$100 Million niches normally exist in a $1 Billion Software Market

Product feature prioritization is a constant challenge that product managers face. Now when you focus on a huge market opportunity, focus first on a niche segment.

This is especially necessary if you want to keep your marketing and support costs low.

Take Project Management as an example.

Project management tools are needed by development teams.

Project Management is needed when consultants do small projects for hundreds of clients over the year. This is another niche.

Small teams (less than 5) working as a close knit group would want to track common tasks they work on. This could be further segmented by considering that the potential users of your tool could be working from remote locations.

To make things more clear, if there are people working remotely, then chat integration, desktop sharing could be important than say a Gantt chart which is more useful for very complex projects with tens of people. If you have an independent consultant doing many small  projects a year, pricing per project will make it expensive for these small customers.

Identifying the segments is very critical.

Addressing it one after the other is the best strategy which is like addressing the $100 million niche before taking on the $1 billion market. Probably that is a hint on how you could prioritize your feature requests.

I may be generalizing an observation a bit, but I hope you get the drift.

Ride a technology wave; Be first to market with your product

If your marketing strategy is to be the first in the market and being seen as an innovator, time to market is very critical.

Now that is obvious. However ask yourself, does your product release strategy reflect that? Or are you wavering in your decision about a market potential and later on losing the first mover advantage? Some times its ok to put a lot of your eggs in to one basket when the stakes look juicy.

Lets take an example. Being an innovator means, riding a new technology wave like Ruby on Rails or Node.js or Cloud or iOS and building a product that complements that ecosystem.

To make this marketing strategy work, here are two important aspects.

First release of the product can be ugly code! But go to market first or very very fast. You could rewrite your release 2.0 to suite your ego.

Some companies have a strategy of releasing lots of point tools instead of massive integrated suites. This is good as a customer who needs only a small piece of the suite capability can buy that specific piece. Its also an easier sale. Lower cost sale. Solving a specific problem well. And most importantly, free cross  selling for your "mothership" - integrated product suite.

Now let me get back to the second aspect. If you are confused on whether what you do has to be released in to the market as an "add on" to your existing product, or be released as a separate product, do both. But first, release as a separate product. Especially if the capability is credible enough. If you did not understand the second point, read the previous paragraph again.

One mistake we can make is, put our best people on routine stuff and miss a market opportunity completely.

What should Mail for businesses do?

Today email is like the blood that runs through the veins of a business. Businesses use it for communicating with customers and collaborating with employees. It is used for various reasons like sending an invoice, sending a generated price quote, scheduling a meeting, replying to technical queries, sending out bulk mailers about special offers, and lots of other tasks that help generate revenue.

If the number of emails sent for, say, replying to technical queries increases, it becomes hard to track it in a usual mail box. So the need for Support Management Software arises. Likewise the need for scheduling multi-user meetings and keeping oneself more organized, resulted in full fledged calendering software.

At a smaller scale email is actually good enough. Keeping your email unread is a basic way to remind yourself of a pending task.

Now when the number of interactions increase, that signals there is more customers and employees which signals more revenue for the business, which means there is a need for some special software. This software could be specialized software like CRM, Support Software or even better a mail suite that helps you get the job done right from within your mail client. For example, a reminder for contacting a client after two weeks, could be an email turning to unread state at the specified date and time and coming right on top based on a reminder you set for the last email with the client!

I would call these mailing solutions as "smart mail suites" as they give some sort of modelling (some additional capabilities) for a normal mail box.Now for every million dollar business, there will be tens of $100K businesses. These $100K businesses, I will call micro-businesses. For these micro businesses, smart mail suites are good enough. They can't afford to pay for integration of specialized software. They also find it an overkill to jump between interfaces to use these specialized software too.

Everyone needs an integrated view of their business communication. That usually needs a  million dollar software integration project to make happen in a big business. Why create the problem in the first place for a micro business, if you can provide those essentials in a "smart mail suite" ?

We could go one step further and tweak this use case for mail for micro businesses, mail for SMBs and more.


I will close with one additional point. Your hosted mail solution should obviously be miles ahead of hotmail.com of 1990s?

Steve Jobs: Learnings

Lots of praise has been showered about, how Steve Jobs was great in building insanely cool products like the iPad, iPhone and iPod.

However there may have been a greater strategy there. He may have had a vision of accessibility of data for consumers. It was about data all the way.

At many popular points of human interaction like listening to music, the way we work, entertainment, he dropped gems on the way. Gems like iPhone, iPad, Apple TV, iTunes.

He has then set up Apple to continue making data accessible via iCloud. To complete his actual vision?

Steve Jobs : Rest in peace.

What is DevOps - a short note

DevOps is heard quite often now. I will try to give my perspective.

Application management teams are normally the bridge between development and operations. To help the technology stack developed by the development team to be utilized to its optimum extent in production, there must be collaboration. This is facilitated by development team using APIs and instrumenting the applications with application specific metrics that relate closely with the actual functioning of the hosted application.

For example, just saying CPU Utilization is high does not mean much in an application context. However telling there is a surge in number of purchases via the shopping cart right now and that is causing abnormally high utilization, means a lot. This "application specific input" means a lot for operations. Getting this kind of collaboration going is DevOps for me :-)

An IT Management product could help the development team integrate these business metrics in to the same Operations Dashboards that your NOC will use. The development team would ideally use programming languages like Java, .Net, Python etc. or protocols like JMX, WMI and SNMP to communicate with the management tool.

Identifying new Products in the SaaS Model

In the on-premise world, first came point products. This had success as a specific problem was solved very well. Lower price points. Tactical sale (eg. sell to engineer vs sell to CIO). Less noise in the GUI.

Then came integrated suites and bloatware :-)

In the On-Demand world, follow the same strategy. Do point products first. But do it on a platform that can bring all of it together in to one GUI, in future. Or follow the less is more strategy.

How To Kill Innovation, SVPG Blog, Six Sigma?

A few years back, I had the opportunity to be in one of the workshops conducted by Marty. Here is a good write up about how Six Sigma could stifle innovation. Especially in IT Companies.

Last week I ran into two different software technology companies (neither in Silicon Valley) that had just recently brought in Six Sigma consultants. This caught me by surprise because it¹s been a very long time since I heard of a technology company even considering this. I'm hoping this was an anomaly, but in the spirit of "those who cannot remember the past are condemned to repeat it," I thought it's important to discuss quality-centric methodologies like Six Sigma.
In the manufacturing world especially, if your company is struggling with quality or cost issues, then Six Sigma can be very appropriate. It is based on a set of quality management techniques and practices that can significantly reduce costs and defect rates.
Unfortunately, many of those that advocate Six Sigma believe that the principles should be applied throughout the organization, for virtually any business process. But what can be good for removing defects in a manufacturing process can completely destroy the product discovery process and software development.
Please know that I am dead serious when I say this: for companies that depend on innovation, these well-intentioned but misguided people can destroy your company.
In our industry, we live and die by our ability to innovate. Yes, quality is important, but it's only interesting to even discuss quality if you've come up with a product people want.
Do you remember the old Motorola, the company that used to be "driven by a passion to invent?" How about 3M, the company that was based on encouraging initiative and innovation among its employees? And GE, the company that really did used to "bring big ideas to life." And Sun, at one point they were incredibly creative and relevant. Same with Intuit, a company that was founded on a commitment to delight customers.
What all these companies have in common is that they all used to be widely admired, consistent technology innovators. Until Six Sigma took over. Then their innovation virtually disappeared. It all became minor incremental refinements, and in our business, that'll only take you so far.
Now of course the intent of Six Sigma was never to kill or stifle innovation, but the unintended negative consequences to an organization of trying to apply Six Sigma dogma beyond the processes it is appropriate for are so profoundly damaging that they dwarf the benefits, especially over time. Yes, you can save some costs in the short-run, but you'll soon start to see the consequences in the top-line as significant new product introductions slow to a crawl, and customer reactions to your products disappoint.
Visit a technology product team in a Six Sigma company and you'll find people that have had the creativity and initiative drained right out of them. It's all about avoiding the bureaucracy and the pain associated with any deviation. And it's no surprise that they've had a hard time retaining the creative people ­ the ones they need to invent their future successful products.
For tech companies, it's just not about eliminating defects and inefficiencies. It's about discovering and delivering products and services that customers love. Don't fall into the trap of confusing building the product right, with building the right product.
If your goal is to win the Malcolm Baldrige National Quality Award, then maybe Six Sigma is for you, but if your goal is to create winning products, you need to optimize your organization instead around product discovery and encouraging just the sort of creativity and initiative that enables people to think and act differently.
It's not just Six Sigma consultants that can try to apply their techniques to areas that don't make any sense. I¹ve also seen some overzealous Scrum advocates try to apply the process to areas that it wasn't designed for and make a mess out of things as well. But honestly I¹ve never seen damage to a company's ability to innovate as deep and lasting as what has happened to companies that try to implement Six Sigma from the top down.
So if you find one of these Six Sigma guys wandering the halls of your tech company, grab them by their black belt and toss them back where they came from.

http://www.svpg.com/how-to-kill-innovation/

Richness Vs Simplicity in Products

Richness is a great feature for your product. If your product is rich in capabilities, then it will have all the options 90% of users will ever need. However you may end up building a product (say user interface) that is hard to use, because of the plethora of options you have added.

Simple products have lesser features. It will be just good enough for many, to derive a business case out of it. It can sell better on its own, without much training. This is great if your goal is to just enjoy the journey of building products.

While building products you can decide whether you want to tilt towards richness or simplicity of the product.

If your goal is to sell software with no fuss, no sales people, then, "Less is more" may be a good strategy.

Companies may choose to keep products simple so that they can reduce support and training cost and enjoy the fruits of higher productivity in their organizations.

Innovation

Innovation does not mean implementing what the world has never seen. Innovation includes making changes in the way you do work today. Implementing what others may have already done, but integrating it, in your work life, for the better.

Atleast trying to.

Open Source Projects can complement your marketing

That's a complement to the market reach & power of popular Open Source projects. Confluence a SaaS enterprise wiki from Atlassian has reached 70% of enterprises ! IBATIS (open source Java/ .NET persistence framework), AppFuse etc and surely 100s of others use Confluence for their open source community documents(via their WIKI). The traffic that gets generated is probably one of the best brand building exercises for Confluence. 37signals built a cult like following for basecamp. Interestingly, however, no prizes for guessing who is behind the Ruby on Rails. Open source community can help your marketing efforts by getting the traffic to the SaaS service you provide. Its a win win if you give it fully free for these projects.

Fastest SaaS brand

All SaaS services would love to see their web applications load as fast as, Google Search Engine. You rarely see Google.com taking greater than 0.1 ms to return their search results.

Now how do you make your brand be associated to something very critical for all SaaS Apps out there. Speed?

I have used a variety of services from Google : Search, GMail, Analytics, AdWords, Web master tools etc. But out of all those I have felt Google Search the fastest. And that is the most frequently used service for me.

At times I have felt AdWords is not a Google service as it used to be slow. Even though I have felt that, I would still tell anyone Google (as a company) is the fastest Web App on the planet !

Is there a lesson there? Maybe.

Make sure your most popular service does not run out of steam to deliver good web page response time. In other words make sure your most popular service is lightning fast. As fast as Google ! That will give a positive influence to your overall SaaS strategy.

updates for business critical functions vs twitter updates

I have observed many times people are able to make twitter updates with amazing regularity. Stress here is on "regularity" not quantity. But I have seen others who always have an excuse of not having "time" to keep the CRM updated.

Or to put it in another way, it has been hard to make the team do a "business critical" function like keeping the "sales CRM updated" when compared with a "socializing" function like writing personal comments on twitter !

What makes this possible ? I am sure employees mean well. So ...

Well twitter has twitterfox that makes tweeting a breeze. I guess the main reason for this lack of enthusiasm among employees to update a "business critical" function is lack of usable interfaces or in other words the drudgery of existing mechanisms.

So reduce this drudgery and make them more productive by giving them cool widgets and interfaces to your million dollar CRM investments.