Bizarre World
Posted on January 4, 2012
Filed Under Off Topic |
I was stopped at a traffic light tonight and saw police lights a few intersections down the road, tending to an accident. I commented to my wife that this was the third fender bender I had seen just today.
As soon as the words left my mouth a Prius rear ended a new Rolls Royce in the intersection immediately in front of us. That alone was amusing enough, little did I know we would soon be witness to an edition of Bizarre World unfolding in technicolor glory.
The Rolls Royce started to pull away and while the car was moving the passenger door opened and a shirtless man with a mullet rolled out gesturing wildly at the Prius. The Prius stooped and a rather bewildered driver stepped out… Keep in mind that this is on a busy 3 lane road filled with traffic moving at 40 mph… and the guy in the Rolls left his door wide open.
After moments of wild gesturing that I was certain would lead to a fist fight, the tone shifted to semi backslapping and the Prius guy gets in his car and drives away leaving shirtless mullet Rolls guy in the middle of the road with a damaged rear bumper.
I can only imagine Rolls guy preferred to not have any legal entanglements… only in Florida, maybe Los Angeles.
Just One Thing Management Dynamics
Posted on January 3, 2012
Filed Under Uncategorized |
I have a unique background among small company (I’m loath to write “startup”, Get Satisfaction is more substantial than that) executives in that I have venture capital, and very large company to very small company experience. I don’t think this makes me more or less prepared for the daily challenges, it just gives me a different perspective than most people and it’s something I have been reflecting on over the New Year break (I’m still on it with my family).
There are few overnight successes in this industry, which sees the rare success among a sea of failures as a result of a thousand incremental developments and course corrections. The worst thing, I am convinced, that any executive can say to the market or his/her team is “if we just do this” because a single product feature or customer win or positive review or key hire will not make a company.
The long hard slog to a product that can deliver compelling customer value and withstand competitive attack is what successful companies are made from, and while it sounds a whimsical and naive when you consider all of the shitty products that are commercially successful for reasons that have nothing to do with customers, I’ll still take it.
Coming from a big, very big, company I always resented the fight against inertia that resulted in all but certain late arrival with the next new thing. Big companies are slow because of the number of people that have to be brought into alignment to do anything… an abundance of resources that are already committed to other things which would likely be affected by something new and different.
Another asset and liability for large companies is the large customer bases that they already have, customers which generally dislike disruptive changes to things that are perceived to already work. Sure you have all those captive customers to sell to but what you end up selling them is a compromise controlled by what you would like to abandon in the quest for new and better.
Ironically, small companies have a similar inertia problem but it is the reverse image with the same effect… instead of having an abundance of resources that are unavailable and a customer base that resists change, you have to fight an abundance of resources that are unavailable because of company focus and capital constraints, and a customer base that, generally, demands more progress than you can deliver.
This is where the “just one thing” argument comes into play. The Run Like Hell startup management culture creates a really complex dynamic where you are constantly balancing multiple outcomes and all too often the desire for singular focus as an antidote to complexity results in people saying “if we just do this” when in fact the one thing they are proposing just leads to a new “just one thing”.
Complexity is the other demon that small companies fight but it’s misguided to thing that stripping away complexity will result in something that is inherently more appealing. Things are not complex because someone set out to make it that way, complexity is quite often the result of things just being, well, complex; stripping away of things that are not considered “core” or “on model” may sound great in a powerpoint presentation but for the people who are facing customers and prospective customers every day this often results is something that is a lot less compelling and appeals to a much smaller audience.
As I go into 2012 I am striving to take on new challenges with a holistic attitude. If I start with putting what is best for customers first, team stability and accomplishment second, and avoid saying “if we just do this one thing…” then I think I will be able to close out 2012 with a sense of success that I can feel proud of.
What is Gamification?
Posted on December 22, 2011
Filed Under Uncategorized |
Gamification… the buzzword is all the rage and one thing I can’t help but observe is that it means different things to everyone you talk with, even though the core concept of creating incentives for users of an app or service to do specific tasks is pretty well accepted.
Here’s what the functional breakdown means to me. This is not a complete list, please add as you see fit by posting a comment.
Challenges: Defined missions to complete or goals to accomplish, with awards or virtual items earned upon completion.
Points: Basic virtual currency. Points can be spent on virtual items or simply accrued.
Avatar System: When people create something it’s uniquely theirs and it expresses their individuality, which reinforces their connection to the app or service. Avatars are the most basic mechanism for doing this… and are a virtual good that can be acquired with points or currency.
Avatar Catalogs: Enable a user to buy virtual goods and customize an avatar.
Trophy Case: Show a user all the available awards, the ones that they’ve completed, and their progress.
Levels: Enables users to earn defined experience or level status and attain rankings to demonstrate their status within the community.
Leaderboards: Enables the app or site to keep track of, and publicize, the activities of end users based on statistics determined by app.
Canvas: Enables users to place graphical assets in a 2D space and customize a virtual representation or space, such as an avatar, or virtual room.
Groups: People like being part of something bigger than just themselves, and competing with small groups of individuals or as teams. Group activities compliment individual activities and can be used in combination in order to achieve new level status.
Competitions: A way to allow users to compete against each other, and mini-challenges that users can create and send to each other.
Gifting: Enable users to buy each other gifts for their avatars, digital canvas (virtual spaces).
Trivia: Embed a multiple-choice game widget into a site, and spin up new games on any topic you like. Slideshows are another example, increases clicks and drives simple engagement with content submitted by users.
Friends: Encourage selective participation and promote. Friends have denote strong and weak connections to other users on the system, inform group participation, and provide audience for user submitted contests and challenges.
Social Network Connectors: Enables users to enable/disable posting to, for example, Twitter and Facebook from your site, and displays “missions” for users to complete on respective social networks.
Star Rating: Enables users to rate pieces of content and see the average rating by other users.
Comments: A comment wall on your User’s profile pages. Asynchronous communication gives users additional reasons to check back to see how the conversation is evolving.
News Feed: Enables a continuous feed of the actions of various end users.
Notifier: Provides feedback and notifications to end users, such as to alert users to points that can be earned or, challenges that can be undertaken, or site features that should be investigated.
2012 Predictions
Posted on December 20, 2011
Filed Under Uncategorized |
It’s the time of year when predictions are thrown out left and right, so in keeping with the spirit I have put together a list of things I would like to see happen in the year ahead.
- The Business of Social Networks: We have seen a coalescing of business models form around social networks and not surprisingly the vast majority of them are evolutions of advertising models. This will work but as companies demand more (see next prediction) the ad driven model will evolve in ways not previously seen. What that will be I do not have a clue but sponsored tweets and ad campaigns simply cannot be anything more than a starting point.
- Brand Marketing Meets PPC: In most companies marketing exists in two forms, brand management and promotional marketing. On the latter we have seen a revolution in how companies advertise, increasingly around the notion of pay-per-click (PPC) that provides immediate and detailed performance metrics upon which ROI can be calculated. This level of performance management has not existed on the brand side but it’s coming because brands have an inherent desire to manage brand metrics to the degree that they measure online campaigns, and social factors into brand benchmarks as much as campaign objectives.
- Social as a Service: If you are a SaaS application there is an increasing portfolio of services that you can plug into your application to bring social capabilities as a layered service. There is another very nuanced view of this that speaks to the increasing sophistication of analytics services that measure social activities that contribute to application success in the market.
- 3 Mobile Form Factors: If you follow the mobile space you have no doubt paid attention to the rise of the super-size smart phone with 4.3″ and larger displays. For app developers there will have to be a standardization around template sizes and simply saying “tablets and smartphones” isn’t adequate. My view is that 10″ tablets, 4.3″ smartphones to 7″ tablets, and sub 4″ smartphones will co-exist as separate UX development paths.
- Integration Layers Matter: When it comes to social and SaaS applications a big challenge for consumers and developers alike is integration of activity streams and social services across platforms. Somebody will figure this out and deliver, to developers first, a service layer that normalizes and routes social activities across services based on rules and contexts.
- Customer Support is (increasingly) the New Marketing: Okay, this one is self-serving but dovetails nicely with some widely held views about how company-to-customer engagement is driving more than just customer sat but also revenue. Leaders in every business segment are figuring out that competitive leadership is directly linked with how they sell more stuff to the customers they already have.
- Loyalty Programs and Virtual Currencies: Everyone is familiar with the concept of loyalty programs, and their shortcomings. Virtual currencies are gaining in awareness and consumption inside games but there is a convergence happening with loyalty programs whereby points exist as just another currency with an exchange mechanism.
- SoLoMo: Social Local Mobile is on for 2012. The proliferation of location aware mobile devices and a service layer that enables mobile apps to take advantage of these capabilities is creating an entirely new technology segment that valuable companies will arise from.
- Messaging Explosion Continues Unabated: With Facebook giving companies a private messaging capability to reach fans we see yet another vehicle through which people-to-people and company-to-people communication will take place. If nothing else what this suggests is that people like talking on a phone less than ever.
- People Will Buy Stuff Through Facebook: Actually this prediction speaks very broadly about how retail is moving outside of a purely web experience. Facebook commerce is going to be a big deal, and mobile already is so there is no reason to expect that retail channels will consolidate… the opposite is more likely, multi-channel retail will become mega-multichannel.
Link Post (weekly)
Posted on December 17, 2011
Filed Under Blogs |
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The gloating is easy to understand. After all, nominal wage rigidity is the driving assumption of the Keynesian model. Unemployment is just a labor surplus; since wages are the price of labor, the fundamental cause of unemployment has to be excessive wages. And as long as the wage rigidity is nominal, you can neutralize it by printing money or otherwise boosting demand.
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Schumpeter: University challenge | The Economist
Popular anger about universities’ costs is rising just as technology is shaking colleges to their foundations. The internet is changing the rules. Star academics can lecture to millions online rather than the chosen few in person. Testing and marking can be automated. And for-profit companies such as the University of Phoenix are stripping out costs by concentrating on a handful of popular courses as well as making full use of the internet. The Sloan Foundation reports that online enrolments grew by 10% in 2010, against 2% for the sector as a whole.
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“Social Customer” Segmentation: Case Study in Tablet Market | CustomerThink
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Google Maps Potential As Geographical Archive Highlighted With Japan Earthquake
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Twitter Brand Pages: How the First 20 Brands Are Using Them (Full Gallery) | The Realtime Report
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How Valve experiments with the economics of video games – GeekWire
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Top 10 reasons why Darth Vader was an amazing project manager – GeekWire
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THE SKINNY SLEEVE MACBOOK AIR designer MacBook Air laptop sleeve
Posted from Diigo. The rest of my favorite links are here.
Freemium Mechanics
Posted on December 15, 2011
Filed Under Get Satisfaction, Marketing |
I read an interesting blog post by Ruben Gamez titled Why Free Plans Don’t Work. If you are interested in freemium business models or any of the variations on the theme, this is well worth reading however I take issue with a couple of points.
First and foremost, Gamez uses a statistics breakdown (in %) to highlight the disparity between free and paid plans. Whenever someone does this they invariably open the door to the question about what their customer numbers because a percentage breakdown without knowing what the denominator is will lack the proper context. Knowing that 1% out of 100 customers are paid versus 1% out of 100,000 is a fundamentally different discussion to have… and there is no discussion about the cost to serve free product customers.
Gamez points out a number of well known freemium companies and the transitions that they have made between free products and free trials. This is an interesting discussion and the body of work that can be studied is relatively small and fluid given the immaturity of freemium as a business model. However, a couple of things are increasingly apparent for people who are running these businesses.
You can have a freemium business that depends on a free trial process instead of a free trial and a free product option at signup, there is no debate about this, and you can have an exclusively paid product that depends on a free trial process for acquisition and onboarding. This is a smart decision in my opinion and at Get Satisfaction we are constantly tinkering with and evaluating the options relative to placement and purchase path for the free product. The idea here is to route every website visitor who becomes a prospect into a funnel that exposes them to the full product before downgrading them to a free product.
In 2010 we relaunched our website with a new “plan picker” page, which over the course of the year went through 2 significant updates that are very relavent to this analysis. Initially we had Free placed as a promo box on the sidebar, separate from the monthly subscription plans but highly visible nonetheless… this is the control group as best I can provide one because with each subsequent change to the plan picker page we changed more than just Free product placement.
In April of this year we elevated placement of the Free product to equal standing with the monthly subscription plans. Almost immediately the number of new communities created through the free product jumped substantially (and for the record, I am not going to disclose actual customer numbers so I’ll do my best to avoid putting up percentages, following my own advice above). At the same time the number of new trials created for our monthly subscription products remained flat and in some months declined materially, however the number of free-to-paid conversions for customers who were net new (not a previously paying customer who canceled) went up.
The net result was still a decline in new customer conversions and our churn rate (turnover of all paying customers in a single billing period) stayed constant or declined slightly so I would have to say that elevating Free to first world status did not improve the business.
In August we changed the plan page again and pretty much hid the Free product option. The resulting decline in Free product signups was dramatic but offset by the trial signups and associated trial conversion rate, however churn went up as well so the net effect was offset by customer cancelations in the first 90 of total life.
Churn is a really important consideration in freemium models and not just because of the financial impact. The raw churn number is obviously important because that represents the size of the hole you need to fill each month before you can start adding customers, however when churn happens is often overlooked.
You should be doing a cohort analysis each month on cancelations to determine what the survival curve is for each customer segment, which graphically represents how quickly cancelations are happening in the customer lifecycle as represented by the 25th, 50th, and 75th percentile groups.
This first example is basically a bad curve because it shows that over a proscribed period of time a large percentage of your customers fall off. It’s basically telling you that you are attracting the wrong kind of customers and you are going to invest disproportionately in replacing lost customers.
This next curve is a pretty good one, the drop is initially steep but then levels out and after 12 months you still have over half of the customers you acquired in any single cohort. What this curve is telling you is that you are losing customers who are not a good fit for you very quickly and then cancelations stabilize.
In the context of freemium this information is very valuable because it is a consequence of how prominently you are positioning free vs paid product options. If you are hiding free in order to stimulate take-up rates on paid, then you have to expect that cancelations rates will go up as a result of people converting to paid that otherwise would not if presented with a prominent free option.
This leads to the next topic I want to discuss, which is the methodology you embrace for the trial process. In the interest of being honest and transparent, the way we do it at Get Satisfaction is not the optimal way to do trials because we provision trials as a time based variant of a specific product instead of having a single trial where everything is turned on and then have the prospect select the product they want to convert into at the end of the trial process.
The second problem we created for ourselves is that we require the web visitor to create an account and give us their credit card information in order to create a trial account. This is an obstacle for trial creation first and foremost but also orients the trial experience to people who are pre-disposed to buying you before they even enter the trial process… so in effect you are giving them a free period of service for something they would pay for.
We are going to make changes to the trial process to address the two issues I raise, however I can’t do much about the account creation requirement simply because my product requires a named user to be the administrator of it… no user registration would mean I would have no account to attach the administrator rights to. My recommendation to you is that you create a free trial process that downgrades to a free product at the end of the trial period if someone doesn’t enter their credit card details and select a plan, instead of offering a trial experience in addition to a free product.
Annual billing options are a game changer in the freemium model, arguably the single most effective strategy for reducing your churn rate. Typically the way that annual billing is presented is 12 months of service for the price of 10, a 16% discount.
You can also use a buy-it-now option to bypass the trial process, offering something like a discount or promotional offering in order to pull forward demand that exists in the trial pipeline, and in the process isolating true prospects who are won or lost in the trial. I’d like to do this at Get Satisfaction as part of our structural changes to the trial process.
Having a freemium business model is dependent on a number of strategies but one that often gets overlooked is how well you identify potential demand and feature marketing inside the free product for free to paid conversion and inside the various monthly subscription products for paid-to-higher-paid conversion.
Ultimately the freemium model is a strategy that increases the catchment of leads as a result of using your product as the primary marketing vehicle through which you deliver a funnel to. Take care to structure your website so that every aspect of the content you are creating is designed to deliver a site visitor into a product experience or isolate them for followup through a traditional enterprise sales process.
It’s also worth pointing out that if you have a product that you are primarily selling to businesses, and the product itself has a multistep onboarding process, then you really have to have a higher touch sales process where you are nurturing the free and trial accounts at a higher level than if you were, for example, Evernote.
For me the mechanics of a freemium business are some of the most interesting to be involved with in a modern software as a service company. The implications of billing and provisioning system dynamics, how you structure your website content, surface funnel analytics, build upselling cues into your application, and manage high volume sales nurturing processes are incredibly complex but increasingly normal for the B2C and even B2B markets.
Link Post (weekly)
Posted on December 10, 2011
Filed Under Blogs |
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Classic.Ars: Understanding Moore’s Law
A must read so that when someone declares that Moore’s Law is the reason why… you will be able to refute the point.
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Study: Nearly 80 percent of college students can’t figure out QR codes
I’m kind of tired of these codes showing up in places that ill afford an opportunity to use them… like television commercials and the sides of buses. More significantly, the only valuable use I have found is a quick way to download applications to my Android phone.
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Tech Firm Implements Employee ‘Zero Email’ Policy – ABC News
Dumb… they didn’t implement a zero email policy but rather are attempting to force users to use some other mechanism for internal communication.
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Lot’s of good stuff for your next powerpoint deck
Posted from Diigo. The rest of my favorite links are here.
BabbaBox Fun for Children
Posted on December 8, 2011
Filed Under Uncategorized |
The nice folks at BabbaCo sent my children a BabbaBox, which is a giftbox stocked full of projects, reading, and activities built around a theme.
Targeted to 3-6 year old boys and girls, the BabbaBox is well put together and features imaginative projects and storytelling activities designed to stimulate and engage young children on a values based theme. This month the theme is gratitude and the activities include drawing and painting activities as well as a really neat camera that kids can use to take pictures of the things they are grateful for, assembling the images in a “gratitude journal” that they can share.
All of the included items are very high quality and reflect thoughtfulness in their selection. The box itself is fun and my youngest son, in the target age group, was very excited to open it.
Available as monthly subscription, several options, and as a gift option the BabbaBox is clever and imaginative. There is also a tie-in to games and apps that you can download.
Evernote Specialized Apps
Posted on December 7, 2011
Filed Under Wireless |
Evernote is launching an app called Food that people can use to capture the meals and recipes they love. This is smart, wicked smart.
The app isn’t just a better recipe app, which would require a backend service like AllRecipes, Food is a way to capture the experience of food in multiple dimensions, including what you actually ate, the wine you enjoyed, who you shared it all with and in the case of a restaurant, where you were. This is fundamentally and disruptively different than a better recipe application, but oh yeah, it also allows you to capture and build recipes… which is what a lot of people, like me, use Evernote for already.
We are seeing Evernote enter a new phase where they build on the extraordinary success of their platform and synchronization capability to deliver functionally specific applications that increase the time we spend in the Evernote world and entrench the company as a key player in the mobile to fixed computing ecosystem.
Available on iOS, I am anxiously awaiting their release of an Android version.
Forrester: Enterprise Social Software Market Sizing
Posted on December 6, 2011
Filed Under Uncategorized |
Forrester recently released a report that, among other things, forecast the size of the enterprise social software market to grow to $6.4b in 2016. Here is a link to the original publication, however a summary of the research can be found here.
I tend to follow these markets and research like this is interesting to me. I don’t have issues with the methodology that Henry Dewing used, it is appropriate for the problem he is attracted to, which is quantifying and defining the evolution of web 2.0 technology in the enterprise… but it’s still wrong because the problem is being defined too narrowly.
By a wide margin the most interesting macro trend in enterprise software is what is actually happening to the definition of enterprise software. For decades the market has labored to deliver software that employees of a company used to facilitate business processes, in fact the very essence of business software as a category is intrinsically rooted in business process automation. In recent years the focus has shifted from exclusively being driven by the business processes that a company uses to facilitate business objectives to how employees work with each other and how network technology can achieve employee-to-employee collaboration objectives that also delivers benefits to the company in the form of innovation, productivity improvements, better informed employees, and ultimately business process efficiencies as a result of all the collaboration soft benefits.
One thing has not changed as a result of all this great collaboration technology permeating the enterprise, which is that the employee is still the center point for the technology. Businesses buy the technology and employees use it, rarely, if ever, does a customer enter the equation.
It has taken a generation of social technologies available to employees in their role as consumer to bring about a more fundamental shift in the enterprise software market. Often referred to as “consumerization of the enterprise” this is phrase is as old as web 2.0 and misses the point it’s not about how people in a business will procure technology and what their expectation of business software is from a user experience standpoint; it’s much more fundamental than that and goes to the nature of how employees and customers interact together to facilitate shared objectives.
This is what Get Satisfaction was founded on, a notion that customer have a vested interest in a company they care about succeeding and when presented with an opportunity to support other customers, or tell the company how their products and services can be better, or when the company does something good that they should do more of that… customers will do exactly that.
Enterprise social software is not exclusively about how employees and companies interact, it’s also about how customers are brought into the conversation. Today’s enterprise social software market is merely scratching the surface of what is possible and previous generations of CRM and enterprise collaboration systems can be updated and instrumented with customer facing technologies to deliver far more ROI than is possibly if the focus is centered exclusively on an employee.
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About
My name is Jeff Nolan and I write Venture Chronicles. I am the VP of Product Marketing for Get Satisfaction and I write about a range of topics that interest me, including public policy, technology, entrepreneurship, finance, and global issues.
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