No Risk No Fear – Part 2 (First Steps)

Build a Great Free App (or Two) 

What is a great simple delightful app for your target customers?  You know your customers best so are best positioned to know the answer to that – but it’s has to be simple, easy and delightful for your target users.  Take advantage of the on-line and mobile marketplaces – and customer traffic – the elephants have made for you to get your app(s) in front of your target customers.  Android Marketplace (Google Play), Apple App Store, the new Autodesk Exchange Apps, and others. Skeptical you can sell B2B apps through these market places?  Don’t be.  The volume of B2B apps being delivered through these stores is huge and growing.  At Autodesk, we have a few Exchange Apps publishers with great apps aimed at specific design and engineering professionals getting over a hundred app downloads per week – going from being unknown to having ubiquitous positive awareness among their target customers.  They are creating a steady stream of delighted users that are now looking at their higher cost apps and web services.

Go Term

Do you primarily sell software as “perpetual” licenses with upgrades or maintenance fees every year or two?  That is a Risk and Fear based model with the customer paying a lot upfront when either they don’t know you’ll deliver what you say – or their paying additional seats though unsure if they’ll still need them a year or two later.  The No Risk No Fear approach is term licensing – the customer paying by the month or year. Term is easy for customers.  They buy one month’s worth – and if it meets their needs they keep paying.  They can quickly and easily add users without worrying about if they’ll need the licenses next month or next year.  The customer also knows that you are not “overselling” what your app or services can do – as if you are, they know you will just stop paying next month.  This gives customers faith in what you say and willingness to try your offering instead of going through a lengthy expensive pre-sale evaluation.

So No Risk No Fear includes:

  • Free and low cost apps available in real time through on-line stores
  • Term based licensing

No Risk No Fear

What other No Risk No Fear technology offerings can you think of? 

The future is building a business engaging and delighting customers based on a No Risk No Fear sales strategy and business philosophy.  And No Risk No Fear is a once in twenty year opportunity for a small company to leverage a disruption in the market place to leap over their competition. 


No Risk No Fear – Today's Sales Strategy and Business Model

The following two posts are excerpts from a presentation I have been giving to members of the Autodesk Developer Network (ADN) as part of our annual Autodesk “DevDays” roadshow.  DevDays is where my team presents Autodesk technologies coming out in the coming year to ADN members in 15 cities around the world.  I am currently sitting on an airplane headed to Seoul Korea for the second half of our DevDays tour – North and Central Asia as well as Europe. It’s the two months each year I get reminded what the life of a musician touring is like – getting in front of a new audience in a new city and country every day or two.  It’s a great experience talking to hundreds and hundreds of partners 1 to many and 1 on 1 over a very intense two month period (it can also be exhausting at times).

There is a major sea change taking place in the technology industry.  A shift driven by consumer products and services that is invading the Business to Business (B2B) market.  A shift to what I like to call “No Risk No Fear” business.

It started with the free web services from Google, Facebook, Twitter, DropBox and the sort.  Free email.  Free social. Free messaging. Free storage.   Sure this was all consumer oriented services with little to no impact of the B2B world.  But what we all use daily does change our expectations in a subtle but deep way.  We expect to get good value for free.  And if we want more, for pay, we make that decision based on a depth of experience before ever paying a thin dime – a No Risk No Fear decision.

Free web services can be found in the B2B world in several places already.  Look at how Amazon (AWS) and Microsoft (Azure) are so quick to give any software developer a basic platform for Cloud based web services for a year for free. No Risk

The No Risk No Fear approach to business is not just free but also about cheap.  Making apps and services available at a low cost.  salesforce.com (SFDC) has used this model to become the fastest growing Cloud based CRM service in the world.  Autodesk went from 1 seat of SFDC for $50/month to 10 seats to 100 seats to near 3000 seats over a period of a few years.  No big dollar investment decision was needed till Autodesk had tens of thousands of hours of experience using SFDC in the field.  Compare that to the old “big iron” approach to selling CRM and ERP systems – with all the risk involved for both parties – buyer and seller - personally, professionally and company-wide when selecting a new expensive CRM/ERP system. A $50/month decision versus a $1 million+ decision.  SFDC has made it so easy to get started, No Risk No Fear.One of my staff, an Autodesk Developer Network Evangelist, has his own personal SFDC account he uses for managing his partner contacts.  At $50/month, why not?

Apple and their App Store have taught people to expect a lot of value at little cost too.  Value that might have cost hundreds of dollars per person is now a simple app in the App Store for just a few dollars.  Why take the risk of purchasing a large app when you can purchase several simple small apps that if they don’t work out – who cares?  No Risk No Fear.

For elephants and their partners alike, No Risk No Fear selling and buying means dramatically lower cost of sales too.  Instead of having to invest hours, days, weeks and months developing a sale, giving away or selling a low cost app that delivers the customer immediate value and immediate firsthand experience with your company and technology.  This will greatly accelerate the sales cycle – from a single person using a simple free app to a modest price app to the customer standardizing company wide on your full solution suite.  For a small start-up, No Risk No Fear selling is more powerful yet as it gets around customer fear of using technology from a small unproven company.

No FearA No Risk No Fear approach puts a small start-up on even footing with large established competition.

But…

Your services and apps need to be GREAT.  Customers have no patience for free and low cost apps that are clunky or difficult.  They have not invested enough money to struggle with your service or apps.  It’s just too easy to stop using it and look elsewhere.  Your customers need to get great value immediately. Yes for free or low cost, you need to deliver a great easy delightful customer experience.  Yes your free or low cost apps need to some degree be better and easier than your larger revenue generating offers – as they are your foot in the door, your invaluable first impression.

Next posting…

More about No Risk No Fear. 


Have you poked the elephant lately? If not, you are likely leaving money on the table.

I frequently have conversations with Autodesk partners about how they can best leverage Autodesk.  And almost every time these conversations unearth ways the partner can get greater value from the partnership - leveraging Autodesk to speed up development, reduce development costs, reducing sales and marketing costs, identify new customers, reduce business risk, and develop strategic business opportunities.  With thousands of partners and only eight “Autodesk partner evangelists” with the skills to have these exploratory discussions, only a few hundred partners per year are exposed to the broad deep array of possibilities their partnership with Autodesk creates.

Is this just the situation at Autodesk?  No.

Having talked to a number of elephants over the years, and having studied how they work with partners, it’s pretty much the same story with every elephant – lots of opportunities for partners to engage but not enough high touch 1 on 1 discussion’s looking at how a specific partner can best leverage their partnership with the elephant. 

So how do you get “more than your fair share” of time, opportunities and resources from the elephant?

Be demanding. 

Be the squeaky wheel. 

Take a wee bit of time each week to prod the elephant to see what the opportunities there are to leverage the elephant’s resources. 

Talk to more people Elephant trainer

If you only touch the elephant through their “partnering team” (Developer Relations, Developer Network, Developer Marketing, etc), you are only scratching the surface on leveraging your partnership with the elephant.

Have you talked with one or several of the elephant’s product managers?  Maybe you can get them to prioritize development of a feature, API or web service that would allow you to delight your customers.

Have you talked with the elephant’s PR or Social Media team on a joint PR activity like a press release or a live Twitter event?  How about getting the elephant to include hashtags that point your way? 

Have you talked with the elephant’s marketing team? Show them why it’s good for the elephant to recommend your company on their Facebook page – and you will do the same for them.  Exploring with the elephant’s marketing team what tradeshows they would like to attend but cannot – but would consider providing funding for you to attend as their proxy.

Have you talked with the elephant’s business development team about your solutions – your great new cutting edge cloud and mobile offerings?  They might be just the right people to introduce you to a Vice President that will take a personal interest in your efforts – that could someday lead to your being acquired.  

You are probably thinking “how to I find out the right names of all these different people working for the elephant”?

Your first stop is the developer relations folks (or whatever the elephant calls them) to get a 1 on 1 meeting to explore everyone you would like to reach within the elephant.  They might be able to give you a “roadmap” of people to talk with at the elephant – but if not, don’t stop.  Leveraging the elephant is at times not all that different then cold calling a customer – or finding a new employee. 

Is it worth the time and effort?

Like cold calling, investing time pursuing the elephant can feel unfulfilling for a stretch of time.  But we are not talking about investing hundreds of man hours developing opportunities to partner with the elephant – we are talking a few hours per month on the telephone working and developing your contacts at the elephant.  The elephant has lots of resources– people and money.  What is a significant amount of money for you – say $5k to enlarge a tradeshow presence or $10k to run an AdWords campaign - is a small or modest investment for the elephant.  If you find the right person at the elephant that “gets” how supporting you will help them, they will invest.  Present how supporting you will create a higher return in their investment then “just another internally oriented investment” (which is why the elephant has partners like you to begin with).  Show how your deep industry knowledge, strong customer contacts, leading edge technology or flexibility makes you a great place for the elephant to invest their discretionary dollars.  If you are smart about “working the elephant”, it wouldn’t be surprising to find your return on investment to be in excess of $500 to $1000 per hour.  A lot of money for a small start-up company. A lot of money sitting on the table for the next demanding partner to pick up. 


The Elephant Just Acquired Your Competitor… Yikes!

I write this post right after Autodesk announced the acquisition of a CAM (machining) software technology from a software company in Copenhagen – HSMWorks.  For my team – the Autodesk Developer Network – an acquisition like this means dozens of uncomfortable discussions with a number of partners around the world. In today’s specific case of HSMWorks, I know over 20 CAM partners we’ll be having this discussion with. What is Autodesk doing?  Are we competitors now? What happens to our partnership?  What do I tell my staff?  What do I tell my customers?

Dancing with an elephant will at times make you feel “exposed” – not being in full control of your destiny.  This is never more true than when the elephant you are dancing with acquires one of your competitors.  It is one of those times when you start to think if dancing with the elephant is worth it.  Would you be better off “going it alone”.

Having helped numerous Autodesk partners work through this stressful - acquisition driven – market change, I have found there are typically four responses (strategies) you can pursue moving forward. 

So let’s walk through them.

Ignore the Change Ostrich

Whether betting the elephant’s acquisition will fail, or just not being sure what to do, one continues on with business as usual.  This strategy (or lack of a strategy) usually doesn’t work very well.   Almost immediately both your employees and your customers will want to know what your plans are around the elephant – continuing to dance or?  They want to hear from you and they want some basic answers.  I have seen a number of companies take this approach – making no change in direction – but this usually only works for a few months.  If you don’t have a strategy and answers for your employees and customers on how you will (or won’t) be working with the elephant in the future, the uncertainty will start impacting your sales.  Customer orders will start getting delayed.  Purchases will slow.  You really need a long term strategy that includes a communication and investment plan based on your long term strategy.  The sooner the better.

Embrace the Elephant’s Technology

This is about researching and learning where the elephant is going with their new competitive market offering, and making investments that strengthen your partnership with the elephant.  There are many different ways to embrace the elephant – such as learning what solutions are being pursued and not pursued so you can invest in complementary solutions.  This could mean shifting R&D to niche solutions the elephant is not currently pursuing – but their customers will need.  This potentially sets you up to be acquired by the elephant in the future too (which I have seen happen a number of times). This could mean building up your integration services capabilities so you can profit on helping customers use both your and the elephant’s solutions together. This strategy is not easy to execute on if the elephant’s acquisition overlaps with most of your solutions.

Embrace the Elephant’s Sales Partner

If you are already a “tertiary” player in the market the elephant has just decided to enter – you are not the number 1 of number 2 player – do you have a clear and compelling technology advantage that will enable you to compete head to head with the elephant?  If not, you should consider repositioning your business to deliver Sales and Services for the elephant – evolving away from being a developer of commercial software.  This is can be a very emotional and difficult decision to make – giving up development of a code base that has been “your baby” for a number of years. If you already have a significant revenue stream from services, this change from software developer to sales and services provider may actually not be all that hard to make.  You have valuable customer relationships, a broad understanding of your customer’s needs, and deep solutions expertise.  These are exactly the skills and assets the elephant will value most as it invests in developing their entrance into what for them is a new market. At Autodesk, many of our largest and most profitable VARs started as software development partners – but later repositioned their business as a sales and services organization as Autodesk extended its product line into several vertical markets.  I know several partners that became quite wealthy pursuing this strategy – truly turning sour lemons into lemonade.

Aggressively Compete with the Elephant Fight

Most elephants will continue to provide software partners basic support even though they have become competitors - so you likely will have continued access to the elephant’s technology you need to compete with the elephant.  For example, both Autodesk and Microsoft continue to partner with companies they also compete with.  Competing with an elephant is hard – but there are successes from time to time. Anyone remember Microsoft Money going after Intuit’s Quicken?  Intuit won that battle against the much larger Microsoft.  This strategy could also lead to acquisition discussions with the elephant’s competitors and even some day with the elephant itself.

Go Elsewhere

This is all about changing the direction of your company to pursue different markets where there is no elephant – typically going after a market niche or developing a specialized services business.  This can also mean selling your business to the highest bidder and using the money to retire or start a whole new business.

So…

Don’t Wait

Every company that dances with an elephant needs to spend a bit of time thinking about what they would do if the elephant became their competition.  This doesn’t need to be a detailed plan. It is a healthy exercise that forces you to think through where you are going with your business long term.  Just a wee bit of “disaster planning” can really pay off later – such as positioning your company to be the company the elephant acquires – or enabling you to quickly act upon an elephant’s acquisition of a competitor in a thoughtful effective way that best protects your people, your assets and your customers. 


What are you waiting for? Are you still just developing desktop apps?

Do you have a Cloud and Mobile strategy?  Are you making measured investments developing Cloud and Mobile apps – learning the technology and learning what is attractive to your customers?

Every day I talk to small developers who are still focused on the desktop.  Sure their desktop apps are their bread and butter today – predictably paying the bills year in and year out. 

But. 

Every day they put themselves at risk of being made irrelevant by a competitor or start-up building a Cloud or Mobile based app that delights their same customers – creating a beach head if not a downright revolution – that upsets their ongoing business forever.

Due to the rapid scalability of Cloud and Mobile apps, by the time the “desktop” market leader notices the upstart Cloud or Mobile solution provider, it will likely be too late to recover.  Have no doubt this is an existential threat for every desktop app developer.

Cloud mobile desktopEvery desktop app developer needs to have Cloud and Mobile offerings too – even though the Cloud and Mobile offerings may not yet pay for themselves.  Even if you don’t yet know how to monetize your Cloud and Mobile offerings.  It’s like a farmer planting seeds in the spring when they’ll harvest and make their money in the fall.  If you never plant those seeds in the spring, and a competitor does, when fall comes around you’ll be on the side line with empty hands watching your competition harvest the rewards.  Look at the once king of the hill Microsoft – who was late to Cloud and Mobile and is now struggling to keep up (unsuccessfully?).  Look at the large established ERP companies like Oracle and SAP who are seeing their market share decrease every day – lost to Cloud based salesforce.com and NetSuite.  And it’s not just large companies.  Its numerous small desktop app providers who are finding themselves running for their lives because they were late to market with a Cloud and Mobile offering.

Too busy to invest time in Cloud or Mobile apps?

You don’t need to recreate your current desktop app on the Cloud or Mobile.  You can start by cherry picking customer needs that the Cloud and Mobile deliver best – Collaboration, Big Data, Compute Intensive and Exploratory quickly evolving solutions.  This could be repackaging a small piece of your current desktop app – or building a small utility app that meets a need your customers have been asking about for ages.  Make it easy.  Make it fast.  Develop both a simple Cloud and Mobile app you believe you can go from first line of code to customer beta in just a week.  I have a team of engineers that have done this numerous times… one week to develop and demo their first Cloud or Mobile app… and then just four hours to develop a new small proof of concept Cloud and Mobile app.  Sure it will end up being a few weeks of development to release a simple Cloud or Mobile app you can tell your customers is “production ready” – but what is a few man weeks investment compare to the 50 man weeks you (or each of your developers) is currently spending on your desktop app?  You need to make this modest investment to “secure your future”.  And you just might “hit it out of the ballpark” too.  I know a few Autodesk software partners that built a simple small Cloud app two years ago – and now get over 50% of all their sales are driven by their Cloud based solution (which has also got them out of the treadmill of having to sell new users to pay the bills – as their Cloud based customers pay every year to stay connected).  I even know one in China that made this transition!

Design and engineering apps too heavy for Cloud and Mobile?

Not true.  Spend some time on the Android Marketplace or Apple’s App Store browsing design and engineering apps.  Autodesk alone has several design apps – some supporting 3D models – as do a growing number of members of the Autodesk Developer Network.

You can blow away your customers by developing a very cool WebGL based 3D design and engineering app that will run in a variety of browsers and on Android and iOS devices in less than a week.  See http://adndevblog.typepad.com/cloud_and_mobile/ for proof.  See a simple browser based 3D app built by a member of the Autodesk Developer Network that makes customers say “wow” - http://www.sparepartsplace.com/home-73.html http://www.sparepartsplace.com/home-73.html.  Check out Autodesk’s 3D free form modeling app for your Android or iOS device in the Marketplace or App Store – 123D Sculpt.

It’s going to take more than a few man weeks to develop your first Cloud or Mobile app?

No it won’t.  Think small.  Think learning.  Think simple and quick customer delight.  Think delivering a single focused “utility” capability that will attract and delight your target customers.  You can easily justify the time if you view this first simple Cloud or Mobile app as a marketing tool that will help you find – and develop a positive relationship with – new customers that you can sell your desktop app too.  Again think about customer needs that leverage the strengths of Cloud and Mobile - Collaboration, Big Data, Compute Intensive and Exploratory quickly evolving solutions.

It’s true.

When is the last time you purchased a “new to you” desktop app?  How many desktop apps have you purchased in the last few years?  Ask anyone under 30 years old what they think of desktop apps (do they even own one?).  If you can, take yourself back to when you first started your business and re-imagine how you would start it today – when you developed that first simple app that people told you they wanted to buy. 

Its late clockAt Autodesk, we have over 60 million people using our Cloud and Mobile apps – with a bit over 10 million people using our desktop apps.  Sure much of our revenue today is coming from those desktops – but the Cloud and Mobile apps are already creating tens of millions dollars in revenue – and growing at a rapid pace.  Growth that is accelerating.  If your competitors, existing or new, get on this accelerating Cloud and Mobile growth path before you do, it’s “over” and just a matter of time before your customers start leaving you.

Still have doubts? 

Ask the youngest person on your team what they think about desktop versus Cloud and Mobile apps.  If you have a family, just ask your kids.  Listen closely to what they have to say.  Ask them “why”.

It’s time. It’s past time.


Danger Will Robinson - Engaging the Elephant Top Down

Just last week I met with a software company with a cutting edge Cloud based web service – the type of service every engineer and designer in the world will be using some day.  They first engaged with Autodesk from the top down – by striking up a conversation with our CEO that led to Autodesk investing in the company.  Now this all happened four years ago when the Cloud based web services were young, fresh and mostly unproven. Danger sign

Though an Autodesk software partner for four years, this company had little understanding how Autodesk could help them build their business and - except for initial funding - was making no use of their relationship with Autodesk to grow their business.

How could someone with a direct relationship with the CEO end up so disconnected and getting so little value from their relationship with Autodesk?

The root of the problem is they had a relationship with the CEO and virtually no one else at Autodesk.  If you are a small company trying to leverage an elephant, having a relationship with the CEO is “nice” but - from a day to day “help me build my business” perspective - not all that useful.  The CEO has plenty to do and hand holding a small start-up is not near the top of the list.  To effectively leverage an elephant, you need relationships with several parts of the elephant – sales, marketing, product management, engineering, and so on.. 

Can you expect a CEO of an elephant to help you develop all these relationships – to do the personal introductions and organize meetings and presentations for you across what may be several divisions within the elephant?  Of course not.  That is why elephants that are  committed to developing and growing large partner ecosystems have teams dedicated to helping partners navigate and leverage their relationship with the elephant.  At Autodesk this team is called the Autodesk Developer Network.  Other popular names for these teams dedicated to helping partners are Developer Relations, Developer Marketing, Partner Evangelists and so on. These folks succeed when you – their partners - succeed.  They know who within the elephant’s organization is interested in what you are doing and can help you make valuable connections – whether with sales, marketing, technology, customers, etc. Top of pyramid

The company I had visited talked to the CEO, an Executive VP and then got lost.  They never engaged with the Developer Relations folks (the Autodesk Developer Network) so had no formal access to Autodesk technology, support, marketing resources, sales channels and just simple advice on how to most effectively leverage their relationship with Autodesk.  They felt ignored and left out in the cold because they assumed a relationship with the CEO - along with the financial investment - insured they would get all they help they needed.  It didn’t.  That said, I can understand why a small company might believe the personal relationship with the CEO and financial commitment would be the “keys to the kingdom”.  But don't you think this is being a bit naïve?

So When You Start Dancing with an Elephant

You need to develop a relationship with someone - or a team - within the elephant whose success is tied toyour success.  A person or team that will be there to act as your guide – that will help you leverage the resources and brand of the elephant to build your business.  You don’t want to depend on someone that doesn’t view helping you as important to their success. 

Remind you of one of my prior blogs? 

Elephants and Termites.  It’s all about your really knowing what the motivations and success factors are for the people you engage with within the elephant.  Is their success tightly tied to your success?  Do they have other priorities that could leave you feeling neglected, ignored or forgotten?  Do you have a very clear and objective understandings and expectations of what the various employees’ within the elephant can do for you – and what they can or will not?  As I said in Elephants and Termites, when in doubt ask them.  Ask them straight up what their priorities are – and where you sit among their priorities.  Find the people within the elephant where you are their priority.


The Proposal

After a hiatus of nearly a month, it’s time for me to get on with the “Marrying the Elephant” thread.  Though after spending 29 out of 37 days out of sight of land on the high seas, and almost all that time barefoot, I find myself being a littleslow getting back into a “business frame of mind”.  Enough excuses – here we go.

So how do you get the elephant to propose to you – to suggest the merger/acquisition? 

In most cases you don’t.  You need to propose to the elephant.  You need to convince the elephant that what you have – whether that be one or all of  the following - industry expertise and insights, deep customer understanding a relationships, leading edge technology not easily/quickly developed by the elephant in house – could be much more valuable to the elephant then to your small growing business. So you are really “selling” your business to the elephant.  It’s just the bride telling the groom they should get married – and not waiting for what may be an unsure groom to propose.

You’ll likely need to suggest the marriage to several employee’s of the elephant because it’s very frequently unclear who the decision maker is – or who can influence the decision makers.  It may also take two senior people to think a merger is a good idea to really get the ball rolling.  So it’s your making the proposal to a product line manager, senior industry manager, senior sales exec, vice president, head of M&A – and if you can get to him or her, the CEO.

How do you make the proposal?Marriage proposal 

You’ll need a few different proposals.  Pitching a CEO may be just half a dozen PPT slides – or even no PPT slides – big picture opportunity.  A product line manager is likely going to want to see lots of market size and growth details as well as technology benefits and where you deliver competitive advantage.  The head of the elephant’s M&A team will surely have an eye out for a spreadsheet showing existing revenue, revenue growth, profitability, projections over several years, and time to break even.

You Need to Listen Carefully

Everyone you suggest a marriage to will give you the opportunity to learn what the elephant finds most valuable – enabling you to tune your proposal to make it more attractive.  But this feedback can be very subtle at times and require you to dig into their response to understand what they are thinking and why about your proposal.  Hesitations in response to your statements and questions, body language and more.  Bring your major account sales skills and empathy to the table when haing these initial merger discussions.

Timing Could Be Wrong

Elephants have numerous demands on their time and attention.  They also go through “financial cycles” where they are at times more and less motivated to pursue acquisitions.  Sometimes it’s obvious when they are aggressively pursuing acquisitions as a business innovation and growth strategy as you can see it in their quarterly statements to the investor community, but sometimes you cannot and will need “smell it” as you talk to various elephant employees about the value to the elephant of acquiring your business.  A good example is a few years back when Google was on an acquisition binge acquiring what I think was over 50 companies per year for two or three years.  Then this last year as competition heated up and growth slowed down a bit, they refocused, actually “purged” themselves of a number of acquisitions (one example I am familiar with is their selling SketchUp to Trimble), and significantly slowed down the pace of new acquisitions.  If timing looks wrong, you will likely have to bide your time for what could be a year or two while continuing to position your business as an attractive acquisition.  

At times the next best move – especially if you feel your business has a limited window of opportunity and maximum value - is to visit the elephant’s biggest competitor (if you haven't already).

So don’t be bashful!

Whether you view yourself as the bride or the groom (or here in San Francisco it wouldn’t be all that unusual for there to be two brides or two grooms), propose!    


Marrying the Elephant – The Pro’s and Con’s of Playing Hard to Get

So you’ve had a few dates with the elephant – and the elephant wants to get serious with you.  What you have (whether IP, industry knowledge, technology expertise or vision) is very attractive to the elephant – and the elephant has developed their vision on how you can help them grow their existing business or break into a new market.Resisting

 Just like real people dating, you may be considering holding off embracing the elephant – playing hard to get – whether because you are unsure you really want to get married (are having second thoughts) or you are just angling for a larger dowry.

Two key points to consider is what the elephant views as “alternatives” – such as your competitors or developing in house – and who the elephant “feels” about you and your management team.  The former is all about the data – evaluating the costs of the different alternatives and the lost revenue opportunity due to delays from pursuing alternatives – and the latter is all about the difficulties that create real and substantial costs when getting in a relationship with a “difficult” management team.

For alternatives, you really need to know, and objectively evaluate, what the elephant’s alternatives are – and what the elephant believes the alternatives mean (not what you believe the alternatives mean).  Do you have competitors with comparable technology and expertise the elephant can readily start talking with?  Do you have technology and expertise that the elephant – given time – cannot readily develop internally – and is your view on this the same view the elephant is likely to have?  You need to be very good at introspection – or have an objective outside view - to really gauge the risk you take of the elephant pursuing alternatives if you play hard to get.

How key executives within the elephant “feel” about you is much harder to manage and foresee. A few words at the wrong time with the wrong person can create a naysayer within the elephant creating doubt that results in the elephant looking elsewhere.  Is some or your management team less emphatic, abrasive, or downright volatile?  How do you manage them during a due diligence process with the elephant?

Recall a prior post where I talked about the downside of an aborted marriage – where the elephant looks elsewhere – and then becomes your largest competitor.  Playing hard to get can – and does at times – result in a great opportunity to reap financial rewards turning into a nightmare (recall Yahoo turning down Microsoft’s $33 per share offer). Green Buffalo Down Wind DH

It’s always comes off a bit crass, and less a technology industry saying then wall street, but it’s still very true – “ pigs get fat, hogs get slaughtered”.

Next…

I am soon off on five weeks’ vacation – on a boat where I am totally disconnected from the net.  That said, this post was on a delayed trigger, so I have already been gone for two weeks – and will be back in just another three weeks.  There is also some chance I’ll write another post in the next few days before I get on the boat so there will be just a two week gap in my postings.  Time will tell.  So see you (virtually) in early August – when I hope to cover the next chapter in Marrying the Elephant – “The Wedding”.


Elephants, Revolutions, and Innovation

I was talking to one of my team the other day about a presentation they were going to give to several Autodesk partners.  The presentation was about a few new Autodesk Cloud technologies that are creating new opportunities for partners to leverage Autodesk technology in very different ways then in the past with our desktop platforms.  All goodness – a typical day for one of my team members – evangelizing Autodesk technology to innovators and entrepreneurs.

 But then came the “what!?”

When talking to partners about Autodesk technology we also usually give some guidance on where we are headed in the future – so partners can invest “appropriately” having some idea where Autodesk is headed – so they can make an informed decision if they want to invest in front of (risking getting stepped on but also where the largest opportunities may be - and then there is always that M&A possibility) or beside Autodesk.  My team member had created a presentation on where Autodesk was headed – including recommendations on where they shouldn’t invest because “Autodesk was doing that”. 

This got my attention.Evolution

It assumes Autodesk is omniscient – we know exactly what customers want now and in the future.  And assumes we know everything Autodesk is going to develop over the next few years.  Of course this is just not true.  No one has a crystal ball.  None of us knows exactly what customers will want and need – and none of us knows what the next big thing will be (or when there will be a next big thing).  We all do our best and make educated decisions and investments – but there is always uncertainty.

So I told my staff member – and most of my staff – we need to be careful not to fall into this “trap” of thinking because we are a major presence in our industry, we have some sort of “special ability” to foresee the future.  In an evolutionary environment, where most improvements in technology are incremental, it’s easy to start believing one does know the future.

But that is not today.Revolution 

Cloud and Mobile technology has us all in a revolutionary disruptive environment.  Uncertainty is high. Innovation is high.  This is a time recommending what someone else should not do – as if one really knows the future – is just plain silly if not hubris.

So what does this mean to an innovator that is considering dancing with the elephant?  In a disruptive technology environment, you are most valuable to the elephant.  You have the most value – and leverage – with elephants when technology changes are revolutionary – not just evolutionary. 

So what condition are your business and software development plans in - to leverage Cloud and Mobile technologies?  Are you positioning your business (whether existing or about to start-up) to have maximum value to your partners – the elephants?

Next week…

Back to our “Marrying the Elephant” thread with “The Pro’s and Con’s of Playing Hard to Get”.