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Monday, November 14, 2005

Ozzie Speak: "Discover, Learn, Try, Buy, Recommend"


A couple of weeks ago, ElusiveCheese (the co-poster in this site) pointed me to some interesting reading material which were internal microsoft memos by Bill Gates and Ray Ozzie (one of the 3 CTOs at microsoft) where they talked about 'a disruptive tidal change' in the way MS must do business to remain at the top of the technology curve. I seriously doubt if they were really internal or if it was just a well planned leak to show the world that microsoft is at top of the innovative chain. Anyway, that is besides the point.

I read Ray's memo with a lot of interest and one thing that really stuck with me was a particular para in the 'Key Tenets' section of his lengthy memo that said:

"Limited trial use, ad-monetized or free reduced-function use, subscription-based use, on-line activation, digital license management, automatic update, and other such concepts are now entering the vocabulary of any developer building products that wish to successfully utilize the web as a channel. Products must now embrace a “discover, learn, try, buy, recommend” cycle – sometimes with one of those phases being free, another ad-supported, and yet another being subscription-based. Grassroots adoption requires an end-to-end perspective related to product design. Products must be easily understood by the user upon trial, and useful out-of-the-box with little or no configuration or administrative intervention."

To me, these 5 words summarize to a great extent what the entire memo talks about. I would like to spend some time discussing my own thoughts here:

  • Discover - The key to product success is not only that it works well, but that people know about it. Traditionally, discovery is an expensive and time consuming process. It involves large marketing budgets, expensive trade shows and a lot of mind/marketshare activities to let people know about the product. To a large degree, the Internet has revolutionized the way we do marketing. Cutting edge companies like Yahoo, Google, Microsoft have embraced technologies such as blogging where key visionaries espouse their ideas and thoughts on how to shape the the next generation world. While they do that, they also talk about internal (and approved) company initiatives that people can read about and get excited. And all of this ties into effective search mechanisms that let consumers search for this information easily. (As an example, Google has integrated blogsearch into its main stream search so that readers can tap into the rich information that people provide in their personal blogs). The Internet penetration is of magnitudes more than other marketing mechanisms and organizations should embrace this new marketing tool, while at the same time continuing the more traditional methods for 'in-person' interaction and targetted marketing. One does not replace the other, but ignoring the Internet is like trying to mow your lawn with a pair of scissors while the lawn mover sits in your garage.
  • Learn - This one word has many connotations. To me, it says 'what ever you do must be easy to learn'. It should be intuitive in operation and in front end interfaces. I strongly recommend companies read human interace design guidelines from folks like apple and GNOME . Google and Microsoft's applications are key examples of good software interface design - how many of us actually have read the manual for Microsoft Powerpoint or word to get started ? Likely less than 1% - sure we refer to help when we need to do something advanced, but the key is that for any good software, the initial learning to get it up and running to perform a simple task should be intuitive. All my life, I have worked with 'telecom bellheads' who believe that complexity is key to what they do in their business. I find this thought ridiculous - simplicity and intuitiveness is a key tenet in whatever you do. It's a mindset. This one point encompasses good design and engineering principles both in the product front end and the back end. An easy to learn product should be self configuring, self correcting and most importantly, should a) never make a change permanent without asking confirmation, or , b) Let the users undo what they just did or, in the worst case, c) Offer a reset function to return to a self-configured stable state. The other dimension to Learn is to keep learning from competition. Never reach a state where you think you are safe and at the top - that is exactly when you will slip a few feet down and if you don't pick your self up in time, you will continue sliding down the greasy ladder to your own destruction. Ozzie refers continously to 'grassroot' (new) companies that are 'laser-focussed' on what they do. A key learning here (even though its common sense) - keep your ear to the ground, never lose focus. You need to constantly innovate and better your products to keep ahead.
  • Try, Buy - The world is a-changing. Consumers demand try before you buy. Don't shy away from it. Again, I have worked for companies that shun this model in the past - 'free internet trials' to them means that their sales organization will not have a job. Again, stunted vision as far as I am concerned. Hosting a software on the internet for controlled, time limited trials is key as far as I am concerned when it comes to effective internet marketing. A Lot of people believe that this model only works for B2C sales and not for B2B sales. I beg to differ. This is a model of convenience and elimiates a lot of effort from both sides for the initial trial. When the trial expires in 30 days, if the consumer wants to buy, he will contact you. If you are concerned about IPR leak and license hacking, trust me, it is no different for a person to sign an NDA manually with you, sign an eval license and then hack it anyway (all of this can be done in the online version of try and Buy too, if you so like)
  • Recommend - This one word to me is key as an indication of the post sales process. In my experience, business comes from repeat sales. Trying to find new customers all the time simply based on 1st hand marketing (that is the company that sells directly markets) get increasingly tougher as time passes. Referrals are key to increasing business. Referalls can happen within the organization (one division reccomends to the other) or outside. Either way, when something is strongly recommended by a close associate, the chances are that you would buy it even if it is at a small premium. Your custo
    mer will recommend your product only if he is comfortable with its functioning and the post-sales process he has experienced after investing in your product. Too many companies focus on pre-sales and ignore post-sales. Remember, a satisfied customer is a customer who will sell your product for free to others. And his conversion rate will be much higher than yours. Remember it, accept it, embrace it.

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