturing campaigns utilize that content, magic happens. You build BRAND AND DEMAND, UNIQUENESS AND REVENUE.

Stay tuned in this space for more on the HOW of Thought Leadership Marketing.

Poking Through the Clouds, Three Strategies for STANDOUT Category Positioning

About 5 yrs ago, I had the pleasure of sitting through sales training with John Costigan. I remember John's opening as he said something like, "How are you?" and got the typical quite reaction. John went on to say something like, "when I am asked, I say "OUTSTANDING" and you should too. Because to STAND OUT, you MUST BE OUTSTANDING".

Fast forward to last week, when I was having a discussion on positioning with a very successful entrepreneur turned VC. He said, "the only way to win in today's markets is to STAND OUT, create something new". Immediately I thought of John and said to myself, "If you want OUTSTANDING positioning, you must STAND OUT from the crowd."

When you look around B2B technology providers, those who do stand out usually take one of three fundamental approaches to differentiation, what I call 1+1=3, Embrace and Extend, and Copy and Paste. All can generate OUTSTANDING results and returns.

As Cloud computing goes mainstream, ISV, Hoster and other service providers can no longer depend on the previously successful, "We are X category, but as SaaS" such as early pioneers like Salesforce.com did. To truly STAND OUT and poke above the clouds, these three strategies offer proven paths to success.

1) 1+1=3 or Market Consolidation - Simply put, this is a strategy of adding together existing, adjacent capabilities in order to consolidate markets.

KJR client Nimsoft (now a division of CA) changed the IT monitoring market early on in the "Cloud era" by providing one product to consolidate the monitoring of Datacenter, Service provider and Cloud infrastructure, as I have blogged about extensively in this space. Market consolidation is an effective differentiation strategy because it provides clear value to the end buyer in cost savings and operational efficiencies.

Embrace and Extend - Next Generation X - The strategy of having competitive parity to existing capabilities and adding high value new ones.

Palo Alto Networks has created very rapid growth and disruption in the mature firewall space by embracing and extending the mature enterprise Firewall market with their "Next Generation Firewall" , not only consolidating the Firewall and IPS markets with their positioning, but by redefining the vary essence of a Enterprise Firewall to be Application and User centric, not port and protocol based. Their new App-ID and User-ID technologies changed the Firewall market dramatically, and gained them real first mover advantage over the incumbents. Embrace and Extend is effective because while disruptive, it goes after existing category dollars.

Copy and Paste - Stealing from other less related markets to create something
NEW!

While Embrace and Extend disrupts existing markets, Copy and Paste creates new ones. Success Factors copied KPIs from financial and capital management systems and created a Human Capital Performance management market. Splunk copied "search" from Google and the Internet to create the "IT Search" positioning that has made it unique and sustaining. Copy and Paste works because the value of the positioning is easy to explain and apply to new markets. Copy and Paste is a great way to position and explain disruptive technologies, and creates new spending rather than consolidation or taking existing category dollars.

So as you look for stand out positioning, leverage 1+1=3, Embrace and Extend, and Copy and Paste as three effective paths to rise above the clouds and generate outstanding returns for your company.

Successful Ingredient Brands - A 3 Part Recipe...and a Cloudy Future?

vs A Showdown!!!

In 1992 I began work on the Intel Inside brand team, when I started as Brand Strategy Manager, Intel Inside working on then Dennis Carter's team with Karen Alter, Sally Fundakowski and Anne Lewnes, an unheralded but amazing innovative team. Whatta ride! In the ensuing years, we built a monster brand, the world's first technology mega ingredient brand.

In 1995, I left Intel to join a fledging, high profile start-up called Netscape. Mike Homer, the legendary (and sadly late..) VP of Marketing at Netscape and Jennifer Bailey hired me and tasked me with building "Intel Inside" for the Netscape brand. The resulting "Netscape Now" program helped us build the Netscape brand and business and served as a prototype for every Internet affiliate program that came after it.

However, when put side by side, it is easy to see why Intel Inside is now legendary in marketing history and Netscape Now is not. What sets Intel Inside, Gore-Tex, Dolby, Nutrasweet, Teflon and other run-away ingredient brands apart is that they built the brand on a basic and powerful recipe of three parts, 1) End user value 2) Brand Investment and 3) OEM or Host Financial incentive.

Let's do a quick comparison of Netscape Now and Intel Inside on these 3 criteria.

1) End Use Value
Netscape Now - The promise of Netscape Now was that the host website was "best viewed" with Netscape. This was a relatively strong proposal at the time, given Netscape's then pre-eminent ability to drive and ship support for web standards. However, it proved unsustainable from the Microsoft onslaught, a topic for another blog - Ken's Score 6/10

Intel Inside - The promise of Intel Inside was Performance and Compatibility. This was a relatively strong proposal which proved incredibly hard to communicate. However, Intel had the resources to drive this value prop into the market, and was in the enviable position to "brute force" this value - Ken's Score 6/10

Verdict: Even

2) Brand Investment

Netscape Now - Netscape rode the PR wave of 1995-1999 with expertise and abandon. Bold, innovative and compelling. HOWEVER, the investment in Netscape Now as an ingredient brand was essentially limited to my salary :). There was NO attempt to build this as a separate brand, it was a viral and community driven effort. While print and TV was out of reach financially, there were plenty of missed opportunities to syndicate the Netscape Now brand with targeted investment in sites like Yahoo, Amazon and others...despite my advocacy, never happened. Ken's Score - 3/10

Intel Inside - Intel made a conscious decision to invest in direct to consumer brand building. In an era before the Internet, this meant massive spending on TV, Print and outdoor ads, target directly at the end user. Intel was looked at by many as "Crazy" for doing this. But the results really do speak for themselves - Score 10/10

Verdict: Intel Inside by a mile!

3) OEM/Host Business Model

Netscape Now - When I wrote the program, I proposed two aspects to drive incentive for the hosting websites to display the Netscape Now brand logo. The first was to build an Internet directory of great sites that were displaying the brand, and to promote this as the place to find the best Web content. The second was to pay sites for each download they generated. Say even a modest amount like $0.25 per download. Both of these ideas were rejected for "sound" business reasons. On the first, Netscape did not want to compete with its partner Yahoo and other media and Internet service providers. Jim Barksdale later called not competing for Internet media as one of his biggest mistakes. The second was that with a free product, Netscape could not pay for downloads. I think the second was a huge mistake. To this day, I believe we needed to invest in market share to drive the business. Ken's score - 0/10

Intel Inside - Intel invested 5% of microprocessor sales into an MDF fund to pay for OEMs to use and display the Intel Inside brand on chassis, boxes and ads. This is the BIGGEST reason for the programs success. In some cases, it was the biggest margin contributor for PC manufacturers. HUGE, and not well understood by most even today. At the time, this program was a $300M/yr investment, enough said! Ken's Score 10/10

Verdict: Intel againAs is clear from the evaluation above, Intel wired the Intel Inside brand for success through a well thought out strategy and financial commitment to it. As our entire industry is being re-juggled by the cloud, those who are contemplating ingredient branding strategies should understand this model and embrace and adjust it to their needs.

Find Your Glider Bike - Paths to Successful SaaS Transitions

I am constantly surprised at how much my 4 kids teach me, but sometimes it's really cool!!!

Owen, my youngest is a typical 3 1/2 year old boy, energetic, physical and fearless. He's been riding on a glider bike for the last year, and loves to blast down hills with his feet in the air, scaring the daylights out of his Dad.

For those of you unfamiliar with glider bikes, it's basically a pedal-less 2 wheeler that you propel like a scooter with your feet. I've been watching him scoot around on his glider wondering how he would do with pedals, would he need training wheels at all?? Would he be faster than his 3 older siblings at getting on a "real" 2 wheeler? (they all transitioned from training wheels at ages between 5 and 6, one with virtual ease, one with a few tries and one with 6 months of struggle. )

On Tuesday this week, the answers became clear. Owen said, "can I ride Addie's bike?". I said, OK sure. Owen hopped on, I gave him a little push and he was off pedaling, with the balance already second nature. Amazing, 3 1/2 and riding a two wheeler already with NO teaching, no back breaking run alongs, no leaning the wrong way for balance.

So, what did I learn? First I kicked myself for not having glider bikes for the other 3, oh well. Second I marveled at the effectiveness of learning balance and pedaling separately, and how it eased the transition in a way that training wheels fail miserably at. Third, I learned that the boy is crazy fearless, but I kinda already knew that from his accumulated trips to urgent care and many other sorties in playgrounds and parks.

This episode got me thinking about transitions, especially ISV to SaaS transformations, and how to ease the pain and difficulty. Certainly, doing this requires a good deal of fearlessness and courage to change mindset, organization and tactics, as I've blogged extensively about. However, I think most organizations can find a glider bike or two to help speed the transition and avoid losing organizational balance in the process.

For example, one client of mine who has been incredibily successful with this transition, was already selling their product in subscription mode 90+% of the time. Perpetual to Subscription is a huge and often challenging business problem. However, for this client, it became a glider bike to SaaS. Pricing drives many sales and customer behaviors, my client rode this glider right into the SaaS model.

Another glider bike to SaaS might be your go to market model. Do you focus on customers getting a taste of your product through download or guided demos? This focus on direct product experience can be your glider bike to SaaS success.

What other glider bikes are out there to help speed this business transition? Would love to hear your stories...

In the meantime, we will be shopping for a new bike for Owen this weekend, and hopefully not going to urgent care!!!

Cheers
Ken

Getting Your Head Around Mindset - Driving Succcessful Transformations

I recently finished my blog series on Bridging to SaaS Success, and I've been thinking a lot about one part of that framework, Mindset. I talked about the SaaS mindset, and said, "Mindset is made up of 3 things, orientation, perspective, and focus".

Since then, Mindset has come up in my client work with technology clients, not only in the SaaS context, but in the discussion of transformative selling. Then it was there again in my non-profit work with our local school district and lastly in some work I've started on career transitioning from engineering to marketing. In all cases, my OPF (tm) Mindset framework has proven to be a quick and powerful way to both explain and leverage mindset as a way to understand and drive transformations in belief and action.

The OPF Mindset Framework:
Mindset is made of 3 components: Orientation, Perspective, Focus. In the OPF framework, each of these have a very specific definition.

1. Orientation - My relationship and adjustment to the environment that I am in
2. Perspective - My way of regarding/judging and interpreting facts
3. Focus - Where I choose to concentrate my attention

Let's take a look at a couple of examples.

Example #1, The SaaS Mindset - As I blogged earlier, SaaS providers need to change their Mindset:

• Orientation from Product to Service
• Perspective from Spikey to Continuous
• Focus from Transaction to Relationship

Without these changes, the incentive to drive the organizational requirements for success and the framework to make strategic choices will be flawed. I've seen many cases where ISVs have not succeeded with the transition to SaaS, not because of technical barriers, but because they failed to change mindset and therefore made poor organizational, resource and strategic choices.

Example #2 - Transitioning an educational institution. There has been a lot of talk in our schools about the pressure put on young students to perform to ever increasing pressure and academic standards. Tales of preschoool parents worrying about whether their preschool is the right feeder to the Ivy Leagues is now a cultural meme. Fighting this are documentaries like "Race to Nowhere" and "Waiting for Superman" which document the huge costs to our children and society of this over emphasis on achievement. Locally, I've been working with our elementary school on trying to raise "whole children" and what this means to the community. I believe that to succeed, we must redefine the communities mindset when it comes to their goals of the public school:

• Orientation - From Curriculum to Learning
• Perspective - From Achievement to Development
• Focus - From "Teach to the test" to "Teach for life"

I firmly believe that if we can shift our mindset on our educational goals, we can actually not only raise healthier, happier children, but can actually improve our levels of achievement.


Example #3 - Transitioning careers from engineering to marketing. I work with a LOT of engineers, many who have marketing in their job titles. The #1 thing that separates those who successfully make this transition is those who change their mindset.

• Orientation - From Technology to Business
• Perspective - From Details to Big Picture
• Focus - From Problem Solving to Solution Sharing

Engineers who fail to change their mindset are easy to spot. They have a hard time focusing on scale related business problems and solutions. They get trapped in "features and functions" and can't see the proverbial forest for the trees.

As you can see from above, the OPF Mindset framework can be applied to a wide set of transformations, from organization, to cultural to individual. So the next time you are faced with a transformation that is failing or struggling, step back for a minute and examine the Orientation, Perspective and Focus that you, your organization or team has adopted, and whether it is the right one for success, or anchored in your behaviors and beliefs of the past.

Happy Bridging - Ken

Tale of 2 Panels- The Cloudy Future Of Enterprise Tech Sales

A couple of weeks ago, I had the privilege of attending the Goldman Sachs Cloud Computing conference in Menlo Park, Ca. Goldman put an amazing group of companies and execs on stage. Particularly interesting to me was the conflict in opinion between the "Selling SaaS to the Enterprise" and the "Empowering the Clouds" panels when it came to the topic of the Enterprise sale cycle and process.

The first panel had execs from Workday, Apptio, Appirio and Zuora. The execs from the first 3, took the position that SaaS has NOT fundamentally changed enterprise sales. I am not a reporter, but the net of their position was, "We are still doing large deals, the cycle is still 6 to 9 months, nothing has changed"

The second panel had execs from PaaS providers Engine Yard and Joyent, and automation PaaS provider RightScale. Not surprisingly, these folks, who tend to target developers, saw that the dynamics have and are changing to shorter, trial and experience driven selling cycles. They see developers log in, code and deploy, and boom, there's a sale. Short, sweet and fast. John Dillon, CEO of Engine Yard was emphatic in declaring that the enterprise sale was coming to an end.

I have blogged recently about the transition from evaluation to experience go to market, and so I definitely lean toward the second panel's view. Successful SaaS and PaaS and IaaS providers understand the power of experience to start, accelerate and end a sales cycle.

Now certainly, many of the SaaS providers on the first panel, rightfully point out that successfully implementing a ERP or CRM or IT Portfolio management Service requires more change within the organization, which is really NOT related to SaaS vs. Software. Change in large orgs comes slowly and with pain. However, Chris Barbin of Appirio did agree that SaaS has shortened the time and cost of prof services in support of these implementations, and in fact is building his business on these types of $100K range projects vs. the old Accenture/EDS style $Ms of dollars projects.

We are in the 5-6 yr of the cloud computing transformation, the early SaaS successes (eg. Salesforce.com, Netsuite, Workday and Successfactors...) took the enterprise sales model and replicated it with SaaS Services.

However, next generation successes like Box.net, DropBox, and those we haven't seen yet, will likely disrupt these first generation successes with new sales and marketing models that fully leverage the power of experience. This, I believe is the future of Enterprise technology sales.

SaaS Go To Market - Why Experience Rules

This is my fourth blog in my series on Bridging to SaaS Success and today I'd like to focus on Go To Market Strategy.

Once we have shifted our mindset from product to service and our organization from linear to circular, we must now bridge our go to market strategy, objectives and tactics from Evaluation to Experience.

Today's customer has little patience for White Papers, datasheets, detailed feature function product specs and the like. They may attend a webinar, but the next step is experience. Even for large organizations with complex buying behavior, the expecation of SaaS is easy, accessible and meaningful experience of the service, either through demonstration instances, trial or freemium models.

In a post in November 2010 entitled, "Meet the New Enterprise Customer, He’s a Lot Like the Old Enterprise Customer" , Ben Horowitz of Andreesson Horowitz concluded;

"If you are selling to consumers or companies that behave like consumers, then moving away from the old channel models may make perfect sense. However, if you plan to sell to a large enterprise, keep in mind that the new boss is the same as the old boss."

And while Ben's point on having to manage a buying process is spot on, this blog has been bandied about by others as evidence that we should cling to the old enterprise sales and marketing model. This interpretation is just WRONG. It ignores the fundamental shift from product to service.

Service organization knows this first hand that services are evaluated via experience, not spec sheets, RFPs and lab evaluation. SaaS providers who replicate and cling to today's software Go To Market model are doomed to LONG sales cycles and MISSED opportunity.

One infrastructure ISV who launched their SaaS offering experienced this first hand. Initially, they continued their sales and marketing model of stringent business and lead qualification before trial approval. For every 100 trial requests, they approved less than 10, with an average qualification period of 2 months. This stringent qualification gave them a close rate of about 2 in 100 trial requests, as 20% of trials closed.

When they experimented with a much loosened qualification, where ~30% of the 100 requests were granted in an average of 2 weeks an amazing thing happened. Their conversion rate per 100 request shot up from 2 to 6, an incredible result, meaning the "less qualified" leads that experienced the product actually converted at the same rate as the previous model. This means that for every 100 leads in the old model, they were throwing away 4 deals!!! Not only that, they shortened their sales cycle, and are now leveraging their SaaS trials to sell their on-Premise solutions as well.

The mindset and tactical shift from Evaluation to Experience marketing and selling can payoff like this in any market segment. However, to reap the full benefits and scale of a SaaS model, providers must take a long hard look at all pieces of the marketing mix, from pricing to channel to promotion and messaging, to competition and company organization.

This brings me full circle to the post that started this series. In order to be a successful SaaS provider, organizations must not only build a great service, but they must shift their:

• Mindset from Product to Service
• Organization from Linear to Circular
• Go to market strategy and tactics from Evaluation to Experience.

With that, the Bridge to SaaS Success can generate revenues, share and valuation that meets and exceeds our most aggressive goals.

Happy Bridging,
Ken

Surround the Customer - Why You Must Rearchitect Your Organization for SaaS Success

Continuing my blog series on bridging to SaaS success, today I want to talk about transitioning from a linear to a circular organization architecture. Once I have adopted a SaaS Mindset, the next think I need to do is build the supporting infrastructure to SaaS success. In this context, your infrastructure is made up of your people and skills, your domain expertise and your organizational approach.

For the time being, let's assume you've built/hired the technical skills you need, and you are sticking to your domain "knitting", in other words you are an EXPERT in the needs and solutions you deliver and you are not simultaneously bridging to a new solution space as you move from product to service. If you lack the skills, then get them, if you are jumping domain AND delivery models, well, good luck, you'll need it.

OK, now that we have that out of the way, let's talk organization. Today's organization and its interaction with customers looks like this:

It's linear, with sporadic customer contact. The product mindset we discussed in the last post is spikey and transaction oriented, and the organization's linear structure is perfect to support this mindset.

But, as we move from a product to a services model and mindset, the organization must reflect the continuous and relationship oriented mindset we've adopted.

The organization must be circular, surrounding the customer and look like this:

Because services are about experience, to truly optimize our experience delivery, we must collapse our organizations and surround the customer. Sales and Marketing, Dev and Ops and Support and Delivery must function as a tightly knit ecosystem, enveloping the customer in the highest quality service delivery possible, continuously.

This is a HARD transition to make, it requires executive commitment and drive, and constant attention. However, market leaders MUST do this or they will fundamentally remain a product company, which is the kiss of death for any SaaS provider. Marc Benioff was wrong when he said the "End of Software", he should have said the "End of Products".

Rather than piling on Amazon...let's talk SaaS mindset

July 3, 2012 Update:  I wrote this post over a year ago, in April 2011, when Amazon had a significant outage.  In the wake of this weeks outages, I thought it was worth reposting...)

 April 2011:  The easy thing to do today would be to pontificate about the Amazon outages and the impact they had on service delivery for a wide range of SaaS providers...but you don't need this blog to do that, it's old news now (4 days later!). Instead, I'd like to use this as a great opportunity to talk about what I call the SaaS Mindset.

Last week, I blogged here about bridging to SaaS success and said that you have to change not only your product to a service, but you have to change mindset, org structure and go to market tactics. Today, I want to talk about transitioning from a Build and Sell mindset to a Market and Deliver one.

In our last 20 years in the tech industry, we've been in what I would call a Build and Sell mindset. Now that we are selling services, we must transform to a Market and Deliver mindset.
Mindset is made up of 3 things, orientation, perspective, and focus. In order to make this transition, we must get all three of these in alignment.

First and foremost, we must shift our orientation from product to service. Products, even software products, are tangible things to be purchased, installed and used. Services are experienced. This fundamental shift ripples through everything else we need to do to succeed with SaaS. Maybe all you Product Managers should change their name to Service Managers. When I worked with AOL, with their many flaws, one thing I noticed was their maniacal focus on "The Service". The words had almost a mystical quality and permeated their mindset.

Second, we must shift our perspective from spikey to continuous. Products are built, shipped and sold as discreet widgets, which leads release schedules, sales quotas and customer relationships that are "spikey" by their very nature. Services are always running (hopefully:), and always under evaluation and subject to churn. Customers make a continuous buying decision and their ongoing experience is what drives long term value. Providers who understood this went the extra yard to be ready to drive continuous delivery despite Amazon's challenges. A great example of the right mindset driving the right investment.

Third and last, we must change our focus from transaction to relationship. Great product companies have always understood this, good ones not always. There is no missing this continuous mindset with SaaS, it's a must have. In the enterprise software world, transaction is king. Large investments create both economic, organizational and personal committment to decision well beyond healthy levels. Buyers love SaaS because it raises the bar on providers to deliver real service levels, and lowers both real and perceived switching costs. I know their are plenty of Amazon customers looking TODAY at alternative service providers. This is a wake up call for Amazon if they should choose to compete for mature and enterprise customers, they need to raise their relationship game significantly.

How does your organization's mindset stack up for SaaS success? What action plan do you have to get a Service orientation, perspective and focus to permeate from Dev to marketing to sales and support???

Bridging to SaaS Success - A Basic Blueprint

(June 2012 - A quick note and update:  While I originally wrote this series in early 2011, today it seems both slight dated, but also more relevant than ever.  While I still see packaged software vendors, nearly 100% now have significant SaaS/PaaS and IaaS efforts underway.  It is without a doubt the future and it is here.  However, many managers still have not fully understood the nuance of this transition, and are still operating with product mindsets, linear orgs and evaluation based go to market tactics.  This makes this post and series more relevant than ever.  I hope you find it helpful and informative...)

 I see a lot of ISVs launching SaaS services, that's great. However, many of these initiatives fail to attract leads and customers in the volume expected, resulting in management, market and shareholder disappointment. Why is this?

While organizations spend a LOT of time understanding the technical transformation required to build a SaaS service, they fail to understand that this is just the anchorage of the transitional bridging they must do. In order to gain share and revenues they must deal with the remaining pieces of the bridge to SaaS success, which are their mindset, their organizational structure and their go to market tactics. Let's take a look at a basic blueprint for bridging to SaaS success.


Mindset - P-> S: Product to Service. Services require a mindset of continuous relationship management, not of spikey product delivery and transactions. Changing your organizational mindset is the next step to SaaS success. Read more about Mindset transitions here.

Organization - L-> C: Linear to Circular. Today's ISV structure is built to deliver products in a build and sell mindset. Even organizations that have adopted Agile SW development paradigms still go to the rhythm of minor and major releases, quarterly sales cycles, etc. Lead to sale to renewal. All linear processes. Successful service organizations are circular, they surround the customer with experience, support and delivery from the time of first contact onward. Read more on surrounding the customer here.

Go to Market Tactics: E -> E: Evaluation to Experience. Today's go to market mix, pricing, channel and promotion is built to drive evaluation and transaction. Successful service go to market requires a shift to tactics that drive experience and satisfaction. Successful SaaS organizations shift their go to market tactics and investments and become experience, not product marketers.  Read more on driving your marketing and sales Velocity with Experience here

Are you catapulting or bridging?
If you know where your going, but fire away without preparation and work, you are catapulting not bridging. Even SaaS start-ups can fall into the trap when they build their organization and tactics with people who are not transitioned to this new world themselves. Catapulting leads to poor execution and results. So start today by looking to see if you have bridged to a SaaS world or have catapulted without changing your mindset, organization and go to market tactics.

Happy Bridging
Ken

Nimsoft, market disruptive again???

See for yourself, but my biased opinion is that Nimsoft has done it again. Their Unified Manager delivers the integrated IT Service Assurance and Service Management that leading IT Depts have been striving for for years. Instead of bubble-gumming a couple of products together through loose integration, this is truly a single, unified product.

And in true Nimsoft fashion, it's ready for all the change that can be through at it, or what Nimsoft calls, "Modern IT" . Tom Grubb and the mktg team even put together a nice little animation which has quite a few subtle and not so subtle digs at the giants of the business... Nice!

Read about it at www.Nimsoft.com . On a personal note, I'm blogged in the past that positioning should be "built to last", and Nimsoft has built on the work we did 2 yrs ago, and it has served them well... and continues to do so...

Looking for Built to Last Positioning with Kick Ass High Impact Launch? For you, your friends, investments or clients? Let me know!

The 4th C, Sil Valley Product Camp Style

I had the honor to present to the Silicon Valley Product Camp yesterday. Amazing event, over 600 Product mgrs, mktrs and related folks. Had a packed room of about 40 or so in the room, very positive reception, except for a few engineers who thought I was going to talk about how to build SaaS apps, not the Go To Market of them.

Anyways, I've taken the BackofTheNapkin drawing approach to this preso, and I even think I now have an "iconic" drawing of GTM in the Cloud Era...

One attendee tweeted it best, "I've seen the future of Go To Market, and it's circular". Also, a bit an epiphany, this is all driven because -aaS offerings are SERVICES, not products. But our Go To Market mindset is a product one.

So without further ado, here's the link, enjoy!

Over and out...Ken