280 Insider Newsletter

In This Issue: October 23, 2003

• The 280 Insider
• 280 Group Announcements
• Companies to Watch: Plaxo
• Marketing Trends: Product Promises
• Books To Read: In Search of Stupidity
• Silicon Valley 4.0 Conference



The 280 Insider

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Dear 280 Group Subscriber,

Thanks to all of our readers who provided feedback on the last issue. One thing they told us was that they wanted to be able to read the newsletter straight through without having to click on links, so we are making it available online as a single document (click link below).

In this issue we’ll be covering a hot startup named Plaxo, talking about the value of Product Promises, reviewing an excellent new book named In Search of Stupidity and talking about Garage.com's Silicon Valley 4.0 conference.

By the way, if you want to know my thoughts about what categories have momentum and are getting funding take a look at the 280 Group Blog in the resources section of our website.

Have an idea for an article you'd like to contribute or a hot company we should cover? Contact us.

Brian Lawley
President
280 Group LLC


280 Group Announcements

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Need a consultant or contractor? Contact us for a free quote and proposal.

- Referral program – give us a lead and earn up to $10k

- Google Rank! - optimize your site so that new customers can find you

- Silicon Valley Marketing Resources Directory - looking for additional companies & contractors to include

- Will Iverson speaking at OReilly/Apachecon conferences
Click here for details on the announcements

Marketing Trends: Product Promises

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Is your Product Promise really a promise?

I had an experience with a product this week that was so far off base I decided write about Product Promises.

A product promise is the implied commitment made to customers by a company. It embodies everything that the company, brand, marketing, features and benefits and product description convey. Put simply, a product promise is kept if the customer has an experience that is at least as good as what they expected based on what the company told them.

Products that keep their promises tend to build loyal fan bases and succeed. Products that don't, often fail (though if they solve a burning need for the customer and are the only available solution they sometimes succeed anyway).

What are some examples of product promises where companies met customer expectations and it paid off for them? The original Palm Pilot made a product promise that synchronization would work seamlessly. For me it worked so well I couldn't believe it (at the time). Macintosh (at least the early days) had the product promise that it was the easiest to use personal computer available. Amazon.com had the promise that they offered the world's largest selection of books and that purchasing and customer service be hassle-free. Google's product promise is that you will find what you are looking for on the Internet rapidly with a minimum of effort.

Here's the 280 Group Product Promise. We promise to provide you with professional, high-quality Marketing and Product Management consultants and contractors that deliver excellent results at reasonable rates.

Product promises have gotten a bad rap, primarily because of what happened during the boom. Companies shipped crummy products, made claims that were nowhere near true, burned their customers, and then wondered why they had no repeat or referral business. In fact, one of the biggest challenges the tech industry faces today is that it has trained even the most tech-savvy people to be late adopters. Why beta test software or hardware for a company when you can wait until it is solid and many other people are using it reliably. Of course, this mentality leads to no one using anything because everyone is waiting for the other guy to endure the pain.

Oftentimes Product Management has to be the gatekeeper to watch over whether customers are truly being taken care of. Engineering will always have pressure to ship the product, no matter what. Sales will want the product now, and by the way, it had better work right. Upper management will feel the pressure to make quarterly numbers and will tend to want to ship the product even if it isn't completely ready. QA will tell you what the bug count looks like, and how many severe problems remain. But in many cases the only group that truly has a handle on whether the product will meet customer expectations and keep its promises is Product Management.

At one point during the boom I was offered a high-level job with a company going public in three months. They had an incredible story, lots of talent, a first-class board and executive team, and $120M in funding. But after consulting there for 2 months I declined their offers, despite the fact that they sweetened the pot multiple times and made me by far the best offer I had ever received in my career. Why? I was running Product Marketing and Product Management for them and despite my communication that the product was nowhere close to meeting its product promise, management was barreling ahead and determined to ship it. They did. They never made their numbers. Not even close.

Yes, the founders made some money. But think of the momentum and wealth they might have had if they had truly kept their product promise. They might even still be in business today.

Does your company really keep its product promises?


Companies to Watch: Plaxo

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One of the hot companies that we've been following is Plaxo. Founded by Sean Parker (one of the Napster founders) and two Stanford engineers, Plaxo is funded by Sequoia Capital and Globespan Capital Partners, it boasts a world-class board including Ram Shriram, Michael Moritz, Jon Callaghan and Tim Koogle.

Plaxo's flagship product offering is Plaxo Contacts, an elegant and much-needed solution for keeping your contact information up to date automatically. Integrated seamlessly and elegantly into Microsoft Outlook and Outlook Express, Plaxo eliminates the chore of having to manually update your contact information. When a person moves or changes companies, Plaxo instantly updates their information for you, and even sends you an email letting you know that the details have been taken care of.

To install Plaxo simply download the client software (only 450k). The first version of Plaxo is free. It is likely that future versions with enhanced features will be offered for an additional cost (much like the RealPlayer model - the basics are free and the full-featured version is available for a small price). Right now there is support for Outlook and Outlook Express, though support for other services such as web-based email are a natural and likely future direction for Plaxo.

The installation is straightforward and you are given several options to ensure that you are comfortable with the process. For instance, you have the choice to keep your information private, or you can choose to wait until later to announce to others that you have joined Plaxo. There is also an automatic backup of your contact information so that you can easily uninstall the product later if you choose to.

During installation you are given the option to let the people in your Outlook address book know that you have joined Plaxo. All of your contacts show up in a list, and whichever ones you check will get a friendly email letting them know your current contact details and asking then to update you with their current contact information.
Their replies are automatically entered into your Outlook or Outlook Express address book.

>From that point on, any time you or anyone you are connected with in the Plaxo Contacts network updates or changes their contact information it will be automatically and effortlessly updated. Additionally, a Plaxo toolbar is added to Outlook that gives you access to synchronizing with the Plaxo server, updating contacts and several other options.

Plaxo also gives you access to your contacts from any computer - simply log in to their website and your contacts database is available via a web-based interface. A nice secondary benefit of this (particularly if you don't use a PalmPilot or PDA) is that you always have a backup of your contacts in case things go awry with your computer or hard drive.

One of the best things about using Plaxo is that every day or two you'll get a notice indicating that someone else that you know has joined the Plaxo network. As time goes on your address book becomes more and more automated, and the value of the service continues to increase.

Two other features that are very useful are Click-To-Connect and Plaxo Signatures. Click-To-Connect shows up as an icon in the upper right hand of your mail window that shows whether or not the sender is in your address book. If they are not, with one click you can add them to your address book and send then an update request asking for their full contact information. Plaxo signatures is a simple wizard that enables users to create a sophisticated HTML e-mail signature based on the information in their Plaxo businesses cards.

With a slew of features and a good user experience, Plaxo feels like a mature product. The company is serious about incorporating feedback and making Plaxo Contacts a great product that elegantly solves the problem of contact management.

Using Plaxo feels a lot like using the early versions of Hotmail - you could tell that it was going to catch on and that a lot of people were going to use it. Plaxo Contacts has all of the signs of a viral product destined to take off in large numbers. If it does it will save us all a great deal of time and trouble.


Books To Read: In Search of Stupidity
Review by Will Iverson

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In Search of Stupidity, By Merrill Chapman
4 out of 5 stars

Brian Lawley and I were in San Francisco recently, checking out the latest comings and goings at LinuxWorld. We wandered up to the Apress book booth, when a bald fellow pointed out a book and said, "good looking guy on the front, huh?"

It turned out that the bald guy on the front was the model for the cover of "In Search of Stupidity: Over 20 Years of High-Tech Marketing Disasters," by Merrill R. Chapman (Apress, 2003, ISBN 1-59059-104-6). I wound up picking up a copy, reading it over Thai food and retelling the stories inside to smug friends - all certain that they would never be so foolish. Oh no, those of us with the benefit of a rich intellect and broad experience, would never make such mistakes.

At first blush, "In Search of Stupidity" sounds like one of those "anti-pattern" books popular in certain corners of the technology press. I originally expected something along the lines of a series of case studies, each explaining what went wrong in a fairly clear fashion, with prescriptions for avoiding such mistakes in the future.

Instead, the book reads much more like an engaging history of the PC software world. As a Mac user through the late eighties and early nineties, I mostly looked upon the PC world with a mixture of horror and bafflement. I couldn't understand why anyone would want to deal with all of the cruft and annoyances. This book walks you through the product management and product marketing mistakes of the PC world in a clear, amusing, interesting fashion. I'm still glad I skipped all of this nonsense and bought Macs instead, but it's very, very informative and entertaining.

There's a certain emotional and instinctual perspective that comes from real world experience - you have to actually have Steve Jobs screaming at you to really understand the situation at Apple, for example. You need to actually be sitting in a meeting and have the director of a group inform you in complete seriousness that their strategy for dealing with their open source competition is "fear, uncertainty, and doubt."
Or be in a group meeting where a product manager stands up and announces that the strategy for getting market share is to drop the price of the flagship product from $999 to $49. I (and most of us at the 280Group) have been in just such situations (and seen the crash-and-burn results), but sometimes you just don't have that, uhh, luxury.

The next best thing is reading about it, and this book does an admirable job of explaining, informing and entertaining. If it manages to save you from a single product- or company-killing mistake, it's more than worth the $17.49 Amazon.com currently charges.


Silicon Valley 4.0 Conference

Two weeks ago I attended the Silicon Valley 4.0 conference put on by Garage.com. The idea behind the conference was to discuss "the future of the future".

Silicon Valley 1.0 was the Semiconductor revolution. 2.0 was the Personal Computer era. 3.0 was the Internet era. So what will be 4.0?

The panels were good - top tier VCs, a conversation with Mike Moritz and Eric Schmidt about Google, demos of interesting new products (including Jeff Hawkins demoing the Treo 600), and as a special guest the demographer for the United Nations, who gave us fascinating statistics about growth rates, India, China, immigration and several other things.

But I have to say, there was no real hint at what Silicon Valley 4.0 will be. Biotech, wireless, nanotech - these were all discussed. But no one said anything with any kind of certainty or knowing.

The big lesson in my opinion came from the first panel - Les Vadasz of Intel representing 1.0 Semiconductors, John Sculley representing 2.0 PCs and Judy Estrin representing 3.0 Internet.

The take away? "No one really knows it until it is happening full force. Even with waves 1, 2 and 3 we could tell we were onto something but we had no idea how big it was actually going to be".

What's the moral of the story? If you see what you think is a wave, bet big and bet fast if you are going to bet at all...

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Brian Lawley runs the 280 Group, a Marketing and Product Management Consulting firm in the Silicon Valley Bay Area. If you need an acting Vice President, Director, or interim Product Manager or Marketing Manager, the 280 Group can provide you with hand-picked, high-quality talent. For assistance with product launches, writing market requirements documents, customer research, developing sales tools, competitive analysis, positioning, pricing or other Marketing or Product Management tasks contact the 280 Group for a free quote and proposal.

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