Software as a Business
Geospatial World, April 2011 p33
Enterprise-level solutions are the norm in the mainland China and occupy about 50% of the GIS market.
Crossing the chasm, p50
The consequences of being sales-driven during the chasm period are, to put it simply, fatal. Here’s why: The sole goal of the company during this stage of market development must be to secure a beachhead in a mainstream market— that is, to create a pragmatist customer base that is referenceable, people who can, in turn, provide us access to other mainstream prospects. To capture this reference base, we must ensure that our first set of customers completely sat- isfy their buying objectives.
From Crossing the Chasm:
At RMI we call the building of market relationships market relations. The fundamental basis of market relations is to build and manage relationships with all the members that make up a high-tech marketplace, not just the most visible ones. In particular, it means setting up formal and informal communi- cations not only with customers, press, and analysts but also with hardware and software partners, distributors, dealers, VARs, systems and integrators, user groups, vertically oriented industry organizations, universities, standards bodies, and international partners. It means improving not only your external communications but also your internal exchange of information among the sales force, the product managers, strategic planners, customer service and support, engineering, manufacturing, and finance.
Basic questions dealing with fundamentals of products, markets, and strategic positioning:
1. Do you want to be mainly a products company or a services company?
2. Do you want to sell to individuals or enterprises, or to mass or niche markets ?
3. How horizontal (broad) or vertical (specialized) is your product or service ?
4. Can you generate recurring revenue stream to endure in good times and bad ?
5. Will you target mainstream customers, or do you have a plan to avoid "the chasm" ?
6. Do you hope to be a leader, follower, or complementor ?
7. What kind of character do you want your company to have ?
As a startup in 1992, i2 Technologies revenue consists of 89% services and 11% licenses, and in 1994 licenses is 75% of revenue.
An example of a typical revenue breakdown from an enterprise product:
Friday 11 March 2011
1. Can ERDAS Data Catalogue solution be a complementor for DigitalGlobe?
DigitalGlobe's recurring customers must have a lot of imagery, and if ERDAS can work out a deal with DigitalGlobe, for example,
for every customer that has purchased more than 100 images, the customer can buy ERDAS APOLLO with 25% discount, or something similar.
2. GeoEye has its own data catalogue GeoFuse, but it does not look like it sells it out, it is only used to search GeoEye image archive.
Sun 13 March 2011
Five guidelines in Microsoft's strategy to focus creativity by evolving features and "fixing" resources :
1. Divide large projects into multiple milestone cycles with buffer time (about 20 to 50 % of total project time) and no separate product maintenance group.
2. Use a vision statement and outline feature specifications to guide projects.
3. Base feature selection and prioritization on user activities and data.
4. Evolve a modular and horizontal design architecture with the product structure mirrored in the project structure.
5. Control by individual commitments to small taks and "fixed" project resources.
Microsoft strategy to manage the process of developing and shipping products:
1. Work in parallel teams but "synch up" and debug daily.
2. Always have a product you can ship with versions for every major platform and market
3. Speak a common language on a single development site. Continuously test the product as you built it.
4. Use metric data to determine milestone completion and product release.
Toshiba kept track of reused modules and gave out awards to encourage programmers to think about reuse and writing popular modules to channel engineers' energies and creativity.
Credibility Gap for Startup
- Try to get the first reference customer, at almost all costs. First customer can break the catch-22 for credibility gap, as well as provide fund to bootstrap the company
- Sophisticated government customers can help, as long as they see a working prototype, they might be willing to pay for the work to be completed.
- Partner up with an established company which can guarantee continued product/services, even if the start-up goes bankrupt. This partnership can also make new businesses for both established company and the startup.
- Gather network of small investors, advisers, and reference experts to convince potential customers
- Focus on a niche business initially, maybe project customisation/service, which does not require longevity. Keep building up list of customers and try to productize the knowledge from customisation/service.
?? Question is about how to balance between internal refactoring to pay off technical debt
the pressure to add functionalities ??
?? What is the vision and then the "big vision" of a software company ?? -- in today's marketplace, because we have to make money, what's the best way to do it??
Reuters has its own domain used for URL shortening so their links can fit in a tweet:
Maybe we can have erdas as http://erd.as , .as is Top Domain Level Code for American Samoa.
- visible source (instead of open source)
- simple framework like rails started very simple and elegant, but then grew much more complex because people add functionalities.
- successful PHP: wordpress
- GPL loophole, host a SAAS, provide web services using the GPL software, so don't have to distribute the code changes.
- Twitter, del.icio.us, are accessed mostly through the APIs now instead of browser.
- Big gorilla such as Google will never open-source its key intellectual property i.e. search algorithm, but it open sources Android because Android is not their primary revenue stream
TheFunded.com is an online community of over 14,500 CEOs, Founders and entrepreneurs to discuss fundraising, rate and review investors, and discuss strategies to grow a start-up business.
Be a first derivative person, who constantly tries to have a positive Learning variable,
C = G + LT
C is cluefulness, overall measure of your capabilities, expertise, wisdom, and knowledge
G is Gifting, natural cluefulness inherent in our DNA
L is Learning, the rate at which we gain (or lose) cluefulness over time
T is Time, horizontal axis of career path
If we take the first derivative of C = G + LT, we end up with L, and we want to make it higher than 0, meaning we keep learning.
April 12 2011
- Target-Customer Characterization The Use of Scenarios
-- A Day in the Life (Before)
The idea here is to describe a situation in which the user is stuck, with significant consequences for the economic buyer. The ele- ments you need to capture are five:
• Scene or situation: Focus on the moment of frustration. What is going on? What is the user about to attempt?
• Desired outcome: What is the user trying to accomplish? Why is this important?
• Attempted approach: Without the new product, how does the user go about the task?
• Interfering factors: What goes wrong? How and why does it go wrong? • Economic consequences:So what?Whatistheimpactoftheuserfailingto accomplish the task productively?
-- A Day in the Life (After)
Now the idea is to take the same situation, and the same desired outcome, but to replay the scenario with the new technology in place. Here you just need to capture three elements:
• New approach: With the new product how does the end user go about the task?
• Enabling factors: What is it about the new approach that allows the user to get unstuck and be productive?
Processing the Scenario: The Market Development Strategy Checklist
• Compelling reason to buy
• Whole product
• Partners and allies
• Next target customer
Crossing the Chasm, pp.101-102
If we are going to succeed in winning over the lower right quadrant, the skeptical pragmatists, then that competition has to be based in market-oriented concerns. That's what the pragmatists care about. In other words, we must shift our marketing focus from celebrating product-centric value attributes to market-centric ones.
1. For (target customer - beachhead segment only)
2. Who are dissatisfied with ( the current market alternative)
3. Our product is a (new product category)
4. That provides (key problem-solving capability)
5. Unlike ( the product alternative)
6. We have assembled ( key whole product features for your specific application).
Software positioning differentiation:
Using more for more, more for same, more for less tactics?