December 31, 2005

When Should CEOs Focus?

Posted in CEO, Execution, management at 3:21 pm by scottmaxwell

I wrote a recent post on the benefit and practices of focus, but wrote more about how to focus than when to focus. The chart below (of a successful product/company) is meant to expand on that post by showing the stage aspects of focus. Generally, prior to starting a company, and during the initial stages of determining exactly what you are trying to achieve in your product market, you will have a relatively broad scope (so that you can understand the landscape of the various product markets that you are considering as well as the technologies and distribution models that you might deploy). Once you nail down what you are trying to accomplish, you should move rapidly to a pinpoint focus on executing against your goals (i.e., keep your head down and execute). Extra thinking outside of your extreme focus will slow you down, perhaps considerably. As you begin to complete the product and get a few paying customers, you can expand the focus slightly. Finally, as you move up the S-curve for your product, you will need to once again expand the scope of your focus to better understand the market opportunities for continued expansion.

CEOFocus.gif

Three possible traps…

There are three possible traps that you can fall into if you are not careful:

  1. You do not have a broad enough scope before you are clear on what you are trying to achieve. Thoroughly understanding the product market, competitors, technologies, and your capabilities is important to determining where and how you want to play in the market and should give you a greater probability of success.
  2. You do not narrow the scope dramatically once it is clear what you are trying to do. Like focussing the sun energy through a magnifying glass, the right focus will lead to execution and lack of focus will lead nowhere.
  3. You do not broaden the focus once you nail your product market. While this is much less critical than the first two points (I almost left it off the list), you will probably want to continue growing and will need to start looking for new opportunities. (better to err on the side of being late with this point.)

Most emerging growth company CEOs fall into the second trap at some point, so take a careful inventory of your how you spend your time and what you think about…you may be in this trap right now!

Finally, as companies get larger and the company enters multiple product markets, this graph is still valid for the individual unit management. From the CEO perspective, these multiple graphs get superimposed and the CEO’s role naturally gravitates toward the broader scope.

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December 30, 2005

I Want One of these!

Posted in Innovation at 3:26 pm by scottmaxwell

From Deepak at Techworld…a cool new gadget! Perhaps a way to solve my problem with small screen sizes?

December 29, 2005

Think About It!

Posted in Innovation, management at 10:06 pm by scottmaxwell

Do you ever think about what you think about?

Do you think about what you want to think about or what you should be thinking about? Is what you should be thinking about what you want to think about? If not, perhaps you should be thinking about doing something new that requires you think about what you want to think about. You may have a lot more fun…

Do you ever think about how you think about what you think about?

Do you think in a certain way (e.g., linear, creative, or intuitive) or in multiple ways (linear, creative, and intuitive)? If you think in only one way, perhaps you should be thinking about expanding your thinking. You may get more robust results from your thinking…

Of course, you may not want to think at all. If so, perhaps you should do something that does not require any thinking.

Think about it!

Some Resources

December 28, 2005

Top 10 New Year’s Resolutions for CEOs

Posted in CEO, culture, Execution, management at 12:02 pm by scottmaxwell

As the year draws to a close, I thought that I would offer up my top 10 possible New Year’s Resolutions for Emerging Growth Company CEOs:

Choose the most appropriate (maximum of 3) from the list below:

  1. Customer Focus– Telephone or meet with at least 3 customers that you don’t already know each week, for 12 weeks. There is nothing like customer conversations to truly understand the perceptions of your organization (and perception is truly reality). Then, do something useful with the information!
  2. Product Focus– Choose the 1-3 most important areas of improvement to your product that you have known about for a long time (hint: ease of use is one of them), and spend the first 90 days of the year helping your product groups both building the improvements AND build the processes, organization, and staff to make ongoing improvements. Set and meet measurable progress goals by the end of Q1.
  3. Marketing Focus– Choose a (simple) message, and make sure that by the end of Q1, everyone inside your organization recites the message when prompted (this is not as easy as you think and should be measured by random prompts at the end of the quarter).
  4. Sales Focus– Put in place 1-2 new approaches that significantly improve the efficiency and/or effectiveness of your sales funnel, with noticeable improvement by the end of Q1. (for example, pure channel sales can improve their online channel partner support or improve training of the partners. E-commerce distribution could put in web analytics or use what you already have to improve page abandonment or put in a program to reduce shopping cart abandonment. Telesales distribution companies could put in place or improve e-commerce. Field sales distribution could put in place telesales or telemarketing.)
  5. Service Focus– Sit with your customer service staff answering incoming customer service requests for a half day each week for 4 weeks. Use the knowledge you gain to make 1-2 significant changes (e.g., product feature, product usability adjustments, building help into your product, customer self help tools, customer service process step, etc.)
  6. Employee Focus– Take one employee to a one-on-one breakfast or lunch each week for 12 weeks (or until you run out of employeess to take out). Use the knowledge that you gain to make 1-2 significant changes by the end of the quarter.
  7. Strategy Focus– Create 1-3 initiatives from this list, make considerable progress on implementing by the end of Q1 to help increase your competitive advantage.
  8. Financial Results Focus– Take your current plan for Q1 and figure out how to outperform it by 10-15% on the bottom line in the first quarter, by raising the bar on hiring, focussing on better cost management, or getting involved in closing more sales.
  9. Execution Focus– Make sure that each of your direct reports has 3-5 major goals for Q1 with objective measures for success. Make sure that your direct reports do the same thing with their employees. Ask for a regular (at least weekly) review of progress against the activities to nail the goals as well as the results relative to objective measures.
  10. Have Fun– While nailing your goals are important, waking up every day passionate about your work is at least as important. Implement 1-3 initiatives that will improve the amount of fun that you and your employees are having (do it right and your productivity will improve as well).

Happy New Year!

December 26, 2005

Come On Baby, Light My Fire!

Posted in innovate this! at 11:16 pm by scottmaxwell

I build a lot of campfires during my summers in Maine. I always find that the most difficult part is getting the fire started. I generally start by lighting a match or a lighter (what great inventions!), which is relatively easy, but the next sequence of steps has several variants; sometimes lighting a Duraflame log, sometimes lighter fluid, and sometimes a combination of newspaper, dry leaves, twigs, and/or branches, until, finally, the logs start burning (the trick here is to add the type of material that will use the existing energy of the fire to light the next item and to have the next item slightly larger, such that it will give off more energy, then to light the next, slightly larger item, and so on). Using the accelerants (i.e., lighter, Duraflame, lighter fluid) always works best!

It seems to me that this observation on lighting a fire is very similar to getting a community and/or social site (or any other site where value grows with usage) started and then growing. if a site has a good enough set of features and a reasonable user interface, the site needs a starter-set of users. Once the site gets to its critical mass of users, the site’s fire is started, as the value created by the critical mass of users attracts a new set of users that will then add even more value to the next set of users. The ultimate size of the user-base depends on the number of people with continued interested in this particular site vs. other similar sites or other opportunities to use their time.

An Accelerant for building critical mass…

When new real-world social sites like nightclubs get started, they use accelerants such as paying models to come to the club, getting stars of various kinds to the club, making special invitations to connected people, staging an opening night, getting the PR machine humming, and hiring social people to invite their friends and to get the party going. (My take on internet dating sites is that they already do some similar things.)

So here is my question: Is it possible to build an online Community of Community Builders (CCB), say of 1,000 people (perhaps more, perhaps fewer, as it is not clear exactly how many people that you would need)? The goal of the CCB would be solely to select 2 or 3 online start-up communities that they would build at a time by being the accelerants for each of the communities. They would build the community for, say, the next six months or until each community fire was lit (using the appropriate measures for what “lit” means). Then, they would move on to the next community.

Think about taking a piece of land, putting up a downtown, putting up the first set of houses, and filling the houses with interesting people. When the next set of houses were constructed, wouldn’t the vibrant town center and the current community be attractive to you? Probably a lot more attractive than a set of vacant stores and houses!

Once the CCB got going, it might work this way:

  1. The CCB would invite online community developers to pitch their idea and demonstrate their site.
  2. The CCB would vote on the sites that it will support.
  3. A small group from the CCB would help work out the kinks in the site via use and feedback and get the site ready for prime time.
  4. The CCB users would open the opportunity to get involved to the entire group of interested CCB members (with ongoing feedback).
  5. Once the entire CCB community felt the site was ready, the CCB users would then invite their connections into the site (say 10 per member, which could get the community up to 10,000 relatively quickly if the site is interesting enough).
  6. Once this group seemed satisfied, the site could become open to the public (perhaps earlier, if appropriate).
  7. At this point, if the fire is going to start, it should start!
  8. Just as the accelerants of a real fire burn away, the CCB members can retract from the community as the community comes to life (or continue participating, if they continue to be interested).

Some additional thoughts:

  • This approach seems like it would work better than the “build it and they will come” approach (which seems more like rubbing two sticks together in dry leaves to start a fire…It will succeed if you do it exactly right but, even if it works, it is a lot more work).
  • Their would probably be a few “go/no go” decision points for the community to allow for bad ideas or bad execution.
  • Clearly, the CCB would need to get started without the benefit of a CCB.
  • It is not clear if the CCB would need to be more of a walled community or if a public forum would be better (I would opt toward the latter, as it could expand the CCB over time. However, members would probably need to do real community building work in order to continue as members.).
  • The CCB would need to be large enough and heterogeneous enough to allow for a variety of different interests (and would still not cover all of the long tail opportunities).
  • Perhaps after the CCB was successful in lighting a few communities, it might ask for a revenue share or equity allocation in future communities.
  • The economic allocation to individual community members might be based on their relative contribution (with objective measures) to the development of the community (for example, their individual usage, the number of people that they successfully recruit and the number of people those people successfully recruit).

If someone is interested, please feel free to Innovate this! I volunteer to be your second member…

Web 2.0 Mindmap

Posted in Innovation at 6:46 pm by scottmaxwell

Webosphere came up a pretty clever way of displaying Web 2.0 companies…check it out here.

Innovation idea generation…the Web 2.0 Mashup Matrix

Posted in innovate this!, Innovation at 6:15 pm by scottmaxwell

This Web 2.0 Mashup Matrix seems like a great tool for both seeing the current list of mashups and sparking some innovative ideas…

An innovation for older eyes

Posted in innovate this! at 4:17 pm by scottmaxwell

With the trend toward smaller device screen sizes while my eyesight needs move in the opposite direction, I propose that some innovation take place in the optics associated with small device formats. Until the devices can produce 3D holographic images (that can be adjusted to any size), how about allowing for some adjustment to the optics on devices? it seems to me that a simple “snap on” lens feature (or probably a dozen other ideas such as building viewers into wearable screens or devices with expanding screens) would allow people with different needs to be able to snap on lenses with different magnifications. Also, if the world moves in the direction of the SNL skit (thanks, Fred, for pointing it out, funny stuff), even the younger eyes will need something like this. Perhaps a device manufacturer or even a lens company could aim at this growing segment and become the dominant player (it is a large group with plenty of dough to spend on the device).

Can someone please innovate this!

December 23, 2005

2005 is almost over, Now What?…Predictions for 2006

Posted in predictions at 8:28 am by scottmaxwell

As 2005 ends and 2006 begins, some predictions for 2006…

  1. The tag “Web 2.0” will peak and then go out of style, only to be replaced by an even more debated new tag for consumer internet innovation…
  2. Ajax desktops will be commoditized (perhaps already true?)…
  3. At least one new Ajax development environment will be released that makes Ajax apps super-easy to create and Ajax will continue to accelerate…
  4. The rich client (attached to internet services) will stage a comeback…
  5. Consumer website innovation will continue to increase dramatically…
  6. Internet video will explode…
  7. Some of the consumer website innovation will start creeping into business websites and applications…
  8. Go Daddy will not advertise on the Superbowl game broadcast, but we will all continue to remember the 2005 commercial…
  9. Firefox will gain significant market share over IE and become the browser that consumer sites write to first…
  10. Microsoft will release some really clever “Microsoft Live” components and create a new buzz for the company…
  11. Microsoft search will find an extremely clever way to compete against Google (perhaps as an advertising platform for websites that gives more revenue share to the consumer AND the websites)…
  12. Vista will be later than expected, but will be a hit…as will XBox360 (once people get over the price)…
  13. Both Intel and AMD will have great years…
  14. Salesforce.com will continue to build its B2B On-demand market domination…
  15. Google will continue down the path of becoming a large company and will be a lightning rod for government privacy regulation…Google will regret their “do no evil” moniker as the blogosphere creates unattractive altered versions and discontent grows…
  16. The Apple OS will become the Linux-based desktop operating system that everyone has been waiting for…and Apple will continue to impress with other product releases…
  17. Dell will get hurt as others out-Dell Dell and Lenovo picks up market share…
  18. Sun will start its comeback…
  19. HP will reorganize into a smaller, more focused, more profitable company…
  20. The long-distance wireless internet will pop, but it will be Verizon, not Intel or WiMax, that wins this round…
  21. Blackberry service in the U.S. will not be shut down…
  22. Search will continue to move toward domain-specific (a.k.a., vertical search)…
  23. Social sites will micro-segment as well, as the hosting companies and other service providers put out services for all to use…
  24. Johnny Damon will cut his hair short (actually, it turns out he did it yesterday, as I was drafting this post) and Brad Feld will grow his hair long again…
  25. A zero-day exploit will cause serious damage to computer systems globally…
  26. The stock markets globally will have a great year…
  27. The global temperatures will be either hotter or colder and either way will be blamed on the greenhouse effect…
  28. The upper tier environmentalists will continue to buy hybrids and electric cars while consuming massive quantities of fuel in their private jets…
  29. Personal websites, collaboration, and blogs will grow 100+ percent…
  30. Domain names will become scarcer and prices will rise, perhaps dramatically…
  31. Oil will become plentiful and gas prices will drop…
  32. Vacation area real estate prices will rise dramatically…
  33. Jet Blue will continue to expand…
  34. Bush’s popularity will drop to a new low…
  35. Opticians will have another great year, as eye exams and prescriptions will be up due to eye strain caused by computer screens…
  36. Acquisitions will increase over 2005 and entrepreneurs will be singing the song “were going to party like it’s 1999”
Happy New Year!!

December 22, 2005

How David Can Beat Goliath- Summary of Strategies

Posted in culture, customer service, David vs. Goliath, Economic Model, finance, management, marketing, Metrics, Product Development, Sales at 11:50 am by scottmaxwell

This post is an overall summary of the David vs. Goliath Series and meant to act as a pointer to all of the posts in the series. There are three overarching points for the series:

  1. Emerging growth companies have several natural advantages over larger companies that they can amplify,
  2. Large companies have several advantages that emerging growth companies can minimize, and
  3. Emerging growth companies can (and should) take a series of specific short-term actions that over time will accumulate into a long-term defensible competitive advantage (by amplifying their advantages and minimizing the large company advantages)

I can’t emphasize enough how important it is for emerging growth companies to think through these issues and develop a clear point of view on what they are trying to achieve. Regardless of the long-term goal (a sale of the company or remaining independent), building a defensible advantage will make life much better for you (easier time in the product markets, better growth, better bottom line, higher valuation, etc.). Of course, once you know what you want to achieve, you need to execute against it!

The Nine Major Themes:

  1. Create an Information Advantage. The emerging growth company has the natural advantage of being closer to the customer that the large company. You can truly capitalize on this advantage by taking steps to increase the information flow into your company even more.
  2. Create the Time Advantage. The large company has a disadvantage as it grows, as solid communication between employees gets much much more difficult as companies grow. This communication difficulty turns into a time advantage for emerging growth companies, as larger companies have difficulty doing anything quickly, while emerging growth companies, with their smaller staffs, can turn on a dime. The emerging growth company can take several steps to capitalize on this natural advantage.
  3. Create the Scope Advantage. The emerging growth company has the ability to focus on one product market. The larger companies naturally need to increase their scope in order to sustain growth. The emerging growth company can exploit this natural advantage by staying focused and continuously improving “ownership? of its product market.
  4. Create the Scale Advantage. Large companies have difficulty seeing and/or addressing small markets, even if they are very high growth. This gives the emerging growth company time to establish a foothold in the market as well as create some level of defensibility before the large company enters the market.
  5. Create the Innovation Advantage. Large companies have difficulty executing against certain types of innovation (for example, innovations that cross department boundaries, such as new products with new channels of distribution and new customer service approaches). If emerging growth companies innovate against these natural advantages, they can create an edge against the large companies.
  6. Set Your Operating Point Closer to the Funnel Singularity. This is the strategy of allocating your resources against nailing the customer experience at low price points to the customer instead of allocating significant resources against sales and marketing activities. If you do this well in the right markets, you can create a large, profitable business that is very difficult for the large companies to compete against. This is a classic strategy, but the internet-based sales and marketing approaches now allows the strategy to be executed more aggressively.
  7. Attenuate Goliath’s Strengths. The large company does have some natural advantages itself. The posts below address each of the large company advantages as well as what the emerging growth company can do to minimize the large company strengths (and in many of the cases, create an edge):
  8. Defend Against Goliath’s Attack. No matter what you do, if you are successful then Goliath will eventually attack. These posts address the nature of Goliath’s attacks as well as how the emerging growth company can set up in advance to defend against the attack. I point out that the results of the attack will be determined well in advance of the attack! The two posts are:
  9. Execute Against Execution. All of the prior posts are about what the emerging growth company can do to create a strategic advantage. This post is about how to maximize the pace of your company toward the series of goals that you have set for your company. The higher your pace toward your goals, the faster your company will develop into a large profitable company with a defensible competitive advantage.

I am going to take a breather from this series for now, but I do intend to put together the implications for each department so that some of the more esoteric points will be made more tangible for each functional group. When I post each of the functional implications, I will place a link on this post below so that this post will act as the index of the major strategies in addition to the specific implications for each function.

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