Segmentation: Why Marketing Shouldn’t Write Checks Your Product Can’t Cash

I got a response to this post via email which can be summarized as “Why does differentiation for tech products always have to be around technology?  Most successful companies I know had me-too technology but a laser focus on their segment”.  Good question (you could try commenting on the blog next time – huh, bub?) I agree that folks marketing technology products often focus too much on technology and not enough on other parts of the mix that are potential differentiators, in particular sales channels, pricing models, partner/solution ecosystem and go to market strategy.  Most of the time new products in the technology business start out as technology ideas, not necessarily ideas for a new business or an idea related to an unmet customer need (and I don’t mean technology when I say that) per se. By all means, focus on a segment.  Who are the buyers in the segment?  Understand how the buyers make decisions and who they turn to for advice.  Make sure you understand what pricing and distribution models work for that segment.  Think about the entire ecosystem around the solution. Are their partnerships that would help you differentiate your solution? Make sure your Go To Market plan makes sense.  Where do folks in your segment find out about products?  Who influences their purchase behavior?  All of that is important. But don’t forget that the product has to make sense too.  I worked at a company that tried for years to position their successful large enterprise product to smaller companies by simply dropping the price and making it available through different channels.  The thinking was that...

Cloud Computing and Marketing Hype

Marketing is a mis-understood function.  Sometimes Marketing is the only thing you need to be successful.  Other times Marketing is evil and ruining everything.  Sometimes it seems like both are true statements. Take cloud computing as an example.  Last week Larry Ellison, the CEO of Oracle corp. was quoted as saying: “…we’ve redefined cloud computing to include everything that we already do. I can’t think of anything that isn’t cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop? “…I don’t understand what we would do differently in the light of cloud computing other than change the wording of some of our ads.” While I don’t think Larry is qualified to comment on women’s fashion, when it comes to technology trends it’s wise to pay attention to his opinion.  Is he right?  Is cloud computing marketing gibberish? The answer, in my opinion is yes, and no and either way Marketing is responsible. First you had the cloud computing “platform” vendors such as Google and Amazon.  These folks talked about making a set of interfaces available that allow developers to obtain and configure capacity with automatic scaling and load balancing and “pay for what you use” pricing models. Then things started to get, um, cloudy.  As cloud computing as a term gained visibility, other companies, not wanting to be left behind, began to try to use the term to their...

Segmentation and Differentiation: What is This Thing Anyway?

I has a discussion last week with a friend of mine that's starting a company.  His product has some really innovative technology that came out of a university research project around managing, storing and retrieving data.  We ended up spending almost an hour trying to answer the question "What is it?".  Which of course is just a simple way of asking what is the differentiated value that the solution brings to customers.  At a high level our conversation went like this: Me: So what is it? Him: It's a database. Me: The world doesn't need another database and you won't win against Oracle. ***intense debate interlude*** Him: Well, it isn't better than Oracle at everything but it's better at certain kinds of workloads. Me: Who has that kind of workload? ***intense debate interlude*** Him: Telecommunications companies. Me: So that's not a database, that's a Telecommunications Data Mart. You get the idea.  It's important because how you would go to market for a "database" would be very different from how you would take a "Telecommunications Data Mart" to market.  So easy enough right?  Oh I can hear you now – "tell us something that isn't Product Management 101, April!"  Yeah, I know you guys are like that.  So why am I still having this conversation all the time?  Two main reasons: If we say we focus on A, it means we're not focusing on B – The addressable market for databases is much bigger than the addressable market for Telecommunications Data Marts but let's face it, you were never going to win a significant share of that big ol' database...

PR is Not Marketing and You Can’t Outsource Marketing

Unless you’ve been under a rock for the past few weeks, you’ve read the discussion that is going on around PR and whether or not is necessary for a startup.  Here is a quick summary for you under the rock types: Jason Calacanis says startups should fire their PR company. Steve Rubel says says PR folks need to stop spamming journalists. Michael Arrington says PR as a profession is broken. PR folks fire back saying It’s not just about online, people. Jeremiah Owyang also takes the opposing view and talks about how PR can help some startups. I basically agree with everyone.  Yes, CEO’s can do more PR directly.  Yes, there is too much PR spam.  And, although generally I think hiring a PR firm doesn’t make sense for an early stage startup, I have seen value from working with a firm that has good relationships to help accelerate visibility when a company is growing really quickly. However, I thought there was a dangerous bit of advice in Jeremiah’s piece when he talks about PR’s ability to refine communications.  Specifically: “The entrepreneur without professional communications help may often yammer about how great their technology is, or spend time sharing his passions.  The entrepreneur who has professional communication help often focuses on business solutions, able to talk at the market level, and puts the value statement right up front.” This is the most important job of a marketer in a startup!  If you run a startup and you can’t talk about business solutions, can’t discuss your market, don’t put value statements up front, you need to fire your head of...
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