Facebook Unveils a Search Tool, Finally

Today, Facebook launched Graph Search.  Ho hum.  This is a concept I wrote about back in June 2009 :)

Defining the "Smallest Unit of Value"

In my last post, I talked about "the smallest unit of value" as an approach to defining an initial (or new) product offering that will lead to early success.  I defined it as,

"...the smallest unit of value you can deliver to a segment of users/customers that is consistent with the broader vision you are trying to execute."

I espouse this approach because it enables startups to focus their development resources and their marketing messages, both critical elements when trying to gain initial market traction.  But how does an organization find their smallest unit of value?  This post will lay out a framework to answer that question.

Start with your vision.  When a startup is initially formed, its founders usually have an understanding of the technology they want to build and how it will change the world.  This can be considered the vision of the company.

Develop a list of "must have" needs your vision addresses.  When developing this list, it is important to be critical and just include "must have" needs, not "nice to have" ones.  Developing this list typically involves performing some market research; ideally, a mixture of qualitative interviews and quantitative surveys.

Develop at least one positioning statement for each of the "must have" needs.  When developing positioning statements, I like to use the template presented in Geoffrey Moore's landmark marketing book, Crossing the Chasm:

• For (target customers)
• Who are dissatisfied with (the current market alternative)
• Our product is a (new product category)
• That provides (key problem-solving capability).
• Unlike (the product alternative),
• Our product (describe the key product features).

This step in the process requires some creativity because it is being done, ideally, before the product is designed or built.  It might make sense to develop more than one positioning statement for a particular need since there may be different approaches, from a product perspective, that can be taken to address a need.

Developing these positioning statements early in the process is important because it forces an organization to think about how they are going to talk about their offering, at a time when they have very few constraints.  Most often, positioning statements are developed after a product is designed and built, and they end up being less-than-ideal since they are constrained by the product that was built.

Eliminate positioning statements from the list.  Review the list of positioning statements critically, with the goal of reducing the number of statements.  Questions to ask as you review the statements include:

• How easy/difficult is it to reach the target customer?
• Is the product description easy to communicate in a few words?
• Does the product category leverage any hot industry trends?
• How noisy is the market for the product category?
• How significant is the competitive differentiation?

Pick one positioning statement.  It can be very difficult to get the list of positioning statements to just one.  Sometimes, one statement will feel right and will jump out from the list.  More times than not, however, coming up with the final statement involves a "gut feel".  No matter the process, the important thing is to come up with just one statement.  As Joe Kraus says in his blog post, Your Product: Describe vs. Discover...

...you need to divide your product into one (maximum two) features/benefits you describe and let the user discover the remaining beauty and scope and breadth of your product. 

The describe/discover framework, I’ve found, helps founders through the knothole of reductionism. They aren’t limiting the product in their minds, they’re limiting and staging how it’s presented. 

Before you launch your product, ideally before you even start developing your product, ask yourself the question, “what’s the one benefit we’re going to describe?” If you can’t answer that question, you’re not ready for launch. Once you answer it, orient your UI, marketing, PR and sales around that.

Start designing and building the product.  Now that you have your one positioning statement and have an understanding for critical elements, like the target customer, the "must have" need you are addressing, and how you want to describe your product, you will be amazed at how easy it is to design and build your product.  And later on, when you are ready to launch the product, much of the difficult positioning work has already been done and hopefully, you will just have to fine-tune your messages.

Developing "Toys" for the Enterprise - It's About Delivering the "Smallest Unit of Value"

Today's TechCrunch post by Aaron Levie of Box - Rise Of The Enterprise "Toys" - and the recent acquisition of Yammer by Microsoft prompted me to dust the cobwebs off of my blog and write a post that I have been thinking about for years.

In his post, Levie talks about enterprise solutions that are initially viewed as "toys" and then they develop into "solutions".  As he puts it...

Students of the Innovator’s Dilemma know that a new technology starts out being just “good enough.” Often, an early solution only serves a niche part of the market with limited requirements. This naturally shields it from the incumbents’ radar, but what starts out as a nascent product attacking an unprofitable or unattractive market segment can quickly mature into a disruptive solution that becomes more than adequate for a broader population.

I completely agree with this approach and I often use - as Levie does in his post - Yammer as the poster child.  When they launched their initial offering in September 2008, they touted it as “Twitter for Companies”.  Many influencers viewed it as a "toy" and as this chart depicts, many of them didn't give Yammer much chance to succeed.  Two years later, they launched Yammer 2.0 as a “Full-Fledged Social Network for the Enterprise” and the industry started to take them a bit more seriously.  Now, after being around for less than four years, they are being acquired by Microsoft for $1.2 billion.  Not bad for a toy.

Throughout the years, as I have consulted for many early-stage enterprise startups, I have found that it is very difficult for many entrepreneurs, particularly those who have been in the enterprise space for a while, to think about developing a toy as they figure out how to penetrate the market.  They often go after the big solution from the onset and end up having a difficult time experiencing much success.  This happens for a variety of reasons.  Having the solution mindset often results in trying to build a broad offering, which is difficult when you have limited resources.  Also, communicating about a broad solution often diffuses the marketing message, which is not great these days when laser-focused messaging is critical to rising above the noise.

The approach I espouse to my early-stage clients is what I call, "delivering the smallest unit of value".  What is the smallest unit of value you can deliver to a segment of users/customers that is consistent with the broader vision you are trying to execute.  Having this type of narrow approach will enable you to focus your development resources and your marketing messages.  

I think it is important to note that taking a narrow approach initially does not take away from the ultimate vision of a company.  But a company that doesn't get started with a focused offering may never experience the early success they need to obtain the resources required to execute their long term vision.

What do you think of developing "toys" versus "solutions"?  What are some other good examples of startups that either succeeded by initially developing a toy, or did not succeed because they started with a solution?

"Influencer Relations" On My Mind

I blog in spurts. How often I blog is a reflection of not only how busy I am, but how excited I am about something that is happening in the technology space. Two, three years ago, I was really into a concept that I called knowledge networking. I now find myself spending a lot of time thinking about the notion of "influencer relations". You can also think of it as "analyst relations 2.0".

Through the PR function, technology start-ups spend a good amount of time and resources developing relationships with press and industry analysts. Historically, the number of press and industry analysts that had influence over a market segment was relatively small so the interactions were small in number and quite structured (i.e., scheduled calls/meetings).

Now, however, due to social mediums like blogs and Twitter, anybody with a following can have an impact on a market segment so the notion of influence has been democratized. This has led to an "influencer ecosystem" that is large in number and real-time (with Twitter, in particular). In addition to the top-tier press and analyst community that everybody focuses on, many market segments have hundreds of other people that blog and tweet and who have hundreds, if not thousands, of followers.

The process of evaluating the influencer ecosystem for a market segment and then engaging with a market's influencers in online conversations is what I call "influencer relations". Engaging effectively with market influencers is not easy but it can be a cost-effective and powerful way to increase the awareness of a brand and to generate traffic to a website.

So "influencer relations" is what I am thinking a lot about these days (pretty sad life, huh?). More to come.

Facebook as a Leading News Reader - I Told You So

I haven't been blogging for a while but I couldn't pass up the opportunity to pat myself on the back. Last March, I did a post, "RSS for the Masses", where I said...

If you take the new version of what used to be called Pages and combine that with the new real-time nature of News Feed, you have an RSS-like capability for the masses. Now, media organizations, like CNN and NY Times, will have their own mini-feed and they will be constantly making status updates with their latest headlines. So if users "friend" these organizations, they will be able to see the headlines stream through their News Feed in real time.

Today, ReadWriteWeb posted an article, "Facebook Could Become World's Leading News Reader (Sorry Google)", where they say...

Is Google Reader better than Facebook for reading feeds? Maybe. There are RSS readers that are better than Google Reader, too. But in terms of change-the-world feed-reading mass adoption - it's most likely to be Facebook that gets millions of mainstream users on board.

Yes, if you saw me right now, you would see a cocky grin on my face :)

Facebook and Social Search

Well, another upcoming feature within Facebook has gotten me to shake off my blogging cobwebs and do a little writing. In fact, it has gotten me to take another look at a blog post I started on December 30, 2008 and never finished...

Over the last year or so, I have been intrigued by a concept I call "knowledge networking". I have written a bunch of posts on the topic and define it as...

the ability for people to connect with the purpose of leveraging each other's knowledge. This is different than social networking where people connect with the purpose of communicating with each other.

Most of my perspectives have been about the role knowledge networking would play in the business world but there is also a place for such a concept in the consumer world. For example, if I was thinking about going to Costa Rica for a family vacation, wouldn't it be nice if I could easily find all of my friends who have already been there? This type of capability is being called "social search".

Recently, TechCrunch published an article entitled, "The Future of Social Search (Or Why Google Should Buy Facebook)". The article talks about the potentially powerful combination of Google's search capabilities with all of the "social" data Facebook has (a la News Feed). I agree this would be a powerful combination but I question why can't Facebook do much of this on their own by enhancing their mediocre search function.

I continually get frustrated with Facebook's search capabilities.

I never finished that last paragraph and now it looks like I don't have to. Yesterday, Facebook disclosed that they have begun limited testing on a new version of Facebook Search. The details can be found here but most importantly in my mind, you will be able to search on the contents of your News Feed (i.e., all of the updates made by your friends). I believe this will be very powerful.

So to go back to the example I used earlier...if I am thinking about going to Costa Rica for a vacation and wanted to find out who else I know has been there, I will be able to do a search on "Costa Rica" in my News Feed and any update that mentions it will be shown in the search results.

It's not clear when Facebook will roll out the new version of search to all of its users but I am very excited about its potential.

RSS for the Masses

Yesterday, Facebook conducted a press event where they previewed changes they are making to their service. Details can be found here. All of the major tech blogs have communicated their take on the announcement. AllFacebook just posted an entry that tries to straighten out "the wide-range of semi-accurate reporting taking place".

I am not one to say whether the reporting has been accurate or not but I do feel that everybody is missing the boat on one of the important implications of the new Facebook features. If you take the new version of what used to be called Pages and combine that with the new real-time nature of News Feed, you have an RSS-like capability for the masses. Now, media organizations, like CNN and NY Times, will have their own mini-feed and they will be constantly making status updates with their latest headlines. So if users "friend" these organizations, they will be able to see the headlines stream through their News Feed in real time. Nice.

Randy Pausch

Today, Randy Pausch passed away. I blogged about his "Last Lecture" a couple months ago. In the final months of his life, he touched more people than most of us will ever touch in our entire lifetimes. He taught us how to live and how to look at life differently. Thank you, Randy.

Google Opens Up Knol

It's been a couple months since I have done a blog post (too busy starting a company) but today's announcement by Google on the general availability of Knol is one that I can't let slip by. Back in December when Google originally announced Knol, I did a blog post because I think it could be an enabler 0f what I have been calling "knowledge networking". It will be interesting to monitor how Knol is used and whether the author-centric nature of it leads to behavior that is different than how other services like Wikipedia are used.

The Mainstreaming of Micro-Blogging

A few weeks ago, there was a lot of talk in the tech blogosphere about when, if ever, Twitter will become mainstream. I added my two-cents worth to the conversation by saying there needs to be more purpose around the service before it goes mainstream (assuming they will fix their stability problems). As I think about this more, I believe the significant trend has less to do about Twitter and more to do about micro-blogging emerging as a mainstream concept.

The reasons I believe micro-blogging will become mainstream are similar to the reasons Twitter has become popular:

• It is easy for people to think and type/text in bite-sized (or in the case of Twitter, 140-character sized) chunks.
• The adoption of smartphones -- and the iPhone in particular -- has brought text-messaging to a new group of users (beyond the Gen Y'ers who grew up with text-messaging as a primary means of communications).

Twitter is not the only service out there that supports micro-blogging; most notably, Facebook and MySpace also do so with their status updates. I think we are just at the tip of the iceberg and I expect we will see many more services ride the micro-blogging trend in the future.

The Last Lecture

I just read a WSJ article about Randy Pausch's "last lecture" and I was reminded how wonderful it was. I thought I blogged about it previously but realized I didn't (I had sent an email about it to a bunch of my friends). It continues to be one of those things that rise "above the noise" in my mind so I would be remiss if I didn't write a post about it. The email I originally sent to my friends is below. If you haven't seen the lecture, it is time well spent.

Many of you may have heard about the “last lecture” given by Randy Pausch. For those of you who haven’t…

Randy is a computer science professor at Carnegie Mellon University. Recently he was told that he has pancreatic cancer and only has months to live. He is 46 years old. He was asked by Carnegie Mellon to give his “last lecture”. The lecture is being viewed by many people over the Internet and the Wall Street Journal had a recent article on people’s reaction to his lecture.

If you want to view his lecture, it can be seen here.

The entire video is quite long – about 1 hour and 45 minutes. I recommend viewing at least some of the video. Randy shares some life lessons that we all can use, especially those of us who are parents. It is also impressive to see how he is dealing with “the cards he has been dealt”.

To help you “fast forward” through portions of the video, here’s a quick overview…

After an introduction given by a colleague and friend at Electronic Arts, Randy’s lecture is divided into three sections:

• His childhood dreams – He lists his childhood dreams and how he has “checked off” most of them.
• How he has enabled others to accomplish their dreams – This section is primarily the work he has done as a professor. Randy’s specialty is virtual reality. If you aren't interested in this stuff, this is one section you could skip.
• Lessons learned – In this section, he talks about the important people in his life and some of the lessons he has learned along the way. At the beginning of this section, he talks about his parents and the freedom they gave him to do the things he wanted to do. This section starts at about 1 hour and 3 minutes.

After the lecture, a few people pay tributes to Randy. Compared to a funeral, where people say wonderful things about a person after they have died, this is what I have always thought should happen instead – have people say wonderful things about a person while a person is still around and can feel the appreciation.

Enjoy…

Perry

A Purposeful - and Fun - Application of Twitter

Yesterday, I did a post where I argued that in order for Twitter to become mainstream, it needs to have a more clearly defined purpose. Well today, TechCrunch did a post on Project Vino, an Australian wine site focused on community recommendations, and their Twitter Wine Tasting.

Twelve prominent Australian Twitter users will take part in an evolutionary new twist on the the traditional wine tasting format. What separates this wine tasting is that the participants could be anywhere in the world. They could be in front of their computer at home or on their mobile phone in middle of the Sturt Desert. All will be connected in real-time however by the latest and greatest online communication tool - Twitter.

This is a step in the "purposeful" direction I discussed in my post yesterday. As I find other "purposeful" applications of Twitter, I will make posts about them.

To Go Mainstream, Twitter Must Have More Purpose

Yesterday, Kara Swisher did a post that concluded Twitter is not yet mainstream. She came to this conclusion based on an informal survey of people she conducted at a wedding in Washington, D.C. this past weekend (nobody in the group of thirty people surveyed knew what Twitter was). The fact that Twitter is not yet mainstream is not a surprise to anybody. To substantiate this point further, data just released by Hitwise shows that Twitter accounts for a very small percentage of Internet traffic in the U.S.

Kara's post, however, did spawn a lot of discussion in the tech blogosphere about when/if Twitter will become mainstream. It even prompted Jeff Clavier of SoftTech VC to do his first blog post in months (he has been just Twittering). I agree with many of the points made by Jeff: that Twitter -- and micro-blogging, in general -- will become mainstream; that micro-blogging is less time consuming than blogging and, therefore, less intimidating to many people; and, that the adoption of smartphones, like the iPhone, will make micro-blogging easier for people.

There is one point, however, I have not seen mentioned by anybody, which I believe is the critical success factor in making Twitter mainstream -- and that is purpose. I feel that for more people to adopt micro-blogging, there needs to be a more clearly defined purpose. I think there are large numbers of people who are not comfortable putting out "what they are doing" for the whole world to see. It's not because they are sensitive to making their posts public but it's because they don't understand "why" they should do it.

I believe the adoption of Twitter will accelerate tremendously once it is applied in a more purposeful manner. Take the concept of micro-communities as an example. I think it would be powerful if users had the ability to go into a "Twitter room" and interact with others about a particular common interest -- whether it is a sports team, or a hobby, or whatever.

It is this type of purpose, I believe, which will make Twitter mainstream.

The Guiding Principle of Web 2.0

Yesterday, I spent the afternoon at the Web 2.0 Expo. The opening keynote address was made by Tim O'Reilly where he gave his perspective on the current state -- and future of -- of Web 2.0. For me, the takeaway from the speech was Tim's guiding principle on what makes an offering "Web 2.0". This is me paraphrasing...

A service that derives insight from user-generated data and then delivers to users capabilities based on that insight.

As a prime example of this principle, he talked about Wesabe (O'Reilly is an investor in the company). Wesabe, like Mint, is a next generation version of Quicken. It looks at your spending transactions to provide you insight into how you spend your money. By leveraging the spending data of their users, Wesabe recently introduced a new capability where it can compare different vendors (auto mechanics, for example) to see how much, on average, people spend at each of the vendors. That is incredibly valuable information for anybody that is at all price sensitive.

I've heard O'Reilly talk about this principle before but it's always a great reminder for me.

Can Marketers Have Conversations?

Today, Sam Lawrence, the CMO of Jive Software, did a post entitled, "Stop guarding your precious brand". The basic message is that marketing and PR people are too controlling, they need to let go, and they need to have "conversations" with the market...

Marketing needs to be released from being solely responsible for changing perceptions or driving leads. They should be enabling the organization to make meaningful, positive customer experiences and connections. This may seem like a subtle shift but when Marketing can feel comfortable becoming listeners instead of blasting sales messages, dramatic change ensues. Suddenly, employees start to really learn about what interests the market without a commercial agenda. Real conversations begin and Marketers begin to enlist the assets of the organization. This results in much more positive customer experiences. I think of this as ROB (”Return on Behavior”) others may think of it as some form of Net Promotor Score (NPS).

I agree with Sam but I do think it is a difficult mindset for marketers to become comfortable with. I have been in the enterprise software space for much of my career and historically, organizations have spent a tremendous amount of time crafting the perfect messages they want to push out to the marketplace in preparation for marketing events (i.e., a product launch). In an earlier post, I questioned whether the time spent in developing the perfect marketing messages was worth it and proposed a different mindset...

A launch is the beginning of a continuous conversation, not a proclamation that needs to be "set in stone" for a period of time. Sure, you don't want to confuse the marketplace and change your messaging often. At the same time, however, it is now very easy (thanks to the Web, pdf, and PowerPoint) to evolve your messages as you learn more from the marketplace.

With the Internet, there are so many tools available to listen to the "voice of the customer" that it is a shame for marketers not to take advantage of them to have a conversation with their marketplace.

The Price That is Really Paid When a Start-up is Sold

I've written in the past about what I perceive as a disconnect between the liquidity events currently available to start-ups and the VC funding model. In a blog post today, Fred Wilson suggests that there is a need for a new path to liquidity. His argument is sure, people make money when big companies buy start-ups but that comes with a different type of price...

Except I am also a user of these services. I see what happens when a company gets purchased. The service languishes. The team leaves. It stops getting better. And often gets worse. And so even though I am happy to take the money, I am left wondering, frankly wishing, if there is a better way.

That is a very good point that I hadn't thought about.

Another Potential Knowledge Networking Solution

I have written a lot about a concept I call "knowledge networking" and have written in the past about Twine from Radar Networks as a potential solution. Today, ReadWriteWeb wrote an article about a new solution called Qitera. Qitera, like Twine, is using semantic technologies to help people leverage information among each other. The solution is currently in alpha and there aren't a lot of details on their website but one of the messages in their slide show that is included in the ReadWriteWeb article is...

How to instantly search your peer's knowledge to get smarter?

To me, this is what knowledge networking is all about. I will be keeping an eye on Qitera.

Twitter as a Marketing Vehicle

Josh Catone of ReadWriteWeb just did an interesting article on a new Twitter marketing experiment called Twittermethis. Besides explaining the concept behind Twittermethis, the article talks about how Twitter is a great vehicle for push marketing...

With that in mind, it is easy to see why the most successful marketing done via Twitter is of the "push" variety. Bloggers do this a lot when we tweet about posts we've just published. The hope is that the link will spread virally through the hubs and reach as many listeners as possible.

The key to successful push marketing on Twitter is to attract the right followers (people who have a lot of followers of their own and will retweet your message), and to make sure you don't do it too often. Unless, like the most popular person Twitter, your account is set up specifically for push marketing.

As a marketer, I love the process of figuring out how to use services like Twitter and Facebook as marketing vehicles (dare I call it "Marketing 2.0"?). It's a heck of a lot more fun than "old" vehicles like search engine marketing.

The Age of Personal Brand Marketing

Sarah Perez of ReadWriteWeb posted an article today about a recent study at the University of Texas that shows you may not know your online friends as well as you think you do...

The study, which utilized a Facebook getting-to-know-you type application, "You Just Get Me," showed that the typical information posted on social networking sites, like favorite books, movies, and music, favorite quotes, majors, hometown, and other similar personal information, does not always give others an accurate impression of you.

...Surprisingly, answers to most of the basic type of questions, like those found on social networking sites, did not help users figure out what each other were "really" like. Instead, the researchers found that when a user posted things on their profile like their most embarrassing moment, proudest moment, or spirituality, their personalities were much better understood.

These results do not surprise me. My belief is that to a large extent, online profiles reflect how people want others to perceive them, kind of like a resume, and don't necessarily reflect the true person.

Sarah's article went on to say...

Gosling was drawn to this research because he believed that how one is perceived online is more important than ever these days since social networks are often where other people get their first impression of you. He also mentioned that your social networking profile could also impact your employment opportunities as savvy employers have learned to search out the online profiles of potential new hires.

I also agree with this. Whereas before, when a resume was one of the only tangible profiles of a person, a person now has many online profiles (MySpace, Facebook, LinkedIn, etc.). I think it is important for a person to keep in mind how these different profiles reflect themselves. Often, before I talk to somebody for the first time, typically for business reasons, I am now in the habit of checking their LinkedIn and Facebook profiles to get a basic understanding of who they are.

Whether you like it or not, we are now in the age of personal brand marketing.

The Brilliance of Facebook

During my consulting gigs to start-ups (and as I consider starting one of my own), I’ve recently noticed how often I think about how Facebook (the company) addressed particular issues and how often I come to the conclusion that their approach was brilliant. Here are a few examples that I feel demonstrate the brilliance of Facebook…

• Go-to-Market Strategy: For its initial go-to market strategy, I feel it was brilliant for Facebook to start with one very focused user segment – college students – even though their technology probably could have handled multiple user segments at the beginning. By starting with college students, Facebook was able to test out their technology with a pretty forgiving user base and build up demand as the buzz about their offering grew. Having this type of discipline is difficult for a lot of entrepreneurs, especially technologists. It is not uncommon to find technologists who like to expose all of the different capabilities of their technology platform to all types of users from the get-go. As well-documented by Geoffrey Moore in the high-tech marketing bible, “Crossing the Chasm”, this is usually not a very smart approach.

• News Feed – I think the brilliance behind News Feed is best illustrated by the fact that it has spawned a whole new product segment, called lifestreaming. With the development of News Feed, Facebook insightfully tapped into the voyeur in all of us. I always use Facebook as an example of a solution that doesn’t necessarily address a pain point but one that fulfills a psychological need. I think many of us – especially those who come from the enterprise software space – get too obsessed with addressing a pain point. In this day and age where individuals use multiple Web services regularly, not all services need to address pain points; it is okay if some of them just fulfill psychological needs.

• Beacon – Even though Facebook’s initial execution of Beacon was questionable and the jury is still out on its ultimate impact, I feel the concept behind the feature is brilliant. I do believe that certain recommendations made by friends carry more weight than those made by people you don’t know and Beacon attempts to make that real.

I hear from people who know him that Mark Zuckerberg is a person well beyond his years. The examples I described above demonstrate decision making that is creative and mature for a young company with such young people at its helm. I’m sure Mark has had a lot of help along the way but he needs to be given a tremendous amount of credit. Well done.