What if the platform changes?

Posted on July 27, 2008 | Comments Off on What if the platform changes?

How does an individual use a personal computer? Barring edge cases, like using niche applications for business purposes, we can generalize it to editing and storing documents, pictures, music and other files, managing appointments and tasks, and doing a whole bunch of things on Internet like checking emails, social networking, surfing, getting news and so on. These uses of a personal computer makes it such a formidable force, both at home and work. The base of a personal computer is an operating system (like Windows, Linux, Mac OS) making it the platform of the computing world.

Now consider a web browser such as the Internet Explorer or Firefox. What can a web browser do? It can connect a personal computer to the grid of servers out there somewhere in the cloud. All you need is this browser and an Internet connection. If this grid of servers can store your documents, pictures, music and so on, and the browser can provide you with tools to create and edit these items, manage your calendar and let you use the Internet as usual, your need of owning a powerful computer and cutting edge operating system diminishes significantly. The platform now changes from a personal computer to an Internet browser running on this personal computer.

When the required platform changes from an operating system to a web browser, what happens? You stop looking for the latest operating system for your personal computer and start marching towards the latest and most efficient web browser. No doubt you will still need a personal computer, but you might not need to update it every three years to stay in sync with the doubling computing power. This challenge posed by a web browser to the operation system is a case of challenging an existing platform not with a better platform, but with a different platform.

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Posted in Business, Technology

Can it be any worse?

Posted on July 25, 2008 | 2 comments

I took a flight from New York City to Seattle this week. The unexpected turn of events made me realize the importance of customer service yet again.

To start with, the Delta airlines flight took eleven hours to reach Seattle. Yes, we spent eleven hours sitting in the plane…normally it is between six to seven hours. Out of these eleven hours, four hours were spent standing and taxing at the JFK airport, during which the air conditioner was turned-off and turned-on (on passengers’ request) a few times. 

As you might know, Delta like many other airlines do not serve food in the main cabin, they sell it. As per their estimates of how many passengers normally buy food in a six hour flight, they have food for a some percentage of the attendance. So despite of standing at the door for about a couple of hours with 200 passengers in the plane, they did not take the pain of revising these estimates. Result being about half of the passengers asked to spend eleven hours on peanuts (they are complimentary!)

Well you can say, it was all circumstantial and no big deal (seriously, four hours more in a plane and no food for eleven hours is not that big of a deal). But to top it all off, there was a team of unapologetic crew. The crew right from the captain to the flight attendants acted very casually about the delay and food shortage without apologizing even once during the entire thing. The flight captain was quick to blame the delays on the JFK staff and flight attendants pointed to their estimates for shortage of food.

The simple thing that they did not get is that the customer sitting in the plane had an expectation from them, not from the JFK staff and certainly not from some guess work of how many people will be hungry. The easy thing would have been to not board the flight knowing that you are going to stand at the gate for two hours. Yet easier, load the plane with enough food after learning that the flight is going to take at least ten hours to reach the destination. and easiest of all, say the passengers who “paid” to travel with them “sorry” about the mess.

The purpose of this post is not to do Delta bashing over the bad experience I had, but I am pretty sure, or let me say I hope, that the customer service they provided their passengers here could not have been any worse.

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Posted in Business, Marketing

The gateway business

Posted on July 20, 2008 | 1 comment

Gateway to a personal computer: Windows.
Gateway to the Internet: Google.
Gateway to your social world: Facebook.

What we are talking about is a business that provides a single resort to meet (most of) your needs in a particular arena. I would define a gateway business as one that encompasses a platform that can host applications to fulfill ones needs in that world. 

How to develop a successful gateway business? Develop the world inside the gates. Visualize four gates in front of you. You get a chance to peep through each one of these gates to see what’s on the other side. Which gate will you go through? The gate across which you will find the most of what you are looking for. In a gateway business, sometimes you don’t have to be the best, but have to provide an ecosystem that delivers the customers best of what they are looking for, or in other words, you need to be the best platform out there. For example, you can debate that Windows is not the best operating system out there, but it is the one which supports the most applications providing majority of people what they want from their personal computer, making it the best platform for personal computers in the market.

Interesting thing to note here is none of these platforms we consider to be iconic gateway businesses were the first in the field. Windows was not the first operating system, Google was not the first search engine and Facebook was not the first social networking site. They all had someone before them that were not able to develop a formidable platform. This brings up two important points. First, a gateway business, though considered to be less vulnerable have its own vulnerabilities and is not indispensable. If you have a gateway business, better remain on your toes and keep evolving. Second, if you are planning to start a gateway business, and you think you can do better than what’s out there, go for it. Just something else already dominating the market is not a barrier enough to abandon the plans.

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Posted in Business, Technology

Differentiating the shoe shopping experience

Posted on July 18, 2008 | 2 comments

I recently went shopping for a pair of shoes online. A couple of things that locked me down to Zappos.com were:

  1. Peace of mind: For any pair of shoes you buy, Zappos.com covers “two way” shipping, i.e. you can return them for free if you don’t like the shoes or if they don’t fit well. People are hesitant in buying shoes and likes online because they are not sure if they will find them comfortable after wearing. Zappos.com got that covered. 
  2. The long tail: You will be wow-ed seeing the variety of apparels you will find at Zappos.com. I was able to find the shoes of the brand I wanted and in my price range somewhere in their long tail.

Both these points place Zappos.com out of the lot. Two way shipping is like an insurance and Zappos.com got it right. People are more comfortable shopping there because they know they won’t regret buying shoes online. Similarly getting to choose from (literally) thousands of options is something you cannot get in a physical store (and at least at this time not at any other online store), making it another differentiating factor.

These differentiations drew me to Zappos.com, but then I received this email from their Customer Loyalty Team (normally you get one from the shipping department when the order is shipped):

Dear Aditya Ghuwalewala,

Good news!

Although you originally ordered Standard (4 to 5 business days) shipping and handling, we have given your order special priority processing in our warehouse and are upgrading the shipping and delivery time frame for
your order.

Your order will ship out Monday, July 14th 2008 and be given a special
priority shipping status so that you can receive your order even faster than we originally promised!

 Please note that this is being done at no additional cost to you.  It is simply our way of saying thank you for being our customer.

Order #xxxxxxxx

The order above has already been packed and we will be emailing you your tracking number later today, when our computer systems are finished processing all of today’s transactions.

We are constantly striving to improve our service. If there is anything that we can do to help improve your experience, please don’t hesitate to let us know. We like to think of ourselves as a service company that happens to sell shoes, clothing, and a whole bunch of other stuff!

If you’ve enjoyed your experience with us, please tell your friends and family about Zappos.com!

Thank you!

——————————–
Zappos.com Customer Loyalty Team
cs@zappos.com

I am a pretty savvy web shopper, but it’s not always I get such an email. This email is a simple way of telling the customers that we go an extra mile to make you happy. When you can find the same pair of shoes at less than 5% price differential at more than hundred online stores, such an experience worth talking about can make all the difference!

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Posted in Marketing

Easter eggs: a marketing feature

Posted on July 8, 2008 | Comments Off on Easter eggs: a marketing feature

Easter eggs can be a great tool to market your product. I believe it can help marketers in a couple of unique ways. First, it can provide you a way to give exclusive information about something in the product to a select group of mavens, hence increasing their loyalty towards your brand. Second, it can get the customers talking about your product. A word of mouth buzz started by mavens could be more powerful than any advertising you do for the product.

Here’s an example of how you can use Easter eggs: put a feature in your online software product or service that can be discovered by pressing a certain combination of keyboard keys. Even better, put a product feature that is suggested by the community as an Easter egg in early beta stage of the feature development. Leak information to the mavens on how to discover the feature and let them test it. Mavens will love to talk about it generating a great positive wave for the product in the community. Get feedback from the community and keep improving the feature till you reach a point where the feature is ready to be added to the core (non Easter egg) of the product. It is important to acknowledge contribution of the community members with respect to the feature. This will make them proud of it and encourage future community participation.

The entire objective is to give something differentiable enough for the community to talk about and discuss. In the market, there is always something out there that is as good as, if not better than, your product. What you need is a way to differentiate your offering from the others…and Easter eggs, if used in the right way, is one way to attain this objective.

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Posted in Marketing, Technology

Comcast’s ad loaded TV guide

Posted on June 30, 2008 | Comments Off on Comcast’s ad loaded TV guide

Basic digital television programming package from Comcast costs about $40. One of the biggest selling points for the digital packages is the ease of navigating between channels using the TV guide, and what Comcast has done with the advertisements in their TV guide is made this thing frustrating and harder to use. (To put things in context here, Comcast has added an advertisement at the bottom of each page of the TV guide. This advertisement is unescapable during channel surfing. The ad is obstructive because it is made part of the scroll, i.e. in the attached picture, if you want to go to channel 63 from 62, you will first have to go through the ad, making the ad every fifth selection in any channel surfing.)  

This is a classic blunder that brings forward a couple of points. First, Comcast is literally repelling its customers using the very customer magnet it used to attract the customers. The customers feel cheated when they have to go through the obstructive ads even after paying an hefty fee to use the digital programming package. Instead of cultivating an ecosystem around the TV guide by making it more usable and likable by the customers, Comcast is prompting its customers to look for alternatives in this fiercely competitive digital television world. The least Comcast should do is make the advertisement non-obstructive during channel surfing.

It is no doubt that this is a great place to put advertisments. In the world of TiVo where customers skip the advertisements all the time, the ad that is unescapable is the one in the TV guide. But Comcast is missing it on the implementation. The best way to implement this ad would be to introduce a new set of “adware” digital programming package. Give the customers an option to select ad powered TV guide at a subsidized rate as compared to the non-ad loaded TV guide. Customers who choose for the ad funded TV guide will accept the ad, and at the same time, this would be a great way for Comcast to increase penetration into the non-digital cable customer base to go for digital television at a subsidized rate.

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Posted in Advertising

Constant Beta

Posted on June 23, 2008 | Comments Off on Constant Beta

Web 2.0 solutions are often said to be in “Constant Beta“. Instead of running a long development cycle and coming out with a final product release, there is this iterative approach where the product reaches the users in record times, and the product usage insights are harvested for further improvements in the next development cycle.

Let’s look at the factors that facilitate the Constant Beta approach of product development. I think the biggest factor leading to Constant Beta is the delivery of products as services. Software services are hosted at a central location and are controlled by the service providers. These services are easy to update and can take fast upgrades leading to continuous improvement of the product. Agile Development approaches like eXtreme Programming and Scrum are used in the services world to get the product out of the door as fast as possible followed by constant iterative improvements.

Other factors that encourage Constant Beta approach are competitive nature of industry and fast evolution of services. Internet is a fiercely competitive environment where new start-ups emerge every day doing things in a better way. In such an environment, you got to keep evolving your offering to retain the customers.

In this Constant Beta world, I believe the beta tag is debatable. We can either say that it is understood that the product is always in a state of “work under progress” or stick the beta tag to it for ever making it almost irrelevant.

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Posted in Business, Technology

What’s your Customer Magnet?

Posted on June 16, 2008 | 1 comment

For Amazon it is was books, for Zappos it’s shoes, for Trader Joe’s it may be that chips collection, for Google it’s search and so on. Books, shoes, chips and search are the customer magnets for Amazon, Zappos, Trader Joe’s and Google respectively. Customer Magnet is that one thing that really attract customers to your door steps.

It is very important to have customer intelligence around the customers coming to you and identify the magnet that is attracting them over there. Equally important is how to put this magnet to work. First, make sure you are continuously improving on that product and beating competition squarely when it comes to the magnet product. This will help you build the equity for your brand. This should be done to an extent where your name becomes synonymous to the product. Next is developing the ecosystem around that product. This is something that can make a huge difference. You got to do brand extension “correctly” and use the equity you have built for your brand.

Do you got to have a customer magnet to be successful? I am a die-hard advocate of serving the niche, so I believe yes. You got to start from somewhere. Get hold of one thing and do it in the best possible way beating all the competitive options out there. That product will be your customer magnet and the center of the ecosystem that you could develop around it.

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Posted in Business, Marketing

Lab Edition

Posted on June 8, 2008 | Comments Off on Lab Edition

While surfing through the products in Google Labs, I came across Google Talk, Lab Edition. Interestingly, that’s not the Google Talk that was released sometime back (and is still in beta), it’s a different “edition” as Google calls it, which you can use in parallel with the Google Talk beta. Then I saw a very similar thing for Gmail as well. So what’s this new lab edition concept? I believe it is an extension of the beta culture for already popular products.

I think it is important to understand that we are talking about the lab edition of already existing products. Online companies with “Labs” exposed for customers to get a sneak peek at what’s new is a growing and relatively well known concept. There are huge range of version pre-1.0 products available in company labs, whether it is Live Labs or Fidelity Labs or even Google Labs. But the products in Google Labs, in some cases, are being used by the customers and customers have a choice to keep using the existing edition or try the new lab edition. That makes those products and this operation different.

In the Web world today, we live in a continuous beta environment. Products stay in beta stage forever and are continuously evolving. But it is very risk prone to drastically change a product after it is adopted by the masses. At the same time, you need to keep improving the product to keep an edge above the competition. In such an environment, coming out with a different edition of the same product is a great way to attract the early adopters, get their feedback, see what they like and what they don’t, work on the features accordingly, and release the features that are very well received by the lab audience to the masses. 

Technologically it’s brilliant model. You get to know what’s working and what’s not without affecting the mass users of the product. Customers who are interested in experimenting get a peek at what’s coming out and keep using the older edition if they want. I believe it is a big gain from a marketing perspective as well, as such a release help marketers strengthen their base of mavens.

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Posted in Marketing, Technology

The trust premium

Posted on June 1, 2008 | Comments Off on The trust premium

You see advertisement of Yahoo! Search and Ask.com on the television, but still end up using Google. You search on Internet for USB drive and find a zillion online stores where you can buy one, but still you choose Amazon, even if you have to pay a couple of bucks more over there. Out of a dozen brands of washing detergent in a store, you pick Tide (or your favorite brand) irrespective of minor price differences. That’s because you are paying the trust premium. Customers know that they will find whatever they are looking for on the Internet through Google, they trust Amazon with their order handling, credit card information and other personal information, and they believe that a product of a certain brand will be better than others.

People pay the premium for various reasons and one of those reasons is trust. I believe trust is the most logical reason to pay the premium, and leads to a win-win scenario. For the brand, it takes huge efforts to gain a position where they can rip the fruits of trust, and I believe when a company go an extra mile to gain that trust,  they should be entitled to earn the premium. For the customer, it’s like an insurance. They trust a brand and any premium they put down for it buys them the peace of mind.

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Posted in Business, Marketing