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Companies I Like

  • Centive
    Centive is in a dog fight with several other compensation management vendors such as Xactly and Callidus. What I like about Centive is that they are based on a solid architecture thatmakes them very scalable. More importantly though, Centive has a big picture idea of compensation as a strategic tool and their system aims at not just getting the sales representatives paid but also at helping managers develop plans and manage territories. Watch Centive develop into a company that does a lot more than ensure the accuracy of the commission check.
  • Communispace
    You know those little 100 calorie snacks that help dieters stick to their regimines? Ever wonder where they came from or who got the idea? They were the result of involving customers in the product development process through innovative on-line focus groups hosted by Communispace. This company has a knack for bringing customers and vendors together to share ideas and capture "The Voice of the Customer." Lots of major companies are flocking to Communispace because they're on to something.
  • Eloqua
    Eloqua is bringing a true methodology to marketing and customers are showing great results. Rather than blindly sending out email or generating tactical campaigns designed to find low hanging fruit, Eloqua's approach is to conduct marketing that establishes a dialog that naturally results in more leads and more efficient closes. This on demand tool is closely integrated with Salesforce.com and other implementations are coming soon.
  • Firepond
    This is cool. In an era when we spend more and more time and effort focused on governance and compliance issues too many companies rely on spreadsheets to configure and price complex solutions. The result? Orders with missing parts, too many parts, the wrong parts. Also, who is in charge of pricing and disscounts? All the time? What falls through the cracks? Do you know? Fixing the situation is often labor intensive and expensive. Better to avoid them in the first place. Firepond is a CPQ -- configuration, pricing and quotation tool that no sales organization should be without. It generates accurate quotes fast and everything that goes on in it is auditable. Gotta like that...
  • Kadient
    Kadient is another company in the mold of trying to improve how we sell. There is no doubt about the primacy of SFA but increasingly it is not enough. Sales people are continuously looking for resources and best practices and often sales departments are short on the systems and techniques of organizing such information. As a result, reps rely on email to each other and brute force effort to re-invent the wheel each time a presentation or proposal needs to be created. Kadient's solutions enable sales people to work smarter and therefore faster. The result is more and better shots on goal. Who wouldn't vote for that?
  • NetSuite
    I like what NetSuite does. One stop for accounting, e-commerce and CRM. For a small or emerging company, NetSuite can deliver all of the functionality it needs to inventory product, run all of the accounting functions and all the CRM as well as eCommerce. Pretty good. The company is doing well and is poised for an IPO. I look for them to make a lot of noise in the near future.
  • Sage Software
    Lots of us forget that the most used contact management software solutions is ACT! with more then 2.5 million users. Sage owns ACT! as well as SageCRM (formerly ACCPAC), and SalesLogix -- CRM for every budget. But they also own a lot of back office accounting software like the MAS series, Simply Accounting, and PeachTree accounting -- accounting for every budget. They have a powerful combination of solutions for SOHO, SMB and mid-size companies. Worth paying attention to.
  • Salesforce.com
    I've been covering these guys since the earth cooled and I have always believed the OnDemand model would be a major disruptive innovation. They have a few rough edges but if you want to start a successful software company you could do a lot worse.

PGreenblog

People to Read

  • Paul Greenberg
    Perhaps the dean of CRM writers, Paul wrote the book (literally) on CRM -- CRM at the Speed of Light. His insight and analysis are always interesting and frequently humorous. He is a witty and urbane observer of human nature.
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May 31, 2007

Microsoft 'Surface' surfaces

Will it suffice?

The line between a disruptive innovation and an innovation without a practical use is very thin and it is a fascinating area to explore. I have probably said it before, but these things can only be seen in retrospect. Did the innovation take off and become a permanent part of our lives like the automobile? Did it become a fad that was discarded after a while like the hoolahoop? It all depends on getting those first critical early adopters and generating some buzz. That’s sort of what Malcolm Gladwell was talking about in his book, “The Tipping Point.”

One of those moments/products was introduced this week by Microsoft. The Microsoft Surface is sort of a table that acts like a computer and has lots of wireless connectivity built in. So devices like digital cameras and music players can communicate with the surface simply by placing them on the surface of the Surface. Imagine this, you put your camera on the Surface and it extracts your pictures for viewing, sorting, ordering prints or whatever else you do.  Words don’t do this idea justice so take a look at this short video at YouTube http://www.youtube.com/watch?v=rP5y7yp06n0&eurl when you have a chance.

The Surface is a cool idea for bringing together people and ideas, perhaps a future iteration will be big enough (this one’s about 30 inches) to replace the whiteboard and all those dried up markers that accumulate in conference rooms.  I expect there will be surfaces in a variety of sizes and shapes to fit particular needs.

For example, Gordon Bell, computer scientist and guru emeritus at Digital Equipment Corporation, said in an article in the New Yorker recently that homes of the future might be built without windows because this kind of surface could be put in place to provide whatever view we want. An interesting idea.

More practically, I wonder if it might be time for Microsoft to form a strategic partnership with some national newspapers like The Wall Street Journal, NY Times, LA Times, Washington Post, the list goes on but it is finite. Newspapers have been suffering from financial problems as people spend less time reading and more time in front of the TV. Nevertheless, TV can’t cover news with the same depth that a paper does and our understanding of reality suffers from the tunnel vision that TV provides.

Microsoft might be on to something with the Surface that could save old line newspapers and the professional journalism that supports them.  One of the capabilities the Surface seems to offer is the ability to drill down into whatever is presented, perhaps much like hyperlinks.  That drill down is the kind of thing that would take newspapers and their advertising to a new and potentially lucrative level.

Imagine seeing an ad for a vacation and being able to tap it with your finger to get more specific information. The alternative today is to make a call or hit a web site and you still might not get all the information you want. There’s also the risk that you’ll simply forget about it and circle back later only to find that you’ve missed a deadline.

For now, Microsoft has brought to market a very interesting device that I expect will become an important tool for a lot of different applications. The Surface just may be the first really new technology innovation of the new century but we’ll only know that for sure in hindsight.

May 30, 2007

Transitions

I got an interesting e-mail the other day from a reader.   As you know, I have been writing about on-demand computing for close to ten years and the other day a reader sent me an email that I think sums up what a lot of other people are thinking.  The note read in part, “We've all read the same books, we all know who Clay Christensen is and none of this surprises us. So why are the big players letting themselves go down the same well worn path?”

Why indeed?  The well worn path in this case is the slow retreat from a market when a disruptive innovation hits and a company has to decide whether to compete at that level or not.  The decision is never an easy one because there are a lot of false positives, situations that look disruptive but which are ultimately proven not to be.  If a company spent its time chasing every possible disruption in its space there would be neither time nor resources to do much else, so they wait and lose market share.

In 1942 Joseph Schumpeter introduced the phrase “creative destruction” to emphasize the process of disruptive innovation and the need for companies to continually refresh their products and services or be left behind by competitors who do.  I love the entry on creative destruction in Wikipedia which says in part, “Schumpeter's contributions are not generally included in most elementary economic textbooks, which focus instead on the theories of perfect competition and static supply and demand, models which Schumpeter claimed had little relevance to the real world.” 

The Wikipedia selection pretty much brings us up to the present day software industry.  At some point, even the proverbial blind horse can see what’s happening and then the real impediment is revealed in the form of finance.  Shareholders and venture capitalists are never eager to scrap an investment in one business model in favor of another even when standing pat might mean slow death.  Often the only way forward is to straddle both worlds, but that’s harder than it sounds. Perhaps Quantum Mechanics provides the best metaphor here — you can be one or the other but not something in between.

I spoke about this with my friend, Centive CEO Mike Torto, who pointed out the 800 pound gorilla in the room.  “If you’re a public company,” he said, “your stock price is based on revenue and profit and if you suddenly reduce your top line, investors don’t like it.”  I think that’s putting it mildly but I also think that part of the problem is latency in the shareholder realm.

Still with all the emphasis on cost control in software and the popularity of on-demand you would think there would be a way to transition and that’s where latency comes in.  Torto is one of a handful of executives to have managed this high wire act but even he admits, “We didn’t jump on the (on-demand) bandwagon because it was popular.  We did it to solve a business problem.”

Centive was a company with a conventional incentive compensation solution that appealed to larger enterprises because those companies were the ones that could afford to invest in such a system.  Nevertheless, in their quest to find a bigger market they began looking at alternatives.  The logic that worked for them involved finding a lower cost way to deliver their product to more customers, which inevitably led to on-demand but in the transition state, Torto acknowledged that it was not a cheap proposition.

Centive’s odyssey took them down a path that included offering both on-premise and on-demand solutions all of which involved a lot of redundancy with mirrored departments such as sales, addressing the market.  As Torto said, “Eventually, we decided that it was too costly to run both models, we got to some important milestones for cash flow and profitability and then made the transition.”  Late last year Centive sold off its premises based business and it is now an exclusively on-demand company in a market that is red hot.

Throughout the process Torto worked closely with his board to make the change — they challenged his ideas, sharpening them in the process, and he made sure they were up dated on plans and progress.

I see many other companies today in various states of the transition.  For example, Brian Zanghi, CEO at Pragmatech Software, a sales knowledge and content company, tells me he’s about where Torto was not long ago.  Pragmatech is aggressively moving to deliver its on-demand solution (parts of which are already available) while continuing to run its premise based business.  Zanghi is at the point where he is evaluating his milestones but it’s an inexact science and, like any CEO, he has constituents such as a board of directors to convince on issues of timing.

Many other companies are not that deep into the process.  Most are small and private and their transitions will not be front page news, if they transition at all.  I sometimes wonder if the transition is harder for a small company with limited capital or for a larger company with a large and vocal shareholder base.  For every Torto or Zanghi there are probably a hundred or a thousand CEO’s who never got past elementary economics and thus may have never heard of Schumpeter.

May 23, 2007

Annus Mirabilis

A miracle year comes along very rarely, though any single year could be one depending on the subject matter.  For example, as a member of Red Sox nation, 2004 will always be a miracle year for me because my team won the World Series after 86 years of futility — the Cubs are still waiting for theirs. 

The idea of a miracle year, or what high-brows refer to in Latin as an “annus mirabilis” is usually reserved for more exalted pursuits.  Isaac Newton is widely described as having his annus mirabilis in 1665-66 when he worked out the laws of gravitation and some other concepts that led directly to our understanding of classical mechanics and informed our understanding of nature for over two hundred years. 

Similarly, Albert Einstein had his in 1905 when he brought forth his theory of Special Relativity along with three other major advances in physics that laid the foundation for much of what followed in physics and engineering during the rest of the 20th century.

It is always easy in retrospect to identify the significance of a year in which everything seems to change but it is much harder to point a finger at significant change while it is happening and the pace of modern life makes it both easier and harder for that process.  With so much change swirling around us, it is sometimes difficult to choose among major advances — it is said that human knowledge doubles every decade now, an incredible rate when you think about it.

I would like to suggest that 2007 might someday be viewed as an annus mirabilis for the software industry though my reasoning is a bit unconventional.  On Monday morning the Wall Street Journal ran a front page story about a possible new relationship between Salesforce.com and Google.  Monday was also the day the Salesforce.com held its first developers conference in Santa Clara and announced its Service Oriented Architecture (SOA) on demand, which eliminates the complexity that comes with trying to build it all in-house.

So, guess what issue had reporters ringing my cell phone?  Yup, the Google story that Salesforce CEO Marc Benioff would neither confirm or deny except with a smirk.  You’ll have to wait until June 5th I am told to get definitive information on the Google rumor. 

You know you are having an annus mirabilis when the press can’t keep up with the news you generate.

It’s an annus mirabilis alright.  After decades when nothing fundamental changed in the way that software was made, sold, delivered, and serviced, Salesforce.com has managed to stage a series of introductions that, barring some major catastrophe, will reshape the industry permanently.

You could say that on-demand computing caused a disruptive innovation nearly a decade ago and since then nothing else has upset the apple cart but there I would disagree.  The initial disruption caused by Salesforce.com and its cohorts has been echoing throughout the industry and reverberating with every new announcement but the number and type of announcements that are coming together in 2007 make this year a candidate for the title of miracle year.

In 2007, Salesforce.com broke the connection between its on-demand CRM service and its application development tools to focus on application development and deployment for the software industry at large.  Moreover, the company had the good sense to ensure that it was not simply delivering a new technology to the market.  Importantly, it actually built an infrastructure that included a way for third parties to become involved in active development, a marketplace for them to sell and deliver their wares, and later on a mechanism for capturing revenue that parallels the conventional software industry in all important details. 

It has also founded a high level school for new companies and entrepreneurs to set up their businesses, the Salesforce Incubator.  With all that Salesforce.com has fundamentally altered the way we think about, develop, deploy and use enterprise software and the number and type of applications available goes way beyond CRM or even the front office for that matter.

I expect the over the next 18 months we will see a workable ERP solution take shape on the AppExchange as well.  Many people have wondered aloud about why Salesforce.com has not yet entered the ERP market and Parker Harris, Benioff’s co-founder and Salesforce.com’s guru gave a few insights at a press lunch on Monday. 

First of all, he said that the company has no interest or plan to do an ERP system. Harris also said that ERP would be a tough slog because companies are even more conservative about their ERP data than they had been about their customer data so there is still some convincing to do.  Last of all I think Salesforce.com expects that development effort to come organically from the partner community.

The other thing about an annus mirabilis is that it tends to destroy the old order.  We never looked at the sun and the moon the same way after Newton and Einstein gave us a whole new way to think about the nature of space, time and reality.  All the Salesforce.com news has to make you wonder what they’re thinking at Oracle, SAP and Microsoft.

May 17, 2007

Sage Software Continues to Execute

Sage Software is having its annual Insights user meeting this week in Orlando and I am filing this piece from there.  More than 3,000 partner representatives are in attendance which accounts for a broad array of products that include ACT!, SageCRM, SageCRM.com, and SalesLogix on the front office side plus a blizzard of accounting and ERP products for the back office.

Although it is not the only front office software company to sell through the indirect channel, it is the only one I can think of with such a complete focus on that distribution model which presents some unique challenges as well as some advantages for the company.

A few years ago Sage was an oddity that didn’t even have rights to its own name in North America and for awhile used Best Software on this continent.  Back then there was no shortage of pundits who said that Sage’s days were numbered and that when the likes of Microsoft, Oracle, SAP and others got into the SMB space it would be lights out for Sage. 

Well, the short story is we’re still waiting for that to happen and a lot of erstwhile competitors have come to relearn the old truth that the SMB market is a very different game.  In some respects it might be like the difference between chess and checkers but a good chess player can still get his or her clock cleaned by a checker player on a mission. 

According to CEO Ron Verni’s Monday keynote, since 2003 the company has more than tripled its North American revenue to just under one billion dollars.  This year’s run rate puts it comfortably past that milestone and globally Sage has been a billion dollar company for some time putting it in elite company with the largest software companies on the planet.

Unlike many other companies in the front and back office spaces, Sage has grown by acquisition and it has sometimes been challenging for the company to present a unified front.  The good news though, is that with time Sage has been able to blend its product lines and its operations into a cohesive group so that today it looks and operates much more like a company with a lot of products rather than a company with a lot of business units trying to make sense of its goulash. 

The result is that Sage can credibly present itself as a front to back office solution provider in multiple and diverse vertical markets such as construction and real estate, medical office management and numerous other areas where its partners establish areas of expertise around ERP and CRM.

Sage is by far not a perfect company and it will always have the challenges of a software company trying to build and sell products and with so many products to ride herd on the challenges will not likely diminish.  Sage also has to juggle the requirements of a diverse group of resellers which is no small task in itself. 

What is interesting to me though, is the forward direction and vision that it is presenting to its partners.  In no uncertain terms the message to the business partners is that delivering traditional systems integration services is no longer enough.  Making sure all the green lights are on is not a way to make a living if you are delivering front and back office solutions to the SMB market.

For example, one of the keynote speakers was Joe Pine author of “The Experience Economy,” who in the late 1990’s was perhaps the first author to advocate customizing goods and services into customer experiences.  In my mind there is no better setting for that message to take hold than a reseller channel which must compete against other providers — sometimes providers selling the same products. 

Appropriately, two of the strongest themes at this conference are integration and customization.  A lot of other software companies are striking similar notes on either customization, integration or the ever popular customer experience these days but what I hear from them makes me think that these ideas are things that can be added on as a final step in the delivery process.  It reminds me of the old idea of inspecting for quality at the end of the manufacturing process rather than finding ways to build quality into products. 

With its army of resellers whose livelihoods are dependent on delivering unique results for SMB companies, Sage can, in some ways, better focus on the customer experience and the customization and integration that make it possible.  In the end, the SMB space might be a classic example of the free market in action where numerous vendors make best fit solutions at specific low price points.  If anything, the partner channel is most likely Sage’s secret sauce and a strong barrier to entry for competition which accounts for why this company that grew by acquisition is such a tough and successful competitor.

May 09, 2007

Early adopter blues?

Is Web 2.0’s upside capped? by ZDNet's Larry Dignan -- A report from the Pew Internet & American Life Project reveals Web 2.0 usage is limited to an elite group while half of Americans find technology annoying to some degree. The report dubbed "A Typology of Information and Communication Technology Users (PDF, Techmeme discussion)" reveals that 31 percent of Americans are "Elite Tech Users." The [...]

If you want to know what's going on in the Web 2.0 world check out this post from the Pew Internet & American Life Project.  It should surprise no one that Web 2.0 technologies -- things like text messaging, electronic gadgets in general, instant messaging, music downloading and much more -- are largely the province of a small percentage of tech savvy early adopters.  What's interresting to me is that the data presented in this report is typical of early markets AND so is the implicit pessimism that adoption must increase or the movement will be stillborn.

Of course!  That's the way of the world in early markets.  Right now there's a lot of technology out there that is more or less looking for something useful to do when it grows up.  And more to the point, we will soon discover, or we are already discovering, that some of this blizzard of technology will never reach the mass market but might do just fine in select small markets. 

Only 15 percent of American adults are classified in this report as either "omnivores" or "connectors" i.e. people who really get use out of their devices while another 16 percent are very awaare and generally do tech cheerleading.  The rest?  They say they're happy knowing there are more features on their devices than they know how to use and most of them agree somewhat with the contention that new devices in their lives need to come with human help to figure out how to set up and use.

Blogs are a good example.  I forget how many blogs we have in the US but the number is beginning to mirror the number of cars per household and you just know that isn't going to continue (as I write I even wonder who is going to read this). 

In any event the market will do what markets are great at, namely figuring out what to keep and what to throw over the transom.  In this early stage there are a lot of Web 2.0/gadgets that look like they might serve useful purposes for communicating, organizing and helping make better decisions but as usual there is a user adoption issue standing between these gadgets and the companies that make them and mega profits.

The more things change, the more they don't.

May 08, 2007

Are VC's necessary?

Do we still need venture capitalists in the software industry?  Sounds like a no-brainer but the question also reflects the disruption that is taking place in enterprise software that was initiated by salesforce.com and accelerated with its unveiling of a company incubator in San Mateo.

For the record, I think there will always be a place for VC’s and their money, but it is also true that their position, and possibly their power, may be diminished — or possibly enhanced by the incubator concept. 

First, the good news.  The introduction of salesforce.com’s incubator has finally put a floor under the innovation and entrepreneurship processes.  In the years leading up to the bursting of the Internet bubble it was common for entrepreneurs to get funding for ideas that lacked business plans — and maybe even prototypes — with the result that everything came crashing down like a house of cards the first time a breeze came up. 

Instead, I suspect that the incubator might become an essential part of the process that leads up to getting funding, analogous to the Bachelor’s degree requirements that most graduate schools have.  How a new company does in an incubator setting might become a core requirement for anyone who considers investing in a new company. 

More importantly, if done correctly, an incubator experience should be able to get first time entrepreneurs some basic business experience that many may lack.  So, all in all, I could easily see a time when an incubator experience becomes a standard part of the way that VC’s evaluate potential investments.  I also think it’s possible that VC success rates will improve because many of the mistakes that young companies with inexperienced management teams fall into could be weeded out earlier.

Nevertheless, to get back to the original question, the full answer is a little different.  If an incubator is the only difference in the entrepreneurship process, then it is quite likely that emerging companies will still need VC money because an awful lot of it goes to things that are not strictly related to building a product like rent, marketing and building a sales force. 

As it turns out, the incubator concept has been around for a long time and the single important difference here is that in addition to providing all sorts of business nurturing, the incubator in San Mateo tries to standardize products on a platform and tool set that make it possible to standardize the way the applications are eventually marketed and sold. It is this innovation that sets the new incubator apart because it changes the marketing and sales paradigm, removing economic friction and the need for at least some of the capital required to overcome it.

Labor is still one of the biggest parts of a company’s outlays and sales burns cash like there’s no tomorrow.  If you are building a conventional business the cash that drives the sales and marketing team during the ramp-up process has to come from somewhere and that place has traditionally been the venture capital community.  The natural question then becomes, what alternatives does an entrepreneur have other than building a sales force?  The answer is already in front of us in the form of what salesforce.com calls the AppExchange.

An online commerce device like the AppExchange can do a lot to reduce or eliminate the costs associated with selling software. For example, it greatly reduces the need to build out a sales and marketing component of a business.  It remains to be seen how profits will be affected but it is possible that enterprise software can be just was profitable at a lower price point if costs (e.g. sales overhead) can be driven out of a product’s price. 

Purists might say that a sales force is required to bring new product ideas into a market but maybe not or at least not so much.  Expensive sales and marketing drives up prices and is essential only if there is no other means of penetrating a market.  The alternative is to greatly reduce friction caused by sales and marketing to the point that a price is so low that a buyer can afford to try a product and discard it if it fails to meet one or more key needs.

Some people might find this to be wasteful but it is exactly the approach that early adopters have used for decades.  In his early books like “Crossing the Chasm,” Geoffrey Moore made the point that early adopters tended to be companies with lots of resources that can afford to experiment with innovative products (and possibly throw them away) and in many cases help the vendor articulate its true value proposition.

The ability to pay for the costs associated with that kind of innovation means early adopters get the first benefits and is one reason they gain great market advantage when they adopt new technologies.  Imagine what might happen though if the cost of trying an innovative idea drops.  In that scenario, potentially any company could be an early adopter with far reaching impacts on competition.

Inevitably, we come back to the original question — are VC’s still necessary?  The answer is yes, but this business is changing significantly, even for VC’s and it is possible that VC’s will need to change their models in the same ways that software companies are in the middle of changing theirs.  In the not too distant future, a venture capitalist might look a lot more like salesforce.com than any of the firms on Sand Hill Road.

The New Garage, San Mateo, CA

Well, it didn’t look like a garage, that’s all I can say. It was clean and freshly painted and if you believe the stories in the press, recently exorcised to remove the ghosts of Siebel.  It was Salesforce.com’s incubator, the closest thing I have found to my New Garage concept.

For several years now, I have been saying that on-demand platform technologies would change many things including how companies are formed and how new products are built and I used the analogy of going back to the garage since that’s where innovators have historically gotten their starts.  Yesterday I was at salesforce.com’s self-described incubator to get a look at how they updated this idea for 21st century Hewlett’s and Packard’s and I have to say, it looks pretty cool.

If you aren’t familiar with the incubator yet, it’s a pretty simple idea.  Just as the name implies, it is a place for nascent companies to go to build new products as well as themselves and to refine their ideas.  It is also a place where more established companies have congregated to jump-start their on-demand strategies and roughly half of the first class of incubator companies fit the latter categorization.

In broad terms the importance of the incubator goes way beyond anything that is technologically related.  In my mind it’s mostly about social capital formation.  Let me explain.

With the plethora of application tools now available, an innovative person with an idea can bang out an application or even a system in a very short time and the fact that there are nearly 600 applications in the AppExchange is testament to that fact.  True, many of the AppExchange applications may not have been built using the Salesforce tools, but there are quite a few that have.  However these applications have been built it is not the building that determines success or failure of a venture it’s at least equally about things like company structure, culture, and approaches to marketing and sales and a lot of other things.  That’s where social capital comes in.

Social capital encompasses all the other things that you need to build a successful company — the contacts and networks, the best practices for sales and marketing, strategies for accessing and using limited capital resources and a lot more.  Innovators, especially those doing it all for the first time face a daunting challenge of assembling their networks and tapping into these soft tools for company formation and success. 

The salesforce.com platform is now ubiquitous and global and it is a shrewd play by the company to begin deploying incubators (more are in development).  Without incubators or some other mechanism to nurture emerging companies in the pre-VC phase of life, there could be an embarrassingly long list of good applications that never made it to the big time as developers would inevitably discover that building an application is not the same as building a company.

For the record there are 32 companies in the first incubator who each paid twenty thousand bucks for the privilege.  In exchange they get a desk, access to all the tools and a lot of help grappling with ideas — technical and business oriented — that some have rarely dealt with before.  The close quarters foster inter-company cooperation and idea sharing.

Surprisingly many of the companies don’t qualify as start-ups they have names like Bluewolf, Centive, Eloqua, Pervasive, and Xactly.  Companies like this take advantage of the incubator to get a ringside seat at the hub of the on-demand world and to rub elbows and trade ideas with the people who make the secret sauce.  The knowledge they pick up at the incubator can be invaluable. 

For example, Centive, a compensation management company got a head start embedding Adobe Flex tools in their product thanks to its membership in the incubator.  That got the company some valuable PR when Salesforce.com and Adobe announced their alliance a week ago.  Everyone can use a little help in the social capital formation area but I expect that, over time, established companies like Centive will be the rarities at the incubators and more companies like Portaga (travel services) and StakeWare (battling global warming) and InsideView (sales effectiveness) will take their places.   

I also think that the incubator concept will prove itself here in the US but I suspect its greatest impact will be in other parts of the world where the cost of traditional innovation — computers, operating systems, middleware, databases, and more — are too high to enable the kind of dynamic entrepreneurship we are seeing in San Mateo.  This will likely result in new applications for the global market but it will also fuel the emergence of local software companies with solutions tailored to local market needs.

The more I think of it, the more I wonder what might have happened to the Internet bubble if the incubator had been in place at the beginning of the decade.  Alternatively, you wonder if we all might now just pick up where we left off.

What a dump!

That line was used by Bette Davis in the 1949 movie “Beyond the Forest” and was reprised by Edward Albee in (I think) the opening line of his play, “Who’s Afraid of Virginia Woolf,” which was made famous by Elizabeth Taylor in the film version circa 1966.  In any event, it was all I could think of when visiting a web site to buy a T-shirt for my wife. 

The T-shirt was advertised in the women’s magazine, “Marie Claire” and it is part of a campaign to feed hungry kids, the idea being that the exorbitantly priced article would generate profits to accomplish the goal.  My wife is a sweetheart about stuff like this and she suggested it as a gift for Mothers Day or her birthday — the two run together.  So I said fine.

I dutifully followed the directions printed in the magazine and went to the web site where I ran into Bette Davis and Elizabeth Taylor.

Now, I am a guy and like many guys I know I can’t buy for women because I need hard data — measurements, not sizes that are so flexible they are the economist’s definition of fungible (sorry, you’ll have to look that one up).  But I figured I was on solid ground needing only to order a size small T-shirt, even I could do that, I reasoned, but I was only partly right.

The magazine referred me to a place on the web site that — surprise! — didn’t exist, the “charity link.” 

Ok, I said, this is a women’s magazine and I am probably just exhibiting normal male pattern blindness which recurs whenever I have to do something that should be logical but is not.  It also perfectly complements my male pattern deafness (which seems most acute whenever the Red Sox are on), so, my solution was to go to the site map.  Unfortunately, the site map deals mostly with astrological forecasts from what I can see and I didn’t need one in the same way Bob Dylan never needed a weatherman, but I digress.

Eventually, I found the link I needed hiding behind some other word like “donations” and found the T-shirt only to discover that TO ORDER you need to call an 800 number.  So much for e-commerce.

I made the call and got right through to an operator who was only interested in my credit card and the size and it took a few questions to realize that this number only dealt with the one specific T-shirt despite all the other stuff you could theoretically purchase on the web page that referred me to this destination. 

Ok, I surrendered, gave them my numbers and shipping address and we were done, or so I thought.  Foolishly, though, I thought I would give them the benefit of my CRM knowledge and maybe make a few select comments in their customer service or comment areas to help them improve the shopping experience, but even in that I was disappointed.  Customer service was essentially outbound, you could manipulate your subscription and other stuff but the magazine was clearly not interested in establishing a pen pal relationship with its customers. 

Ditto for comments, if you want to make a comment you need to be a member.  Wanna register?  No, thanks, I have a day job writing a blog and other CRM related stuff and I must get to it.  Hearst Publications, are you listening?

What a dump.

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July 2008

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What I'm reading

  • Thomas H. Davenport: Competing on Analytics: The New Science of Winning

    Thomas H. Davenport: Competing on Analytics: The New Science of Winning
    Read this book. I offers lots of insights on how companies are using analytics technology today to manage and most importantly to see the future of their businesses. Recent acquisition of the remaining analytics companies by titans like Oracle, SAP and others shows how important they think analytics will be in the years ahead. Lots of application to CRM. See why. (****)

  • Jen O'connell: Cell Phone Decoder Ring

    Jen O'connell: Cell Phone Decoder Ring
    Full disclosure: I know this author. I like her too, she's smart and a rising media star. Jen O'Connell is going to do for cell phones and other communication technologies what Martha and Suze did for entertaining and finance. It's about time too. If you've ever felt stupid trying to figure out how to use your cell phone or just what the difference is between GSM and the Gross Domestic Product, this book is for you. Full of insights and advice about how your phone works and how to work with your phone. (*****)

  • Eric D. Beinhocker: Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics

    Eric D. Beinhocker: Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics
    Like Paul Ormerod, Eric Beinhocker is another economist exploring the relationship between evolution and the dismal science. Beinhocker is just as readable as Ormerod but offers more research in support of the evolutionary-economics thesis than any other economist that I have read. In dealing with evolution in economics Beinhocker ventures deeply into a new field called complexity economics that does for this field what General Relativity did for physics. I'd read it again. (*****)

  • Walter Isaacson: Einstein: His Life and Universe

    Walter Isaacson: Einstein: His Life and Universe
    Wow! I bought this book in San Francisco and read it all the way home. That's not to say that it's a potboiler, it's biography afterall, but Einstein was one of the great minds of the modern era and it is fun to retrace his life, to understand his genius as well as his all to human foibles. The author also does a credible job of making Special and General Relativity understandable to the average reader. Good stuff. (*****)

  • Al Gore: The Assault on Reason

    Al Gore: The Assault on Reason
    Ok, I try not to be political in anything i do in business but, hey, I consider myself a fairly logical guy and the political environment of the last few years has, shall we say, defied logic. Regardless of what you think of Gore, his arguements are pretty good. (*****)

  • Paul Ormerod: Butterfly Economics: A New General Theory of Social and Economic Behavior

    Paul Ormerod: Butterfly Economics: A New General Theory of Social and Economic Behavior
    Anything by this accomplished economics writer will be thought provoking and entertaining. He's done a lot of work explaining the intersection of economics and evolutionary thought. Economics is, like many social sciences a study in human behavior as much as anything else and this slim volume is a great way to get started updating your thinking about this science. Still think economics follows strict rules and formulae like Physics? Read this book. (****)

  • Geoffrey A. moore: Dealing with Darwin
    Geoffrey Moore has done it again. In this book he takes aim at the ways established companies can effectively compete on "main street". Like earlier books, "Inside the Tornado," and "Crossing the Chasm," which deal with how companies develop into market leaders, this book examines strategies for effectively dealing with the world we live in now, which is not about exponential growth but the indefinite equilibrium point of continuing to understand and meet customer needs. (*****)
  • Fred Reichheld: The Ultimate Question: Driving Good Profits and True Growth

    Fred Reichheld: The Ultimate Question: Driving Good Profits and True Growth
    Fred has been studying loyalty for a long time and he has championed ideas like the Net Promoter Score (NPS) which is a simple measure of whether your customers are happy and willing to tell others about you or not. Great companies have high positive scores, others don't. A simple idea that has a lot of traction. (****)

  • Lynne  Truss: Talk to the Hand: The Utter Bloody Rudeness of the World Today, or Six Good Reasons to Stay Home and Bolt the Door

    Lynne Truss: Talk to the Hand: The Utter Bloody Rudeness of the World Today, or Six Good Reasons to Stay Home and Bolt the Door
    Yes, it's a book about manners, though not the kind to give any guidance about your salad fork. This is about impersonalizing influences in our lives. At the top of the list is technology. Without talking about CRM directly, Truss makes more than a few valid points about how technology associated with CRM is driving us nuts. Automated phone systems come in for a hit but so do surly store clerks, and, sadly, our fellow citizens making use of the public commons. In its own humorous way, it gives a lot to think about. (****)

  • Eric von Hippel: Democratizing Innovation

    Eric von Hippel: Democratizing Innovation
    First, you can get this as a free download if you don't mind reading a book in PDF. It's worth reading too. Von Hippel looks at some of the things we don't do with customers right now that we might want to do. For example, "free sharing" might sound a bit dorky but only until you realize that he's really taking about co-innovation -- asking the customer about needs before building product. Given the fact that something like 80% of the 36,000+ new products that hit the shelves in 2005 were projected to fail, this guy might have a point. (****)