Posts Tagged ‘Strategy’

3+ Great Books for Sales and Marketing

15.02.2015 No comments

Three books I find useful in launching into new markets  (updated since first posted in 2009)

3 Great Books

3 Great Books

I am not a big reader of sales, marketing and business books.  However, whenever I am working with someone who is interested in further developing their ability to sell and market, I find myself recommending the same three books.

The first is Rob Jolles book, Customer Centered Selling.  It is unlikely that you have heard of this book as Rob is a relatively minor author in the field of spin/consultitive/complex selling, but I find his presentation is by far the best.  He is a veteran salesman and sales trainer from Xerox.  For me, there were two world class Silicon Valley companies in the Eighties: the great engineers came from HP and the great salesmen came from Xerox.  While both have lost their shine in recent years, they were in their time factories for their respective talents.  Rob concisely communicates sales as a science and a process for large complex consultative sales.  Rob also does a great job of explaining why salesmen (real salesmen, not order takers) are a good thing for society.

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Scaling down multi-company corproate structures

21.11.2010 No comments

Scaling Down Multi-Company Corporate Structures

I have noticed a relatively new trend within smaller companies in that they seem to be more willing to experiment with ever more complex ownership and legal structures.  I imagine that this is partly a fashion thing associated with the recent “Decade of the Banker”.  Another influence is the European tax optimization tradition that encourages more complex legal and cross boarder structures, and finally Silicon Valley stock options and shared ownership have been a model for how to motivate the latest generation technical talent.  The consequences of such complexity are often not felt until many years later.

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The High Cost of Selling Software

04.07.2010 No comments

The cost of getting software into the hands of customers is typically 2 to 4 times more than the cost of developing the software…

During the current economic downturn, governments have looked to stimulate the economy, and have shown particular emphasis on the small businesses that are seen as the engine for creating jobs.  One common stimulus has been to promote new software and other technology R&D efforts that create Intellectual Property (IP).  From my way of thinking, they have it wrong in their stimulus target.  Many small businesses are able to create software IP through “sweat equity”, that is, labor that not directly compensated.  The cost of licenses and hardware need to create the software is usually very small and the typical small business entrepreneurs invest their time while remaining in their home offices close to family and friends.

Unfortunately, after making the sacrifice required to create the product, many of these entrepreneurs then face the very sad fact that this software development effort is usually only a quarter of the total cost of getting the product to the final consumer.  (Don’t believe me?  Look at annual reports of software companies and software divisions of publicly traded companies to see where their costs are: R&D is typically 15-35% of total revenue.)  Read more…

Corporate Organizations

05.04.2010 No comments

There are 3 basic organizational structures– each flawed in some way

Organization Structure

In almost every political campaign, the opponent runs on the theme that they can successfully attack the huge waste, fraud, and abuse that exists everywhere in the government. Many will even have some facts showing how great this problem is, yet even after multiple successive new governments with this as a priority, the improvement is marginal at best.  This is not conspiracy, but the symptom of a very hard problem that does not have an easy answer.

In my business world, I see two similar paradoxical hard problems that the simple answer never provides a meaningful solution.  The first is sales cross-selling and the second is the re-use of designs (aka IPR management). Combine these two with the ever-present general corporate waste through communication barriers and you have the three justifications we typically see used for most every corporate reorganization.  You also have the reason why almost no reorganization can solve the hard problems.

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What is your Core Business?

15.03.2010 No comments

“Do you want to sell sugar water for the rest of your life, or do you want to change the world?”— Steve Jobs, CEO Apple

I am a big fan of knowing what your company’s role in the marketplace is.  You can call this your Mission, Vision, USP (Unique Selling Point), Evangelist Role, Cult Mantra, or even your Entrepreneurial root story.  They are all variations on the same idea: your company exists to do something other than the dreary “increase shareholder value through retained profits” thing.  Now, hopefully you do increase shareholder value, but that is the byproduct of doing something else that is more fun and more meaningful.

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Is Marketing the Next Finance?

28.02.2010 No comments

Rory Sutherland at Ted Talks helps me understand the value and cost of customer loyalty

I recently discovered Rory Sutherland from one of my favorite podcasts: Ted Talks.  After rapidly devouring all the YouRoryAtTEDtaksTube videos and blogs on this Olgilvy “Ad Man”, I found myself stuck on one of his minor theses: “Is marketing the new finance?” (quoted from Guy Phillipson).  He argues that every new corporate initiative in the last ten years has created the all-important spreadsheet analysis that carefully laid out shareholder value, including an analysis of the perception of the company by the financial community.  How about using the same care in analyzing how the customers feel about the company and its products?   From Rory’s perspective, business is simple: Find something that customers want to buy and then remove the barriers that keep them from buying it.   I think he is on to something.   He proposed that this current financial emphasis should be replaced by a real solid marketing emphasis. Read more…

Importance of Coffee

22.01.2010 No comments

Strategic Coffee

I truly enjoy taking my Slovene colleagues on business trips to the US and UK. Inevitably, a local business partner will invite us for a coffee and then proceed to lead us as we walk, talk, and drink our coffee. Walking and drinking coffee is a most ordinary activity in the US, but in much of Continental Europe, this borders on being an acrobatic exercise. The resulting business consequences are quite revealing. For many years I worked in a Slovenian office with two cafes in the building. We would refer to the lower cafe as the “Decision Center” as a partial joke when we walked new clients around the building on a tour. American customers would envy this “luxury” and soon we also began to see this as a luxury. As we expanded, our new buildings were made more efficient by replacing the cafes with machine equipped coffee areas. The theory was that employees should not have to waste company time getting coffee. Now, based on my observations on coffee in the corporate culture, I am prepared to make some bold conclusions on “optimal coffee behavior” in the workplace. Read more…

The Falacy of the Total Addressable Markets

03.12.2009 No comments

The Chinese Market fallacy in business planning….

ToothpasteMost every guide to a business planning process includes a section that describes the need for identifying the potential market size, sometimes called the total addressable market.  The exercise usually starts with some governmental or Gartner-like information source to identify a global or regional segment.  The planner is then instructed to make some assumptions that better restricts the addressable market, but typically the remaining market is still huge.  Based on this information, inexperienced (or deceiving)  business champions will compare their first few years cost against some percentage of this huge market as justification for proceeding with the business plan which I believe results in the common market penetration mistake I call “Chinese Marketing”.  This is a term that I intend to push into the business vocabulary:  “Chinese Marketing” is the fallacy that you can create a successful business based on getting a very small percentage of a huge market. Read more…

Practical Sales Outsourcing

18.10.2009 No comments

When you have a great idea, but the world will not come to you…

I was recently invited as a guest speaker and panelists for an entrepreneur development group.  My fellow panelist, Charles Leadbeater (a recognized proponent of innovation and Web2.0 thinking) started with a call for more collaboration and cited amazing successes and fantastic creativity.  While I agreed with his thesis, I could not help but recount the many initial business (tech initiatives) failures caused by an improper reliance on collaborators for their sales channel.  Charles was right to highlight a new paradigm of collaboration as a significant opportunity for small entrepreneurs, but for the sake of the technical entrepreneurs in the audience, I found myself taking a contrary position and highlighting the limitations of collaboration.

Author Charles Leadbeater

Engineers have a serious defect– they cannot resist solving a problem.  The reason I call this a defect is that it keeps getting in the way of sensible business.  For the most naive, they normally worry about things like manufacturing, on-line order taking systems, and future developments, but dismiss the challenges of path to market by either assuming customers will come on their own (once they recognize the brilliance) or they assume that they will outsource sales through resellers.  The truth is that many people have very successful businesses using resellers and OEM relationships, but this will not be possible at the same time as you are just entering the market. (See earlier, related blog post “Production vs Prototype Sales“).  I wish it were possible to simply outsource initial sales the same way you can outsource initial manufacturing– in truth, I am a “recovering engineer” (an addictive and life long disease) and would likely have stayed a happy engineer if it were not for this unfortunate truth.

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Selling Risk Management

29.09.2009 No comments

Definition of Experience:  A rich history of the many horrible mistakes one never wants to repeatRisk

I touched on this subject in “Lawyer Rant No. 1” — Get paid for the risks you know you are better able to manage or at least are perceived to be better able to manage.  Let’s break this down a bit more and see what insights it brings.

In a market-based economy we sell products and services to willing buyers.  These could be as simple as an apple by a street vendor or as complex as an enterprise-wide information system.  But in its elemental form, I suggest that you can only sell a combination of five basic things:

  1. Raw materials such as iron and oil mineral rights
  2. Labor
  3. Expertise as in intellectual property and knowledge transfer
  4. Economies of scale
  5. Management of risk.

The first three are obvious and the fourth, as it applies to the first three, is also obvious.  Let’s consider the last two in their pure forms. Read more…