Dances

Marrying the Elephant – Preparing for the First Date

Are you ready to be asked out?

Can you convince the elephant you are a way for them to quickly reach their goals – quicker than their building it themselves? 

Can you make a convincing case you can save them a few “lost years” developing rev 1 and then rev 2 – before they have a competitive rev 3 product?  Can you make the case acquiring you is a way to leapfrog internal development and their competition? 

Can you clearly state why your technology is better than your competitors? 

You can be assured the elephant will do both a make versus buy analysis – as well as consider what your competitors have to offer.

Are you pretty (or handsome)? 

Take a step back at look at the technology, team and company you are building and consider any “warts” you might have – from the elephant’s point of view.  It’s hard to take a step back and view your company – your baby – objectively from the elephant’s perspective – but you need to do it or you seriously risk getting blind-sided by the elephant having a point of you don’t understand and puts your company at risk.  Many companies get “professional help” evaluating their position as an acquisition candidate.

It’s time for a bit of corporate introspection and psychoanalysis.

Do you have products that elephant doesn’t value because they have similar products?  Overlapping products will best case lead to your placing a higher value on your company because of the products and sales of overlapping products – overlapping products the elephant may place little to no value in (not strategically important as they have a solution already.  Worst case an elephant may avoid talking to you about an acquisition at all because acquiring a company with overlapping product lines could lead to an expensive (for the elephant)  investigation by government entities that regulate competition (such as the Federal Trade Commission in the US and the European Commission on Competition in the EU).  Want to look attractive to the elephant? Minimize overlapping product capabilities.  And do it before you get the elephant thinking acquisition as they might find your competitors product offering more to their liking.

Do you have contractual problems (from the elephant’s perspective)?  Elephants have lawyers and financial teams that will make sure you are beautiful without your make-up on.  They’ll take a hard look at your company looking at third party technology licenses, royalties you pay, patents you hold, sales agreements you have, company ownership and more.  The legal and financial reviews are not about proving you should be acquired – but about looking for legal and financial reasons you shouldn’t be acquired.  If you have legal or financial complexities, you need to get them cleaned up before engaging the elephant in a courtship dance – or again you risk getting the elephant interested – but their finding one of your competitors more attractive.

Do you have great technology and people?  As mentioned before, elephants buy small fast growing companies because of their technology and people.  Will you look better than your competition under the harsh glare of stage lights?  What might you do to look better than your competitors when the dance starts (as mentioned above, product line alignment, legal and financial “cleanliness” will help).  Interestingly the elephant may financially justify the acquisition in some part on your products and revenue stream – but reality is within a year or two of an acquisition – it’s all too often just base technology and people that maintain value.

Marrying the Elephant - Getting in Shape

 Before you take the first step to “get noticed” by the elephants (or several elephants) – you need to “get in shape” or you risk getting the elephant interested in a marriage – but with someone else that is more attractive then you are.  Take a step back and consider what the elephant wants most – what the elephant values most.  And you need to consider this at several levels as elephants are big organizations with different people working for the elephant having different motivations.  Assuming you are a “start-up” – a small company that is pursuing rapid growth by riding an elephant,  you likely have just two primary values to an elephant – industry and technology expertise.  It’s likely the elephant see’s little value in your marketing or sales organizations – as they have their own order of magnitude larger marketing and sales organizations.  Your value is helping them get to market fast with competitive technology and with a management team that knows the ins and outs of the market.

Depending on your technology, the elephant may see you as a way to add a new set of features to an existing offering, extending their product or services line or as an entree into a new market they want to enter sooner or later. So sit back and consider what the elephant would view your company as providing them – which will also let you know who to talk to on the elephant’s staff.  Is your offering a new feature set for an existing product the elephant has been selling for years?  If so, you need to start talking to a Product Manager first.  Your technology is a product line extension – a new product the elephant can sell to their existing customers?  You need to be talking to a Product Line Manager or a VP that manages the elephant’s investments in the industry your product would be attractive to.  Is your offering related to the elephant’s current products – but in a new (for the elephant) industry?  You likely need to catch the interest of an Executive VP, President or CEO.

Are you ready to be asked out on your first date?

Before you make that call and ask the right person on the elephant’s staff for a meeting or out to lunch, are you ready to have that discussion?  More about “preparing for your first date” in my next blog post.

Marrying the Elephant – Introduction

Have you thought about marrying the elephant? What it would take for the elephant to acquire your business or some of your apps?

The next several blog posting will take a step by step look at how one can pursue marrying the elephant – which you’ll find very much like really get married – making one’s self attractive to the elephant, getting noticed, the role of parents and match makers, getting to the proposal, how to avoid getting left standing at the altar alone, and steps that will make for a successful marriage. 

First – most marriages (mergers) don’t happen by accident.  Most happen because the acquiree takes specific steps to court the acquirer (the elephant).  So if you are thinking getting married “would be nice” – but are not taking specific steps to make it happen – don’t be surprised if nothing happens.  The elephant has lots of beautiful people courting him – and you are just one in a large crowd.

Also think about what the likely best timing of a marriage is.  You might be building a business in a niche market=r that the elephant may never look for a bride in.  Or you may be in a market that elephant is likely to want enter sooner rather than later – so you are in a race to marry the elephant before the elephant starts the courting process on their own – and starts playing the field with all your competitors.

Next blog post will be about how to get your company in shape – making you attractive to the elephant – more attractive than the other girls (or guys) also playing the field. 

Pigs Don’t Fly – But What About Elephant’s in the Cloud?

My apologies being a bit late getting a blog posting out this week.  I have been busy pulling together several demos of software partner apps from the Autodesk Exchange Apps store to present at Autodesk’s upcoming Technical Academy (in Dallas in just over one week).  My doing software partner app demos in front of what could be near two hundred “professional” demo jocks and jockettes (all Application Engineers working for Autodesk and Autodesk Authorized Resellers) has me scrambling to not look foolish.  Though I am pretty good showing off AutoCAD (if I may say so myself), showing off software partner apps for Autodesk Inventor, Revit and Civil 3D, products I seldom touch, and all in one 90 minute class, is a real handful.  I may even demo a software partner app for Autodesk Maya – a too cool and entertaining partner app and demo that has me speaking into my computer microphone with a character then lip synching in near real time. But I’ve never touched Maya before – and of course that means I have a bit of thrashing in front of me as I learn Maya basics.

Of course I need to show the Application Engineers a few partner Cloud and Mobile apps too. 

See my problem? 

All this has me writing my weekly blog entry on a Friday evening.  Lucky for me I have a great team “hand feeding” me this cool – and in most cases free to our customers - software partner technology! 

The Opportunity to Dance in the Cloud

The design and engineering software (and now web services) industry is still grappling with how to best leverage the Cloud – from the basics of what you can do with Cloud technology to what the future ”killer web services” will be for design and engineering customers. Yes this is already old hat in some industries – consumer, ERP, and more – but graphics and processor heavy design and engineering are coming late to this party.

Because of the historically “heavy” nature of design and engineering software solutions, the elephants are not of one mind – which is a direct reflection of their customers being unsure too.  Some of the elephants get it and some say they get it – but not all have fully embraced the Cloud (something about the inertia of large organizations).

This is understandable when there is a major industry shift – not along just one axis – like price performance – but along two axis at the same time – price performance and collaboration (how designs are communicated and shared).

Confusing things are industry pundits who at one time where thought leaders – but many of which are also less then sure the role of the Cloud will play.  They give elephants plenty of excuses to wait or move slow – or for some of the elephant’s employee’s to drag their feet while others are pursuing dramatic change.

Have no doubt, the Cloud creates a once in a decade (or so) great opportunity for small start-up software developers to innovate – and position themselves for acquisition by an elephant struggling with the difficulty of driving change from within.  There is no faster way for an elephant to accelerate change within their organization then to bring in new people, new thinking, and new approaches through acquisition.  Are you pursuing this once in a decade technology shift (PC in 1977, Internet in 1995, and now the Cloud in say 2007) – or are you still investing most of your time, money and efforts in desktop solutions?  There is nothing wrong with desktop solutions - but it’s not where the big opportunity is to create big value in a short period of time (whatever you think of Facebook’s recent purchase of Instagram for near a billion dollars, even if Instagram created ten million dollars of value in their two years of existence, that’s a lot of value creation in a short time).

Unsure?  I have two boys in University.  Should I advise them to pursue a career in desktop software – or in Cloud and Mobile based solutions?  Where would you advise your children (if you have them) to pursue a career?   

Have you noticed the Cloud and Mobile based technologies Autodesk has acquired in just the last year?  Horizontal Systems, Instructables, Pixlr, and more.

Lots of opportunities for innovative software developers to create, and monetize, great value by dancing with the elephants(s) in the Cloud. 

Sales Channels – And Can the Elephant Help? (Part 2 – Marketing Driven Sales a la the Web)

So in my last blog posting we looked at Selling Driven Sales – where sales growth comes primarily from increasing investments in Selling – including “Direct 1 to 1” and Indirect 1 to 1 (Value Added Resellers).  Selling Driven Sales typically being products with prices north of US$ 3,000 - where one can make money with high cost high touch one on one sales (yes this price point varies by country – and can be quite lower in the BRICs). Now let’s take a look at Marketing Driven Sales – where sales growth comes primarily from increased marketing investments – and where products typically sell for well under US$ 1,000.  [What happens to products that sell in the “no man’s land of US$ 1,000 to US$ 3,000, that’s a story for another day]. Marketing Driven Sales mostly being products where customers sell themselves by reading marketing and social/community information (Word of Mouth).

• Direct 1 to Many (your web site)
• Many to Many (app store)

 Marketing Driven Sales

 Direct 1 to Many (Your Web Site)

Long ago in what feels like a faraway place, they called Marketing Driven Sales was primarily about advertising – whether in a magazine, on TV or US Mail.  Today it’s all about the Web. One markets ones solutions direct to users through mass emails, web banners (ads), Google Ad Words, and “working” the Social and Community sites (Forums, Blogs, Facebook and the sort; modern “Word of Mouth”).  You get the customer to your website where they can learn in just a few minutes if you have a solution to their problem.  Needs to be a quick, easy and obvious problem – and a quick, easy, and obvious solution. You have a one paragraph read to hook them, maybe another ten minute read to close them – with links for the still unsure to Social and Community web sites that praise your solution (more Word of Mouth) - and they purchase.  Though this was the prominent Marketing Driven Sales method for software companies to take low priced apps to market for the last 15 years – as of late its fading as users increasingly look to “app stores” first.  More on app stores in a minute.  How can the elephant help you develop your Direct 1 to Many sales through your web site?  Many elephants have on-line “third party solution catalogs” their customers browse looking for solutions – and search engines frequently find too.  For small software companies with a handful of employees, getting a few new customer leads per week through the low or no cost elephant software solutions catalog is cheap and easy marketing.  For a large software developer, that needs hundreds of new customer leads per week to feed their Marketing Driven Sales pipeline, these elephant software solutions catalogs “don’t move the marketing needle” – so are more “on their own” driving prospect traffic to their web site.

Direct Many to Many (app store)

Direct Many to Many sales are unique to the web and really unique to industry leading elephants that can create huge customer traffic – folks like Amazon, Apple’s App Store, Google’s Android Marketplace, and eBay.  Like the aforementioned Direct 1 to Many Marketing Driven Sales model, this is about products that can be sold quickly through a short description and maybe a wee bit of Social/Community support.  App store Marketing Driven Sales have a unique advantage over Direct 1 to Many  Marketing Driven Sales in that the “host” is taking some responsibility (explicit or implicit) for the trustworthiness of you – the solution developer. Some prospects that are just not comfortable buying from you directly through your web site – will be quite comfortable purchasing through a host app store – a store they have used several times already with good success.  If the elephant you are or considering supporting has an app store – you also have much easier access to their customers - potentially very large numbers of their customers (why all those developers have apps in Apple’s App Store).  This is also potentially a more qualified audience then you can find through web banner advertising – and lower cost than Google’s Ad Words.  An elephant’s app store gives you the ability to leverage the customer’s trust in the elephant to get a prospect to make that first “leap of faith” purchase from you.  So if your elephant has an apps store, and your solutions can be sold through marketing, use it. 

On a side note, even if you have pricier more complex 1 on 1 Direct and Indirect Sales Driven Sales, you can still use the elephant’s app store to identify new customers by giving away a free or low cost app that only your targeted customers would find useful.  What is a better way to start a 1 on 1 discussion with a potential new customer then right after they had a delightful experience with your useful, simple and free or low cost app they just found and downloaded on impulse from the elephant’s app store? For 1 on 1 Selling Driven Sales, app stores turn cold calls into warm calls.

More Reading…

Phil Morettini just published a great article on “Creating a Distribution Channel Where One Doesn’t Exist” on his “Morettini on Management” blog.   Fits right in with developing a go to market strategy when you have a Selling Driven Sales business model.  I see a lot of new software developers viewing developing a sales channel as a bit archaic – but for a whole class of solutions that require 1 on 1 selling of more complex pricier solutions, a sales channel is a powerful tool.  Autodesk built its business on sales channels – which continues to be a large valuable source of revenue, customer service and delight, and long term competitive advantage.  

Sales Channels – And Can the Elephant Help?

First…

A quick “advertisement”…

My team at Autodesk is running our every other year “DevCamp” this June.  There is both an AEC and Manufacturing focused DevCamp in Boston and Portland (respectively).  These are opportunities for software developers to learn about Autodesk technologies and business strategy in an up close, casual and personal environment direct from Autodesk software engineers and senior decision makers.  Most of the classes are technical in nature, range from beginner to advanced software development, and includes several “getting started” classes on Cloud and Mobile app development.  I will be teaching three “Dancing with the Elephant” classes at the DevCamps too.  Learn more- and join me at “Camp” – here.

Back to Our Topic of the Day

One can write a book on Sales strategies (and some have) – which is not what I am going to do today.  I do want to ask a few questions and provide you a few possible answers to help you develop your sales channels – your go to market strategy.

Two Key Questions

What is it that makes a sales prospect decide to become your customer?

What is the typical cost of getting a customer to make that decision to purchase?

The first question gets to the heart of your sales strategy – and the second question either solidifies or questions your answer to the first question.

Let’s take a look at four ways you might be considering taking your solutions to market:

• Direct 1 to 1
• Indirect 1 to 1 (Value Added Resellers)
• Direct 1 to Many (your web site)
• Many to Many (app store)

Before we jump into looking at these four ways to take your solution to market, we need a baseline understanding of sales driven by Selling versus Marketing activities.

Does that sound confusing? Aren’t all sales driven by Selling? No they are not.

Selling Driven Sales

Products like an Oracle database, ERP system, or CAD system are primarily “sold”.  They require heavy investments in sales personnel – up to 40% of revenue is spent paying your sales people.  Over several weeks or months, sales people educate your target customers on the benefits of your solution and convince customers to invest in your solution.  For reference, most Autodesk revenue today is “sold” (though with some recent success developing a consumer marketing driven business) – whether by VARs or Autodesk Sales Reps.

Marketing Driven Sales

Products that sell through marketing include TurboTax, Quicken, Microsoft Office, and your web browser.  There is very little investment by the software developer in selling – as selling is primarily taking orders and delivering product driven by their marketing activities.  These products are sold through marketing – with up to 50% of revenue spent on marketing – implementing demand creation activities.  Companies like Intuit - with TurboTax and Quicken – have very small order taking sales teams – and very large marketing teams and budgets.  Almost all products sold through the web – not to be confused with web sites that are just “order entry” portals - are marketing driven – be it products for sale through Amazon, Apple’s App Store, Google’s Android Marketplace, eBay and Autodesk’s new Autodesk Exchange Apps store.  Today a marketing driven sale also means a heavy investment in social media – having Bloggers, Tweeters and Facebook authors as part of your marketing team.

Of course some companies have different product lines – some of which go to market be selling and others my marketing.  Autodesk has this today with desktop products being sold – and several Mobile apps sales driven by marketing.

Now we'll group the four sales channels by whether they support Selling or Marketing driven Sales:

Selling Driven Sales

• Direct 1 to 1
• Indirect 1 to 1 (Value Added Resellers)

Marketing Driven sales

• Direct 1 to Many (your web site)
• Many to Many (app store)

So now lets get sales channel specific by asking a few more questions to start sorting out what sales channels will be most important to your success, and whether the Elephant can help you develop them.

Direct 1 to 1

Complex solution that takes weeks of training to get started – and several months to get proficient using?  Solution that takes detailed needs analysis before implementing – and then extensive configuration before use?  High cost solution (over US$ 10k) that requires detailed ROI analysis and several levels of management review and approval?  A solution that takes a number of customer touches over several months to develop and close the first sale – at a cost of sale of several thousand dollars? 

If this sounds like your technology, your go to market strategy is “selling” (versus marketing).  You clearly need to see if you can engage with the Elephant’s direct sales team (if they have one) – and develop a deep understanding of how the Elephant sells, how their sales people are compensated, and what they are incented to sell (and not sell).  Maybe you can engage and leverage the Elephant’s direct sales force – but some chance you cannot (such as your targeting a small narrow niche market the Elephant knows little about) – and are on your own.  The sooner you figure this out – whether you can or cannot leverage the Elephant’s direct sales force – the better.     

Indirect 1 to 1 (VARs)

Solution that takes some training – a few days to a week or two?  Solution that can be sold in a few weeks to a month or two?  Solution that costs over US$ 3k but under US$10k (in the developed world)?  If yes, just like Direct 1 to 1, your go to market strategy is “selling” (versus marketing).  Solution that can be purchased by a customer front line manager – not requiring detailed ROI analysis and several layers of management review and approval?  And… key… solution that is to a “large enough” market that a regional VAR has plenty of sales opportunity “nearby”?  What is a large enough market to interest a VAR?  Assume the VAR has one sales rep and one application engineer that spends a good part of their time selling and supporting your solution which - in the US - would be a cost of sales to the VAR of maybe US$ 300k per year.  To cover a VARs $300k per year cost of sales, would take near US$ 1 million per year in sales of your solution.  Is your market – say in a medium sized city of about two million people like Omaha, Nebraska -   large enough for a VAR to cover their investment in selling your solution?  I fondly talk to software partners I work with about this “Omaha, Nebraska test”. J

If this sounds like a fit for your solution, it’s time to find out if and how you can engage with the Elephant’s VARs (assuming they have VARs).  At Autodesk, we have an extensive VAR sales channel that is highly developed and worldwide.  It’s how most of our solutions are sold.  Many Autodesk VARs carry solutions from Autodesk software partners and there are a number of ways for software partners to connect with Autodesk VARs – from participate in the annual One Team Conference sales partner kick-off meeting to my team providing one on one introductions between Autodesk software partners and sales partners.  That said, developing a VAR sales channel will take a year or two to get started – and a few more years to get fully performing.  It takes patience and commitment – as well as aggressive recruiting.  Over the years, I have seen many partners try to develop a VAR sales channel and fail.  Some because they didn’t invest long enough or aggressively enough – and others because their solution wasn’t a good fit (being honest about answering the questions that indicate if their solution is a good fit for a VAR sales channel). Over the years I have seen several Autodesk software partners succeed developing a VAR sales channel, and retire young.

That’s enough for today…

In my next post, we’ll continue this discussion with a look at the questions to ask to determine if your solution is a good fit for the primarily web enabled “Direct 1 to Many” and/or “Many to Many” sales channels.

Get Out of the Elephant’s Box

First… a quick one… why you are important to elephants… see http://www.fastcodesign.com/1669122/innovation-blindspot-even-your-best-ideas-will-fail-if-you-overlook-the-ecosystem

A recent experience during Autodesk's annual sales kick-off conference – One Team Conference (OTC) -inspired this post – about how too often software partners limit themselves to just what the elephant offers them.

So what benefits does the elephant offer you - a valued software partner?  Listing in a partner web catalog?  Invitation to exhibit at their user conference?  Maybe a place in their app store?  Software for use in development?  Are you thinking “it’s not enough, I need more opportunities; the elephant is holding me back!”?

You are right.  It’s not enough.  So are you sitting there waiting for the elephant to change – staying inside their box - or are you going to climb out of that box and take control?

A real life example… from just a few weeks ago...

A few Autodesk software partners were invited to participate in the annual sales kick-off – OTC – with their own “table top”.  There was only room for eighteen software partners to get a table top – so most software partners were “out in the cold” (they could attend – but didn’t get an official presence). 

The responses to this situation by a number of Autodesk software partners included –

“I wasn’t invited to have a table top at OTC and am not happy about it.  The elephant stepped on me again.”  

“I was invited to have a tabletop at OTC – but am too busy to man it – so though I am attending OTC, I am taking a pass on the tabletop.  It was interesting learning where Autodesk is headed – which I’ll share with the team when I get home.”

“I was invited to have a table top at OTC – but am too busy – so I had one of my local sales people man it.  They barely talked to anyone – and suggest not bothering in the future.”

“I was invited to have a table top at OTC, recognized it was a great opportunity to close several new sales partners from overseas by showing them Autodesk HQ sees me as important, lined up meeting with several potential sales partners from across Asia and Europe, and closed three of them at OTC.”

“I was invited to have a table top at OTC, recognized it was a great opportunity to engage decision makers at Autodesk that might consider acquiring my company in the future, booked times to meet these key Autodesk employees at my table top where I had great discussions with them, caught up with several of my international sales partners I had also pre- booked times to stop by my table top, attended several Autodesk strategy sessions, and am now all set to leverage Autodesk to grow my business and maybe get acquired!”

“I wasn’t invited to have a table top at OTC, didn’t know they were going to have these this year, booked a suite in the conference hotel, I invited all my current and targeted sales partners to stop by and have a few drinks in, closed two new sales partners from overseas – and all for just the cost of a suite for one night and several dozen drinks.  Saved me from having to take a three week flight around the world!”

So now that you have heard six different ways Autodesk partners did or didn’t take advantage of Autodesk’s annual sales conference. Which of the above would have been (or was!) you?

OTC is just one of several large scale events Autodesk holds where customers, sales managers, application engineers, and others from across a country - or around the world - come together to learn and share.  Every one of these events is an opportunity for a software partner to save time and money by meeting numerous Autodesk customers, staff and sales partners at one location in just a few days.  Saving weeks of travel time – and many thousands of dollars on flights and hotels.

Every elephant has several large scale events each year – just like Autodesk does – that can be leveraged by small companies on tight budgets to reach out to sales resources around the world – to further their sales and strategic objectives.  You aren’t limited to what the elephant explicitly offers you.  You are only limited by your own imagination on how you can take advantage of the elephant’s activities. 

And of course you need to plan and do your homework well before these large scale events take place.  “Just showing up” without doing your homework (developing an event, booking meetings, confirming meetings and so on), “hoping” you’ll run into the right people, is as good as not showing up at all.

Last...

The above is a sales oriented examples of people thinking - or not thinking - outside the elephant’s box.  This same “outside the elephant’s box” approach can also be used to reach and influence the elephant’s engineering teams, product management, marketing, senior executives, and more.  Your limits are your expectations and imagination.

Social Media = Word of Mouth

I debated writing about Social Media as so so many people are already talking about the importance of social media – so my writing about Social Media could end up like my striking a match in a forest fire.  At the same time, I see most social media writings pertain to creating Business-To-Consumer relationships – and very little on use of social media in developing  Business-To-Business (B2B) relationships  – the environment I live within – as do many of you.

What follows is based on observation and results – and not theory.  My team and I are still figuring much of this out.  But we have seen several start-ups in our B2B environment make good use of social media to boot-strap their business. 

Back to Basics – Word of Mouth

As has been true for millennia, the number one way most businesses find new customers is word of mouth. Potential new customers don’t know you, have no reason to trust you, are likely to initially assume you shouldn’t be trusted, but what a friend, or just another customer “like them”, says and does is trusted.  Prior to social media, building your business through word of mouth took time – and could take a lot of time if your target customers don’t frequently talk to each other.  In the old days, printed publications often were the next best thing to word of mouth – a way for the experience of one or two customers to reach many people – but in many people’s minds print is suspect because of potentially having hidden motives – such as keeping advertisers happy.

It’s Still About Word of Mouth

Social media is in most part another form of word of mouth – and from a customer’s perspective – a much superior form of word of mouth. They can quickly get a variety of viewpoints from people just like themselves unedited by intermediaries – the “unvarnished truth”.  If they Google you and find nothing but your static website – the customer will immediately assume working with you means they are “guinea pigs” (test subjects) – which all but a few brave customers will avoid.

So you need to as quickly as possible build a web presence where your customers talk about you.  A web presence that web searches by your target customers will uncover your happy successful customers and show the prospect you are a viable potential source of a solution to a problem they are having.  Your web site doesn’t fill this need as the customer knows you are not going to give them insight into the hurdles and limitations in your solution.  They want/need word of mouth information on you before they trust you enough to invest time contacting you.  Plus your web site will get relatively little traffic compared to a good social site.  What customer would visit your web site every week or month for years – like they would do a good social property?  So your web site leaves you on the fourth page of a Google search – where a good active social property gets you on the front page.

Which social media to you develop first – that will grow your business through trust creating word of mouth?  Discussion Groups?  Blogs? Facebook? Twitter? 

For B2B relationships, we’ve found Discussion Forums and Blogs to be the most effective tools for creating trust based on word of mouth.  Over time, both Discussion Groups and Blogs create a large amount of “searchable/findable” material and repeat traffic that will get them 9and you) listed near the top of a Google (or Bing) search by your target customer.

Discussion Groups

Discussion Groups enable prospective target customers to quickly see how your existing customers are doing with your products and/or services in a form they can trust.  They can see what problems and hurdles are – while also seeing what the answers are – from you and other customers.  If you have a significant “problem/limitation” with your product/service, they’ll see it.  If there is little traffic on your Discussion Group, they’ll see that too – and know they are working with young technology.  Yes there is no hiding in a Discussion Group – but that is why it’s so effective – an accelerated one-to-many form of word of mouth.  So whether you already have an ongoing business, or are about to start one, be sure to start a Discussion Group as soon as you can.  It will be one of your best sources of new customers.  It will also be a great source of customer feedback to help you steer your development direction. Last, you need to actively moderate the Discussion Group, and need to do it with a “light hand”.  Sure you can remove “mud-slinging”, but if folks say something negative, you need to answer it – and not hide it.  It’s all too easy for potential customers to “smell” a Discussion Group that is managed with a heavy hand – making it more of an advertisement then a source of truth by word of mouth.  Great answers to hard questions in a Discussion Group are very powerful convincing potential customers you can be trusted and are worth engaging with. Discussion Groups are a modest investment of your time – and you should expect it to take six plus months to develop into an effective tool that pulls in new customers.

Blogs

Blogs are a great way to provide potential customers insights into what your technology is all about – from benefits to successes to applications to working around limitations. The informality of Blogs makes them more trusted.  The customer questions that come from Blog postings are a very effective form of word of mouth.  A Blog enables you to create a virtual relationship with many many current customers – that will pass your writings on to their friends (word of mouth) – while enabling potential customers to learn more about your solution and see what “kind of people” you are to work with (i.e. build trust). Blogs are a big investment in time and effort.  We find it requires at least one posting per week – if not two or three – to build significant viewership.  It can also take near two years to build an effective lead generating Blog that is creating relationships and awareness of what your technology is all about, showing your customers are being successful with your solutions, building up content and traffic that gets you near the top of a Google search, and delivering potential customers that “word of mouth” experience that is the basis of their trusting you enough to invest in your technology.  You are thinking “two years” – you have to be kidding? Sure there are Business to Consumer Blogs that grow very quickly – but B2B blogs take more time because word of mouth moves slower in a B2B environment.

How About Facebook Twitter and Other Social Media?

I don’t know.  We are still learning how other Social Media can be used effectively in a B2B environment.  A few of my team members are using Twitter but it’s hard to say how effective they are developing new relationships.  Many of us are struggling with Facebook (and Google+) being first a personal “friends and family” tool – and unsure how to effective use in a B2B environment.  We’ve had some successes with YouTube – getting partners and customers to provide videos – as another source of word of mouth truth – but the volume of viewers of these videos is still modest.

Final Words

If you are a small software company looking to build your business, I without reservations strongly recommend you develop a lively Discussion Group and Blog.  It takes modest time/effort to moderate a Discussion Group – and quite a bit of work to maintain a lively Blog – but you need to do it.  They will absolutely pay for themselves by finding you new customers through tried and true word of mouth.

Elephants and Termites

As a small company, you and your team are very focused on the needs of your target customer needs, and making product and services improvements that delight these customers and grow your sales.  Very clear.  Isn’t that the same for everyone?  Isn’t the elephant very interested in the ability of your solution to delight their customers and grow both you and the elephant’s sales?

In a Termite Colony (or bee hive or ant colony) there are a number of specialized workers.  Some termites spend their day looking for new sources of food – basically “scouting”.  Other termites actually take the food back to the colony.  There are yet another group of termites that take the food – and use it as fertilizer for the garden they are growing under the ground – the garden that is their real source of food.  Then there are the construction workers that are making the termite mount, the nannies that are tending the eggs of the next generation, the queen laying the eggs and several more specialized roles. All these different roles are filled by termites that are physically quite different – large, small, oversize mandibles, and so on.  It’s very obvious sand easy to see the differences in the various termite worker roles.  So what does this Discovery Channel discussion have to do with dancing with an elephant?

The roles of individuals that work for an elephant are very similar to the termites – they have different roles, different skill sets and different goals and motivations.  What is hard is all these elephant employee’s look the same – and look like you too.  It’s easy to make the mistake and think they should think and behave much like you do. 

They don’t.

What is the focus and motivation of the elephants marketing people?  Isn’t it to find new customers to grow revenue?  It might be – but it’s also very possible that their goal – that their manager asks them to report on every week – is the number of new sales leads they produced.  Does this marketing person understand the customer’s needs?  Not necessarily.  Do they have a way to measure the quality of sales leads?  Maybe, maybe not – and their manager may be goaled just on numbers of new sales leads – and not quality (which we all know can be tricky to measure). If you engage the elephants marketing people, do you know how they are being measured?  What will make them and their manager be able to say they met their goals at year end (goals that drive their compensation)? 

How about engaging the elephant’s sales reps?  Aren’t they focused on driving customer sales?  Do you know how they are compensated?  Sales people can be compensated on named accounts – so accounts not on their named account list are of no interest to them as they do nothing to help them meet their quota.  Sales people can be compensated on all sales within a geographic region – so sales outside their region are viewed as a distraction.  They may be compensated for sales of specific products – so sales of other products are an annoyance – or even viewed as competition for the customer’s limited budget.  Does the sales rep expect what they get compensated on to change every year or two – which will drive near versus long term sales efforts?  If your product or service has a six month sales cycle, and it’s the elephants fourth quarter, and they know the customer you want to work with them on may not be theirs next year, should it surprise you they ignore your reaching out to work with them developing a large long term sale?

How about the elephant’s Product Managers – those folks that steer the direction of new product and services development that you are leveraging?  Are their goals – what will make their manager say good things about them and give them a raise and promotion – about meeting a release date, growing revenue for their product or service, or some sort of “customer delight” score?  Will they not care about a product or service another Product Manager is working on?  Will they view other elephant Product Managers as their competitors for marketing investment and sales focus?  Are they likely to be the Product Manager for the same product or services for several years so are interested in long term investments that you might present them?

What are the motivations of the elephant’s staff that manage partners like you?  Is success “just” the number of new partners they recruit (retention and quality matters less), total number of partners they manage (retention matters more and quality matters less), sales driven by partners (quality may matter more than numbers), partner’s response to quality of service surveys or…?  Would you be surprised to learn the elephant’s partner managers are focused on their goals for the year that their manager will “judge” them on – and that drives their salary increase and potential promotion?

How about senior managers for the elephant?  What are their success factors and goals?

So to get to the point, don’t make assumptions about the success factors for the various “specialized workers” at the elephant.  Just like the termites, they have specialized roles, skills and success factors.  If you want to effectively leverage, influence and maximize your benefits from working with the elephant, you need to intentionally and quickly find out what success is for the individual elephant’s employee’s you are talking to and working with. 

How do you find out what the success factors are for the elephant’s employees – what is motivating them?  What is motivating them “personally” (which is all that really matters when you are trying to get help from them – help they can choose to give or hold back)?

Ask them.  Just ask them.  Directly ask them what success means to them.  Ask them what their manager expects them to deliver over what period of time.  Ask them what their priorities are.  Asks them where the opportunity to work with you fits in their priorities and deliverables, and what their managers view is of their investing time and effort working with you. 

You can use these answers to determine if you are working with the right people (or are not and should pursue someone else – minimizing lost time and thrashing).  Knowing their success factors and motivations will help you explain to them how working with you will help them meet their goals and succeed.  The elephant’s employees are very much like your customers, you need to explain the benefits of helping you – selling them on not just the benefits to joint customers, but also the benefits to helping them met their personal goals and career aspirations.

Last…

Most (but not all) people love to be told that you are interested in helping them succeed – and the best way you can help them is having a clear understanding of what their success factors are.  It shows you care about their personal success.  Though it may feel a bit personal to ask an individual what their goals are that they are being measured against by their management, once you get them started talking they are very likely to tell you more than just what their goals are – but also what their challenges and frustrations are.   Knowing the goals challenges and frustrations of “all the elephant’s men” puts you in a great position to fully leverage the elephant.  You can take what was a mysterious uncertain and apparently random dance with the elephant (that is all elbows and stubbed toes) and turn it into a tightly choreographed dance to the delight of your customers and investors.

Termites do it.  So can you. Just ask.

My Trying to Dance with Two Elephants – A Recent Personal Experience

These last few weeks I have been the person trying to dance with a large and small elephant at the same time – or at least sort out which elephant is worth my really dancing with (my investing my team’s time and efforts integrating  Autodesk technology with their technology).  Names removed to protect the innocent – though it sadly protects the guilty too.

The large elephant is the leader in their Cloud based industry.  They are a company I know very well having consulted with them a bit several years back on how to start developing a partner program and ecosystem of third party software providers adding value to their then young Cloud platform.  I hadn’t talked to them in several years and my contact at the elephant from years back had left – so I contacted them just as any of you would – as an unknown (to them) “newbie”.

They are located in my area so we had the first meeting face to face – getting situated with how we work with them and the basics of their Cloud technology and APIs. 

The first meeting was disconcerting to say the least.  Though they had three people in the room, and though they were happy to tell us all about their partner program, they knew next to nothing about how their technology worked.  It’s nice to know what their partner program is about – but we needed to know if integrating our technologies was possible at all, how much we might have to learn to do the development (the character of their APIs) and what resources were available to us to start the technology learning curve.  Ideally we would have determined in this first meeting if what we hoped to do was easy or hard and what development skills were most needed.  This would help us sort out which of my engineers was best suited to research and prototype the integration – which would allow us to make a rough estimate of the investment we would need to make to bring the integration to market.  If it turned out to be a modest investment, we would move forward.  If it turned out it was going to be a too large, too difficult or too uncertain development effort, we would not move forward.

When we asked if they could bring someone technical into the meeting, they said no.  They then talked about how difficult it was for them to get technical resources to work with partners as they were all busy working on customer requests.  They seemed to be talking to themselves – not us.  The said all the technical information and support available was on their web site – and that’s what we had to work with.  They didn’t say it directly, but the message we were getting was “good luck – you are on your own.”  It was clear there was an organizational rift within the large elephant between the partner program people and technical resources.  As a potential partner this meant an overly long learning curve – and we would be in big trouble if we ran into a difficult technology hurdle that we needed help sorting out (never mind the possibility we run into a bug that needs fixing for us to move forward).    So though they were the large elephant in their industry, we shook our heads and moved on to the small elephant.

And what a difference. 

The small elephant met with us in our office where we learned about how they work with and support partners – and the basics of how their technology and APIs work.  Keep in mind these are Cloud technologies which we are learning and the elephants are experts in- so we had lots of questions and “basics” to learn.  We learned a lot in this first meeting which gave us confidence to take the next step.  We then had a follow-up conference call with the small elephants partner program manager, product manager (with a deep understanding of their customers), and software engineer.  We reviewed what we were thinking of doing, what they thought would be most valuable to their customers, what was likely straight forward to implement, what was likely hard to implement, and how to get started.  They set us up with a “sandbox” account within a day, pointed us at learning materials, and gave us a technical contact to call should we have questions.  At this point we had the answers we needed to get started, were reasonably confident we could prototype the integration in just a few weeks, knew the best engineer on our team to assign to do the work, and most importantly had the names of two people we could call if we found ourselves thrashing or in a pinch. 

So here we are actively working closely with the small elephant – with the large elephant put out to pasture (at least for now).

Will the large elephant regret their “sending us off” to work with one of their largest competitors?  I would think and hope so – but maybe they won’t.  Will I regret not pushing the large elephant harder?  Maybe – but part of my thinks the dysfunctional nature of their organization will likely lead to their maintaining their position as the large elephant (though maybe it’s just their partner program team that is dysfunctional).  Is the small elephant taking advantage of the large elephant’s dysfunctional partnering program, people, and processes?  Absolutely.

This experience was a reminder to me that partnering between elephants and small innovative software companies is at its core a 1 on 1 process/experience.  It’s not about a partnering “program”.  It’s all about developing a trusting relationship between the dancer and the elephant.  The dancer knowing they can reach out to the elephant for help – and they’ll get help.  The elephant knowing the dancer is serious about developing a new solution and business – so investing time and effort with the dancer is a good investment.

Saturday night I am off to Autodesk's annual "One Team Conference" (OTC) in Las Vegas.  OTC is basically a beginning of the year worldwide sales kick-off meeting for Autodesk.  There will be well over two thousand people attending with about half Autodesk sales staff and half Autodesk sales partners.  There are also a number of Autodesk software development partners attending - those targeting Autodesk sales staff and Authorized Resellers as part of their sales strategy.  Being able to reach almost the whole Autodesk sales ecosystem worldwide in a few days while never leaving the hotel - instead of flying around the world for a month eating bad airplane food and staying in cheap hotels while taking phone calls from customers at odd hours and dodging phone calls from an unhappy spouse - is goodness for many of our software parthers (me too!).  

Though I have spent too much time in Vegas over the years... and am at the "end" of the Vegas three stage emotional roller coaster (Shock and Awe, Disgust, and Resignation).  The opportunity to meet many of my software partners face to face helps keep me going back.