Archives for category: Strategy
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In bad times, lower the risk for your customers

October 30, 2008 //
5

Just like everyone else, I am spending cycles thinking of the economy. Unlike many others, I don’t think the crisis is one size fits all and winners will emerge alongside the losers.

There is a lot of advice for entrepreneurs and much talk in the VC community but the talk is all focused on lowering costs and not on ways to impact the revenue side, which is as important to survive this downturn. Customers will not stop spending. It never happened and it will never happen. Customers will be simply looking to lower their risk at times like this. Who wants to invest 10M in a new ERP system, when things are uncertain? Read the rest of this entry »

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Categories Business, SaaS, Strategy

Machine gun approach to the economical crisis

October 14, 2008 //
1

There is plenty of good advice out there for start-ups and small and medium businesses (SMBs) and most of it is: slow down, save cash, go back to basics, put on hold expansion plans, be careful- it is dangerous out there. By now, everyone read the Sequoia Capital’s 56 Slide Presentation Of Doom or read the variety of e-mails sent to start-up CEOs by their investors. Today on my way to lunch I caught a glimpse of Todd McCracken, president of the National Small Business Association, talking on NPR and advising small businesses to put growth plans on hold. It is all good advice, but I have an issue with the way it is delivered.  Read the rest of this entry »

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Categories Business, leadership, SMB, Strategy

Can the financial crisis help SaaS companies in the long term?

September 30, 2008 //
5

No doubt that the financial crisis will hurt everyone. With a frozen financial system the entire idea of US capitalism (borrow cash, put it to work, grow to be profitable, invest again…) is on hold. Eric Schonfeld concluded today that VCs and Startups will not be immune to the crisis and I can not agree with him more. The one thing to remember though, is that a financial Crisis, a war or other disasters impact some people/industries/countries more than others, so while no winners will emerge, some may lose less.

One of the sectors that may lose less is the little (but fast growing) SaaS (Software as a Service) industry. Here is why: Read the rest of this entry »

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Categories SaaS, Strategy

“Tear down this wall”- the Lawson version

August 29, 2008 //
1

“Tear down this wall” was the famous challenge from United States President Ronald Reagan to Soviet leader Mikhail Gorbachev to destroy the Berlin Wall.

The best thing to do when you have only one strategy for your company is to say there is only one strategy in the world. It makes you right automatically which is a great boost for anyone’s ego. When Marc Benioff came with the famous no-software tagline, he was trying to make a point. As the only SaaS game in town, in a market dominated by Siebel, playing the no-software card helped Salesforce.com differentiate itself and win, leaving all its competitors far behind. I understand the marketing wisdom behind “no software” but I don’t agree with this claim. It will be as reasonable for Toyota to declare the death of a non-hybrid cars.

But why do I even bring “no software” up? It is all because Lawson CEO predicted the death of SaaS and carefully explained that he has only one strategy too: YES software.  I don’t even want to get to the argument who is right: Benioff or Debes . Debes is entitled to have his own opinion even if I think he is terribly wrong. Nonetheless, most of the reasons he provided to support his point of view are either wrong or bluntly anti-customer. Read the rest of this entry »

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Categories Business, SaaS, Strategy

Should you give your iPhone app for free?

July 14, 2008 //
9

I am in an iPhone mood. Just like the rest of the world. It will go away, I promise. Last week I tried to answer a more fundamental question: Should you build an iPhone app? Now that you built one: how would you price your iPhone application?

Here are some interesting statistics: based on Tech Crunch’s mid day iPhone App Store download statistics from Friday, the top 10 free apps had a total of 68,452 downloads where the paid ones (mainly games) got a total of 4,484 downloads. It means that only 1 of 15 downloaded app was a paid one. I suspect the overall numbers are even lower. Why? The ratio between the number one paid app (Monkey Ball) and the number one free app (Remote) is about 1 paid to 9 unpaid. If you look at the last apps in the top ten list the ratio is now 1 to 25- which means that the longer the tail is, the more unlikely you are to make money on your app. Read the rest of this entry »

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Categories Business, Strategy

Five practical rules on strategy and execution

March 27, 2008 //
5

I am often asked about strategy, execution and the relationship between them, and I ended up explaining the issue in an e-mail today. After reading the e-mail again, I figured it was generic enough to be widely shared, so here goes…

Rule # 1- No need for “VP of Strategy”: strategy is so well embedded in the organization operating system that outsourcing it to a VP of strategy is hardly ever a good idea. The rationale is clear: when you are not making/selling/marketing anything, your strategic ideas will dwindle or become disconnected from the company reality. Say you promoted your bright director of product marketing to be the VP of strategy—sooner or later she will lose the source of inspiration she had, which was the constant work with customers and partners and the actual creation of the product and will not be able to impact strategy as she did before.

Rule # 2- Strategy is the business of the CEO: Read the rest of this entry »

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Categories Business, leadership, Strategy

Is SaaS for me? (Part One)

March 4, 2008 //
5

People write a lot about SaaS and focus on the famous “no-software” phrase that Marc Benioff coined. What many people fail to discuss is that the SaaS model, even if one ignores the products themselves, brings real value to customers and puts them in the driver’s seat for the first time. So for once, let’s not talk about technology or delivery mechanisms, but rather focus on the change in the most basic rules of the game that the SaaS revolution is creating, with or without a planning hand from the SaaS companies side. Most of this change is affecting my favorite segment, the Small and medium businesses (SMBs), so let’s talk about how SaaS impacts the way SMBs treat IT. Read the rest of this entry »

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Categories Business, Internet, SaaS, SMB, Strategy

The Power of Focus

December 27, 2007 //
1

I just ended a two-day strategy workshop with a small startup, less than 3 years old and 12 employees strong. The CEO and founder figured out after 3 years of being reactive and flexible that being a real software company requires focus and clear strategy and was smart enough to stop everything and take the time to think about what’s next.  I think that 2-3 years from now the company will remember this workshop as a turning point for the company. Not because of the value of the workshop—all we did was synthesize what they already knew—but because it was the first time they stopped and decided on their own future. Not because a customer asked, not because someone woke up in the morning with an idea—they took the time to go through the process of developing a strategy and creating the big fat arrow in which the company will walk (or better yet, run) in the future. Read the rest of this entry »

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Categories Business, SMB, Strategy

The SMB Market—Quick Reference Guide To Winning

December 10, 2007 //
1

Last week I wrote about The SMB Market: the one that is difficult to win, but too large to ignore. My main claim was that SMB spending on IT is about to cross large enterprise spending, but very few companies are successful in winning this market. This phenomenon leads to a very scattered market, led by thousands of different vendors and lacking economies of scale. Take the Business management (AKA ERP): If you add Microsoft Dynamics, Sage, SAP and Netsuite, you will get to about 20% of market coverage. Who has the rest? Others. Who are those others? Many thousands of small to tiny companies that found a way to make a living out of selling a local or micro vertical business management software. Their customers may enjoy personal service and high fit for their needs, but they would not enjoy state of the art technology and the reliability of a large company.

 

The hardware space looks much different. In just about any survey you read, these two names are coming along strong as SMB market leaders in their spaces. These are two companies with a sound SMB strategy: Dell with its direct and efficient model (cut the middleman is an alltime SMB favorite) and Cisco with the smart separation of its business, keeping the Linksys unit as the SMB and consumer brand and Cisco as the enterprise brand.

Whether your business is a behemoth or an agile startup, if you are selling to the enterprise and now you want to sell to small businesses, you have to start thinking differently. Here are some ideas to get you started: Read the rest of this entry »

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Categories Business, SMB, Strategy

The SMB Market- Difficult To Win, But Too Large Not To Try

November 29, 2007 //
5

Quick quiz to start things off: Who is the market leader in the enterprise software space? If you guessed Oracle, IBM and SAP, you got 5 points and a bonus. Question 2: who rules the consumer space? 5 points if you guessed Google and an extra 1 if you added Microsoft. Question number 3: who is the market leader in SMB? If “let me think” is your answer, you are in good company (and you got 2 points for having a brain…). So how come such a large market doesn’t have a market leader? Read the rest of this entry »

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Categories SMB, Strategy
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