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April 15th, The Windows Vista Positioning Disaster: Strategies for Recovery, Part I of III

by Merrill R. (Rick) Chapman, Softletter

In the July 15th, 2007 issue of Softletter I wrote about the Vista positioning fiasco; as events since that article have unfolded, the Windows positioning fiasco has turned the rollout of the product into the most catastrophic marketing failure in Microsoft’s long, and mostly storied, history. At the time I was writing both versions of In Search of Stupidity: Over 20 Years of High-Tech Marketing Disasters, I made the statement that the chief reason for Microsoft’s success over the years was that the company had avoided making major stupid mistakes, in sharp contrast with most of its competitors. With Vista, this record of avoiding stupidity comes to an end. The marketing campaign supporting Vista was profoundly stupid and repeated easily avoidable mistakes made by MicroPro, Borland, Novell, and others.

Before going further, it’s only fair to address the technical objections surrounding Vista. In the main, these have been solved, and before much longer Vista will be a solid, useful operating system (though no compelling reason has ever been offered by Microsoft for using it in lieu of XP). But no one cares. Vista is massively tarnished and while many people are using it, in the main it’s because they have no choice. Using your monopoly position in a market to force feed people something they don’t want is not good marketing. And while Microsoft can survive one Vista-class mistake, even it can’t afford to make two of them.

Before we contine with this exercise, it’s important to accept that none of the options we’ll be discussing will easy to execute and pay for. Because a positioning failure impacts every aspect of a company’s sales and marketing operations, repairing or ameliorating the fallout is always ugly, painful, slow, and unsatisfactory in many respects. It’s why a company should avoid making them in the first place. Let’s work through Microsoft’s different options and discuss the pros and cons of each.more...

March 31st, Valuing Options While Running the Compliance

Gauntlet, Part II of II

It is important to note again the differences between FASB 123R and IRC Section 409A as they appear to be similar but approach the valuation of options and securities from different perspectives. FASB 123R concerns stock option valuations for financial reporting purposes and is measured from the issuing company’s perspective. The objective is, in the case of privately-owned companies, to place a value on stock options in order to treat its value as an expense on an income statement.

IRC 409A is concerned with the issuance of stock based compensation—either in the form of stock options or other types of securities—by either publicly-owned or privately-owned firms. The objective is to ensure that the securities being granted, whether in the form of stock options or stock, are granted at fair market value. If they’re not, the individuals receiving the stocks may be socked with taxes, interest and penalties.

Under either regimen, the value of the underlying security—the common stock—is critical in determining the value of a stock option. For publicly-owned companies, obtaining the price of the common (share) is as easy as opening the Wall Street Journal (or going online). Privately-owned companies do not enjoy the same luxury.more...

March 15th, Valuing Options While Running the Compliance

Gauntlet, Part I of II

by Edward E. Pratesi, CPA, Brentmore Advisors, LLC

Value, as we know is in the “eyes of the beholder.” Certainly we know that transaction value is important in “pricing” rounds of venture capital financing and is critical in determining exit multiples during an IPO or M&A event. But distinctions should be drawn between “transaction” oriented valuations and what is often called “compliance” based valuation. Compliance-based valuation refers to a business valuation assigned to such assets as:

The value of stock options or stock based awards issued by either publicly-traded or privately-held companies (FASB 123R, IRC Sec. 409A, SEC “Cheap Stock” review).
The allocation of the purchase price and determination of goodwill in the context of a business combination (FASB 141R).
The testing for impairment of goodwill acquired in a business combination (FASB 142).

Both publicly traded and privately traded companies are impacted by these compliance and reporting requirements. For financial reporting purposes (GAAP accounting), the Financial Accounting Standards Board (FASB) has promulgated reporting standards under 123R, 141R, 142 and 157 – which defines the concept of “fair value” for financial reporting purposes. The Internal Revenue Service, with Code Section 409A and its proposed regulations, impact any firm considering stock-based compensation. And finally the Securities and Exchange Commission (SEC) encourages adherence to the standards promulgated by the FASB and provides oversight on the valuation and issuance of stock-based compensation and stock options.

The cost of being out of compliance with one or more of the above rule making bodies can result in additional taxes, penalties and interest under IRS rules to a possible restatement of financial statements for additional compensation expense and possibly other sanctions by the SEC upon an IPO event.more...

February 29th, Converting From a Licensed to a Subscription Model

by Javier Rojas, Kenet Partners

The market for SaaS has gone mainstream. Corporations are increasingly open to buying software in this way. As a result, revenues are growing rapidly for the right sort of application vendor in virtually every segment. Aggregate turnover for stand-alone public SaaS companies has reached nearly $750 million annually. What is more, there are significant financial incentives for entrepreneurs to shift to a SaaS model. The public equity markets are placing a high premium on SaaS vendors, with market values averaging 5x forward revenues. A company with expected revenues of $50 million in 2007 and a median growth rate may well command an IPO or trade sale valuation of $250 million or better.

As a result of this dramatic shift, private investors are focusing on promising SaaS vendors and are highly selective regarding license software companies in which they are willing to invest. In both the private and the public markets, SaaS companies are being valued at a premium because of the visibility afforded by the recurring revenue model, the low marginal cost afforded by the multi-tenancy delivery model, and the reduced cost of selling on-demand solutions.more...

February 15th, Open Source and the SaaS Development Connection

In our last issue of Softletter we published research from our recent SaaS survey indicating that SaaS software firms, particularly smaller ones, were turning to Open Source to build their products. We were curious to discover more about this trend and spoke to Wayne Hom, CTO of Augmentum, a major outsourcer and development house focusing on resources from China. Augmentum recently finished a major development effort for Etology, a SaaS-based firm that creates a virtual ad marketplace for niche publications (such as Softletter).

Wayne, our recent Softletter SaaS survey indicated that almost 50% of SaaS companies under $1M in revenue were basing their products on Open Source software. What is your take on this trend?

Open Source can definitely assist a startup in getting to market faster. With SaaS, time to market and reliable delivery of services is key because of the extended ramp up to profitability.

Where Open Source truly shines is in its ability to function as a community-driven store of components that can drive a new product’s underlying architecture. In this sense, Open Source replicates, but on a non-proprietary scale, the platforms being assembled by firms such as Salesforce.com and Netsuite. A new company looking to get up and running can rummage through a vast array of Open Source projects and often find valuable resources that can substantially speed their initial development efforts.more...

January 30th, Gaming Innovation

Readers of Softletter know that we’re fans of business simulations as training tools. Alas, few companies take our advice; encouraging people to play games during work just doesn’t fit most corporate zeitgeists. But then most companies haven’t met Spigit. Spigit is a fascinating new simulation system that combines social networking, communities, reputation ranking, and the monetization of participation in the aforementioned into a coherent whole. We spoke with Paul Pluschkell, CEO of Spigit, to discuss the system and it’s purpose.

How do you define Spigit?

We call it social productivity software. Spigit is designed to allow companies to unlock internal productivity and innovation. Web 2.0 technology has generated a revolution in the ability of people to communicate within their immediate circle. Sites such as LinkedIn, Facebook, MySpace, Jive, etc., are all good examples of this.

But one of the problems with social sites is that they don’t really work well in assisting people to work with quality contacts outside your immediate circle. Again, take a look at LinkedIn and MySpace, for example. Both of these systems encourage you to build networks of “contacts” or friends but the truth is you spend very little time interacting with your virtual “buddies.” more...

January 15th, The 2007 Codies: Views and Observations

December 31st, SaaS “Banks”: The Right Solution to Funding Your SaaS Startup?

SaaS is hot and SaaS is growing and many companies are starting new SaaS companies but there’s one big snake in the SaaS paradise. That snake is cash and cash flow because SaaS can also be expensive (to start). Yes, we’ve talked to B2C and even some B2B companies that tell us SaaS is cheap if you want to reach “sale one” quickly. You can rent infrastructure with little delay. In some highly targeted application areas, we’ve seen companies grab some code from here, some widgets from there, do a quick mashup and voila! Instant application. Then buy some Google keywords, run a quick E-mail campaign, and you’ve got customers!

But then you have to scale your business and the picture changes. To implement a multi-tenanted data infrastructure requires some real programming and a serious development team. SaaS customers require white glove support (even your small ones, who won’t stand for being treated like second class citizens) and this by itself can quickly choke your financial growth (we’re talking to several SaaS companies who are facing just this dilemma).

And unlike licensed software, in most cases you’re not going to be able to rely on that big $1m dollar deal to bail you out; SaaS in most cases grows organically over time, but in the meantime you’ve got bills to pay. To discuss this dilemma in greater detail and discuss your options, we talked to Jeff Mills of SaaS Capital. Jeff launched SaaS Capital in 2007 and prior to that was a partner at Blue Chip Venture Company where he focused on investing in early stage software companies, many of them ASP/SaaS plays more...

December 15th, Four Critical Success Factors for Your Products

by Brian Lawley, The 280 Group, author, Expert Product Management

Build a great product and you’ll take the market by storm, right? That’s the myth perpetuated in Silicon Valley, and that it’s not true is a difficult lesson that many entrepreneurs and even seasoned companies end up learning the hard way. Yes, some products seem to be blessed with fairy marketing magic, with everything seeming to fall easily into place on the road to success. But the odds of that happening are thousands to one. The overwhelming majority of successful software companies combine good marketing and sales planning and execution with great products. Marketing comprises many elements but of all the factors you must juggle, during my twenty year career in product management, I’ve found these four to be the most critical to success more...

November 30th, The 2007 Softletter Telesales Efficiency Survey: Summary Results, Part II of II

How many telesales representatives do you currently employ or contract with?

Average 19.7
Median 5

The reason for the large discrepancy between the two numbers is because a small number of respondents reported having a large telemarketing group; once these outliers were accounted for, the median of “5” reflects the fact that smaller software firms tend to rely more heavily on telesales.

How often does your company change its sales compensation plan?

Median 10 months

The median reported here of 10 months is slightly lower than the “12 months” reported for direct sales forces. The difference between the two numbers can be accounted for by the fact that smaller companies can more quickly adjust compensation plans when faced with sales shortfalls and feedback from telesales personnel more...

November 15th, The 2007 Softletter Telesales Efficiency Survey: Summary Results, Part I of II

Introduction: Methods and Respondent Profiles

Our Telesales Efficiency Survey, conducted in October and November 2007, was sent to approximately 23k companies over a period of three weeks. The survey was conducted entirely via the web and results were processed with the Perseus Web Surveyor system. The survey received 126 valid responses, with the single largest group of respondents reporting that their title was CEO, president, or some variant of the aforementioned: 48 in total. The second largest cohort identified themselves as having a sales title including VP of Sales, director of sales, and other variants: 21. The third largest cohort was participants with a director title: 20. Other titles provided included CFO, CTO, advisor, senior VP of operations, and business development (2). Twenty respondents failed to provide a title.

As in our direct sales survey, we focus on the medians as they tend to eliminate outliers; averages are included in the interest of providing further insight. And, as with direct sales compensation, competition for telesales personnel has driven up base salaries significantly. This reflects the recovering health of software companies from the dot.com collapse, the increasing competition for high-quality sales personnel, and the continued strength of the US economy (when the unemployment rate drops below 5.5%, the economy has reached technical “full employment”)more...

October 31st, The 2007 Softletter SaaS Survey, Marketing Analyses

What programs are most effective in generating new leads for your SaaS product?

Clear winners in the marketing program sweepstakes were E-mail, web-based collaterals, tradeshows, PR (a bit of a surprise, considering all the scorn traditionally launched at PR), webinars, search engine placement, and search engine keyword placement. Clear losers included more...

October 15th, The 2007 Softletter SaaS Survey, Summary Results, Part II

We continue with our analysis of the summary results from our SaaS survey.

What is the average length of your SaaS subscription contracts with your customers?

Do you allow your customers the option of installing your SaaS software behind their own firewall rather than on your servers?

These numbers represent a shift from last year, when 58.2% of respondents reported they allowed their (the software firm’s) SaaS system to be installed behind the customer’s firewall.

If you answered “Yes” to question 20, then please tell us “What percent of your customers choose the option of installing your SaaS software behind their own firewall rather than on your servers?” more...

September 30th, The 2007 Softletter SaaS Survey: Summary Results, Part I

Introduction: Methods and Respondent Profiles

Our 2007 Softtletter SaaS Survey, conducted in August and September 2007 was sent to approximately 23k companies over a period of six weeks. The survey, which consisted of 67 questions (including two tables) was conducted entirely via the web and results were processed with the Perseus Web Surveyor system. The survey received 114 valid responses, with the single largest group of respondents reporting that their title was CEO, president, or some variant of the aforementioned : 51 in total. Six respondents identified themselves with a “C” title, with three being CFOs and the others sales and marketing chiefs.

The second largest cohort identifed themselves as having a VP title including sales, marketing, product management and business development: 17. The third largest cohort was participants with a director level title, including sales, product management, and marketing: 13. In addition, 19 participants identifed themselves as having primary marketing responsibilities; titles given included product manager, SaaS marketing manager, and similar variants. Titles for the rest of the respondents ranged from architect to product manager. 13 respondents failed to provide a title.

Number of particular interest have been bolded. Decimals have been rounded off to one degree of precision and may not equal 100%.

Summary Results

The survey broke companies down into both development and revenue stages. The results were as follows:

The strength of the public cohort is mildly surprising, given the IPO drought that has only recently begun to abate in the software industry.

The high number for the 100+ million cohort is deceptive; of these 14 companies, only two reported that they were receiving as high as 50% of their revenue from SaaS sales, with the rest reporting either up to 10% or 20%. However, in the $10 to $99 million segment, 12 companies reported that up to 75% or 100% of their revenues came from SaaS sales.

These numbers indicate the dynamism of SaaS, which should come as no surprise to Softletter readers. Over the last three years VC and private venture money have flowed heavily into the SaaS/on demand markets and away from client/server more...

September 15th, States of Seduction: How to Work With State CIOs

Tracy Williams until January of this year was a member of an elite club (and may be again someday): the state CIO of Rhode Island. Tracy cut her business IT teeth in the industry as a top notch Novell administrator, consultant, and sales representative with firms such as Sun and CSC. When we've needed inside information on how software companies can best interact and work with government agencies while making enterprise sales, we've turned to her for insight and analysis.

Tracy, what is the role of a state CIO in the purchasing and sales cycle in state governments?

State CIOs can play one of two roles. Sometimes their role is more that of a very high-end network administrator. However, most state CIOs play more strategic roles, heavily involving themselves in policy, infrastructure, and standards. In some states, the admin and policy positions will be clearly delineated by examining the state's IT org chart; in other cases, you'll have to do some research to determine the CIO's particular focus.

When dealing with a "strategic" CIO, their influence over standards is the biggest role they play and this in turn will have the heaviest impact on a software company's sales cycle more...

August 31st, Creating Compelling Product Road Maps

by Brian Lawley, 280 Group

Product roadmaps can mean the difference between success and failure when delivering and marketing products. Done correctly, they can help win and keep large customers and partners, and can guide the engineering and strategic planning efforts of a company. Unfortunately most product roadmaps are created "on the fly" and under pressure when sales or senior management make a last-minute request. As a result, they don't have the impact they should, and can be a source of trouble if you aren't careful. But done successfully, product roadmaps can drive your company’s strategy and development efforts. They can provide partners, press, analysts and customers with a clear idea of your company’s direction. They can help your sales force hold onto a major deal by reassuring customers about your future directions. And you may need a roadmap to get your company's next round of funding.

Why a Product Roadmap?

There are wide variations in terms of definitions and uses for roadmaps. The first step is to decide what type you need and what it will be used for. There are five types of roadmaps that are the most commonly used: market and strategy, visionary, technology, platform and product (internal and external). Each type is good for specific uses and can be combined to create a bigger picture.

Market and strategy roadmaps paint a picture of which markets you will be going after and how you plan to develop the products for each segment. For example, in year one you may want to enter healthcare by partnering with another company. Or you may want to enter the financial market in year two by building products in-house or acquiring products more...

August 15th, The 2007 Softletter Sales Efficiency Survey: Detailed Analyses

Medians of Sales Personnel Achieving
Quota By Company Revenue

These numbers are illustrative of a couple of points. The high performance of the under $1m cohort can probably be traced to the fact that if you’re not doing a good job of sales at this point in your company’s life, you probably don’t have time to participate in this survey. At the high end, we suspect a company reaches $100m+ in sales because its sales force is able to beat the medians.

Medians of Sales Personnel Achieving
Quota By Development Stage

This number was something of a puzzle, explained by the fact that smaller public companies seem to do a bad job of meeting sales goals, thus dragging down medians in this data slice sharply. One reason that might account for this number is that when a small company goes public, it tends to relax a bit, believing it can rely on its fresh influx of cash to carry it; larger companies are too big to be able to indulge in this behavior. This is a number we’ll be looking at in closer detail in the future. more...

July 31st,The 2007 Softletter Sales Efficiency Survey: Summary Results

Introduction: Methods and Respondent Profiles

Our Sales Efficiency Survey, conducted in July 2007, was sent to approximately 23k companies over a period of three weeks. The survey was conducted entirely via the web and results were processed with the Perseus Web Surveyor system. The survey received 274 valid responses, with the single largest group of respondents reporting that their title was CEO, president, or some variant of the aforementioned (one participant identified themself as the “Big Boss”): 86 in total. Not surprisingly, the second largest cohort identified themselves as having a sales title including VP of Sales, director of sales, and other variants: 59. The third largest cohort was participants with a financial title, either CFO or controller: 31. In addition, 19 participants identified themselves as having primary marketing responsibilities; titles given included product manager, VP of Marketing, and similar variants. Titles for the rest of the respondents ranged from human resources to business development. Only six respondents failed to provide a title.

Summary Results

The survey broke companies down into four basic categories, companies selling Enterprise/Client Server products, SaaS, Desktop/Retail and OEM (which was defined in the survey as product embedded directly within another software product). The results were as follows:

Software Category Totals

Enterprise/Client Server: 168
SaaS: 48
Desktop/Retail: 43
OEM: 15

The strength of SaaS among the respondent groups was only mildly surprising given the increasing strength of on-demand in the marketplace. A year ago, Desktop/Retail would have been in second place.

Results for “Development Stage,” are given in the table on the following page. more...

July 15th, The Windows Vista Positioning Fiasco: What You Can Learn

Seven months after the release of Vista to businesses (the product was released to consumers in January, 2007) the consensus of the market has been that Vista is a flop. It’s a peculiar type of flop. Financially, Vista is making a great deal of money for Microsoft. No surprise there; after all, the company has an almost complete monopoly in the desktop OS and main business applications markets and the dominant position in the server OS segment. OEMs are in complete thrall to Microsoft; if you don’t offer Windows on your laptop, you’ve got an unsellable silicon brick in your warehouse.

But that said, Vista has failed to meet any of the lofty goals originally set for it. It has failed to excite any segment of the market, including key influencer groups such as the press and the gamers. It is not driving sales of new computers. At retail, the pull figures for Windows out of the channel are dreary and show no signs of changing (we’re researching these numbers and will be reporting on them soon in an upcoming issue of Softletter). The blogs are condescending and even many Microsoft devotees are dismayed by what they see and hear. Legitimate copies of Windows XP (and even 2000!) just became more valuable and knuckles will have to be severely cracked before the hands grasping those precious old boxes relax and allow a fresh copy of Vista to be shoved into a reluctant grasp. The fact is, few people see any need or have any desire to buy Vista.

In all fairness, some of the problems that accompanied the Vista launch are beyond Microsoft’s control. As the Internet has matured as a development and infrastructure platform, the growth of SaaS and advent of hybrid applications has led to an inevitable challenge to Microsoft’s monopolies in OSs and desktop applications. Over the next several years, Microsoft will need to execute the painful chore of chewing off its own two strong revenue arms (but not too quickly) and hope they regenerate into new revenue and profit builders. It’s not a tasty task, and you can’t really blame the company for avoiding it, necessary though it is. more...

June 30th, Thriving in the Shadow of the Beast

Once upon a time, in a vanished world few now remember, there used to be flourishing and competitive markets in desktop-based word processing, spreadsheets, presentation packages, and databases. In the DBMS market alone there was the king, dBase, constantly fighting off a horde of contenders to the throne that included Paradox, DataEase, FoxBase, R:base, Clipper, Revelation, DataPerfect, VersaForm, to name just a few of the products we recall from the dusty archives of our memory. Then Ashton-Tate self-destructed and in its dying poisoned the dBase development environment. As dBase died, Access and Microsoft Office appeared and through luck and good marketing, The Redmond Beast laid waste to its competitors in the desktop application markets. When the carnage was over, the desktop database market was a stark wasteland, a landscape littered with moldering stacks of discarded floppies and battered cardboard boxes stuffed with encyclopedia-sized stacks of discarded documentation.

Survivors left to make their way in this grim new world included FileMaker, a wholly owned subsidiary of Apple, and independent DBMS producer, Alpha Software. Founded by industry pioneers and British expatriates Richard and Selwyn Rabins, its desktop database, Alpha, developed a strong following in the 80s and 90s as a flexible and powerful rapid application development system (we were customers), but after the firm merged with SoftQuad, the product dropped off most radar screens. Alpha did not disappear however, and several years ago the product began a strong comeback. Today Alpha boasts an active user base of over 300k, 500+ VARs and is growing steadily. We asked Richard Rabins about how Alpha has survived and grown in the shadow of Redmond.

• Understand how to take advantage of another company’s positioning problems. “Microsoft was able to duck the positioning bullet fired by its purchase of FoxBase and FoxPro, but over time the company’s emphasis has shifted to SQL Server. Today, Microsoft wants you to buy SQL Server and has allowed Access to languish. Over the last several years, Access has lagged in terms of innovation and new capabilities. Access still rolls over when you create a multiuse environment that supports more than 20 users. This is a deliberate decision by Microsoft. Improve Access and you cannibalizes SQL server and Visual Studio. more...

June 15th, Providing Your Customer With a SaaS Security Blanket

One of the primary reasons for the collapse of what was then called the ASP market in the period from 1999 through 2001 was the skepticism of enterprise customer’s over the ability of SaaS companies to provide adequate security for customer data. “We’ll never let that type of data out of our physical control” was the retort of many, many members of upper management. And at the time, few software companies were well prepared to deal with security objections.

But things are changing rapidly in the software industry, as you can see from our analysis of where today’s VCs are placing their monetary bets. To help software companies understand how to discuss SaaS security with enterprise customers, we sat down with John Shovic, VP of Business Development for InstiComm, a developer of mobile communications services for doctors. InstiComm’s products transmit patient’s medical and billing information wirelessly and if there’s one business where privacy concerns are vital to your business model, it’s in the healthcare industry. As the former CEO of TriGeo Network Security, professor of Cyber-Security at Eastern Washington University, and CTO of MiloCreek, a consulting and services firm specializing in cyber-security, John is uniquely qualified to discuss this topic.

John, how should SaaS companies address questions and skepticism about the ability of their firms to manage customer’s data securely and safely?

One important component is education and realizing who needs to be educated in the corporate hierarchy. Often, the main objections will be coming from upper management, not IT. One approach I’ve found consistently effective is to point out to executives how many systems that support their business and on which they rely, both directly and indirectly, are built on the SaaS model, even if they (the executive), doesn’t realize it.

For example, small and regional banks are increasingly not attempting to build their own IT infrastructures but turning to companies such as Fiserv to provide their core capabilities. (And even the larger banks, while they manage their own IT systems, provide services to their branches via a SaaS model.) more...

May 31st, The Way of the OEM

Selling software in the OEM markets has always been profitable, but it’s also tough (and it will be getting tougher as the IT press continues to moan and whine about “craplets,” free and trial packages preloaded on consumer computer systems). But to most software companies, OEM sales and marketing are usually secondary opportunities, revenue generators that play second fiddle to a retail or direct sales strategy.

ABBYY is one software company that has traveled a different road. The firm, which is a major competitor in the very competitive desktop and high-end scanning, image management, and OCR markets achieved its success by executing a from-the-ground-up OEM and licensing strategy. ABBYY also moved into the market from an unusual direction, east. Founded by Chinese expatriate David Yang in Moscow in 1989, ABBYY is also an international software power, one that has learned how to make sales in some tough markets indeed. We spoke with ABBYY US CEO Dean Tang about the lessons the company has learned in the OEM market and the factors that have contributed to ABBYY’s success.

Dean, how large is ABBYY?

Currently the company is 600 employees with four regional headquarters, including the US. Our software is bundled with approximately half of the desktop scanners currently sold and we have about 20 million OEM and retail/system integrator customers. The company’s corporate HQ is located in Russia. ABBYY is currently privately held. Our primary product lines are ABBYY FineReader, our document converter utilities, and our language translation software.

Why did ABBYY pursue an OEM strategy? Why not go directly to retail?

The OEM track was driven by the company’s belief that it would have to build brand awareness of its products over time. Breaking into retail channels is expensive and the company had limited resources. No one had heard of us and there were larger, more established firms in the marketplace more...

May 15th, Why Every Presentation You’re Doing Today S***Ks
by Paul Leroux, coauthor of Visual Selling: Capture the Eye and the Customer Will Follow

Like everyone else in the universe, we use PowerPoint for our presentations and like everyone else in the universe, the basic rules we follow when standing in front of a group or an audience include:

• Creating slides that bullet point out my key points so as to keep ourselves and our audiences on track. We recently held a webinar on the impact of SaaS on software product management (the link is up at www.softwaresuccess.com) with slides that adhered to just this practice.

• Preparing handouts/decks as a leave behind.

• Placing our screen (if it’s not already placed there) in the middle of the room.

• Turning the lights down low (or off) during the presentation so everyone can see our slides more clearly.

• Standing to the right of the presentation screen (like most righties).

• Using a laser pointer if in a room of any size.

Actually, we can’t think of a presentation we’ve seen over the last several years that doesn’t follow the above sequence. And Paul Leroux, CEO of Twain Associates and coauthor of Visual Selling, is here to tell all of you the above is wrong, wrong, and wrong. We asked him why.

What’s wrong with the presentation principles above? We were taught things like “keep your bullet points to no more than three per slide” by business experts!

Let’s discuss why anyone gives a presentation in the first place, particularly in a selling situation. The only reason for a presentation is to persuade someone to take or change their actions. And only people can persuade other people of anything; all a presentation can do is assist in the process more...

April 30th, Creating and Deploying Effective Customer Concerns Surveys

Many times when we consult with a software firm, the first marketing program we recommend that they carry out is a customer concerns and issues survey. We’re not talking about customer satisfaction surveys, or studies designed to ferret out new trends or uncover additional demographic information on your firm’s behalf. We mean surveys that examine your customer’s business issues and challenges. The reason for this recommendation is that a well-designed and informational survey that provides your clients with credible data about their business challenges is often the single most effective piece of collateral a software company can create. Nothing, especially in enterprise sales, supports the sales process more effectively than such a report or document, particularly in light of the fact that the responses and opinions highlighted in the survey come from your customer’s peers (and quite often, from their employees as well).

Surveys are also valuable sources of information about your clients. A well-designed survey can elicit information about salary levels, purchasing processes, time frames, competitor’s market shares and much more. And used properly, surveys are one of the most powerful lead generation tools available.

Unfortunately, in the past creating surveys was an expensive and time consuming proposition. However, web and server-based surveys make the process far easier and very inexpensive. Powerful web-based survey tools that highly automate questionnaire development and survey creation are available from $20 to $200 per month. Format and layout typically costs from $1500 to $3500 per piece. Given the relative inexpensiveness of creating good customer concerns surveys and their high value, there’s no good reason not to do so more...

April 15th, Apple’s New Orchards

by Rick Chapman, Softletter

In its heart, Apple Computer never wanted to be a computer company. Apple co-founder Steve Wozniak certainly wanted it to be, but while Wozniak served as the firm’s early technical brain, it was the other Steve, Jobs, who defined what would be the ultimate cast of Apple’s DNA. And that DNA says the Apple soul should be proprietary, high design, and high margin. What Apple has always wanted is for the Macintosh to be the McIntosh, a high-end audio receiver much prized by 70s and 80s audiophiles, a unit that sported ultra high performance accompanied by a major price tag (the company is still in business today, still producing high-end audio equipment in its boutique facility in upstate New York). Apple’s iPod is the digital reincarnation of the first Macintosh: beautifully designed and completely locked up (you’re not even supposed to change your little white slab’s battery.) Thus it has always been at Apple, and as long as Steve Jobs guides the company, thus it must always be. Apple would not be Apple if it were any other way.

Unfortunately, the problem with all of this is that while it remains a computer company, Apple’s growth is sharply bounded by history and its DNA. Despite the misstatements of young tyros who haven’t studied the industry’s history, it didn’t have to be that way. From 1986 till the release of Windows 3.0, Apple made significant inroads into broad corporate markets. The product was clearly superior to anything to be found on the PC platform and many businesses stanardized on it. Had Apple made the decision to license the Macintosh OS, Apple would now be Microsoft. But Apple couldn’t ignore its DNA and the world is now as it is.

And in computers, Apple’s world consists of about 4% to 5% of new computers sold. When I was writing the first edition of In Search of Stupidity: Over 20 Years of High-Tech Marketing Disasters, I noted that Apple had about 3% to 4% market share of new computers sold worldwide (an observation that carries over to the Apple OS, which still runs only—officially—on Apple boxes). Actually, I was generous; by the time the book went to print, Apple’s share had slipped to less than 3 percent in some analyses. And today, after the iPod’s stunning success, Apple’s worldwide market share of PCs/operating systems worldwide is now about…3% to 4% (the company has climbed to almost 5% in some studies, but some of this gain reflects the use of Apple computers as Wintel boxes).

It isn’t as if Apple hasn’t tried to change this. After Steve Jobs returned to Apple, the company launched several “switch to the Mac” campaigns, all of which have had little impact on the market. (Apple doesn’t even pretend to try hard in the server market, despite its product’s excellent performance) more...

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