13 March 2009

Embrace the Irrational

I've spent most of my career working in the Bay Area.
This means I'm deeply steeped in the culture of high technology business.
In particular, I've spent an enormous amount of time working with companies and people that are rooted in or spring out of the traditions and values of enterprise computing. Tech start-ups, venture capital, enterprise software companies... I'm talking about you.

Over the last few years I've spent a lot of time trying to figure out why we have such a hard time applying the models and lessons from consumer marketing to our industries. Within this culture, we actually seem actively hostile to doing this - despite the fact that consumer marketing has a proven track record not only when it comes to customer adoption, but also customer retention.

In many ways, this process for me has been driven by my obsession with understanding why Product Marketing dominates our industry and Brand Marketing is so heavily deprecated (and distrusted).

More recently (very recently) I eventually started to try to figure out the underlying issues that make the learning and application so challenging - as opposed to what I was doing in the past (simply trying to codify the differences and learnings and assuming we could apply them).

And I've realized that there is a fundamental divergence in belief system and values at a deep and early point - and this makes application of methods / lessons from consumer marketing so challenging.

To illustrate what I mean - here are two people demonstrating the fundamentals behind impacting a customer buying decision:


On the one hand - you have consumer marketing's non-rational approach. Appeal to the customer is based on an emotional, intuitive and personal impact (with rational arguments moved to a secondary position).
In the second case - you have enterprise marketing's rational approach. Appeal to the customer is based on features and benefits and a rational argument (with anything non rational removed nearly entirely).

In thinking about this - I'm starting to suspect that within the high tech industry folks are profoundly uncomfortable with the idea that customers are not rational and logical. We are the vulcans of our world. We believe deeply in the idea that a clear, rational argument that demonstrates that your product is empirically the correct choice will result in a purchasing decision.

The problem is that we are selling to human beings. Just because they work at a company that buys your products and perhaps work within this high tech culture doesn't mean that they are not human and thus non-rational consumers.

Folks in consumer marketing are inherently comfortable with the idea that a purchasing decision is not a rational one. This is their power. And this is why they can use the models and methods and tools of consumer marketing so effectively.

Once you accept this - you can start to figure out how to influence this emotional and non-rational decision (through things like story telling).

The trouble is that folks in high tech cannot seem to accept this. So the question is - why?

I've been thinking these days that much of the issue lies in the people.
High tech is a culture and society dominated by people from two educational backgrounds (engineering and MBA programs). If you start going through leadership of companies in the space - these two backgrounds dominate. And these backgrounds teach this very approach to problem solving - in effect teach this exact set of values. The companies that are exceptions, unsurprisingly, are both more effective and less respected within the community. Apple is the great example here.

Of course.... this leads to brilliant examples of the conflict between these value sets like this. You have to imagine someone at Apple laughing hysterically upon reading it - and feeling confident that the competition still doesn't understand why Apple is kicking their ass.

Folks... it's time to change.
If you don't.... it's going to be a long slow death march to the tar pits.

10 March 2009

corporate patronage

As the venture well dries up here in the US... the question is, who (if anyone) is going to take up the slack? And as a related question - do entrepreneurs need this kind of funding anymore?

To tackle the second question first... contrary to what folks like 37 Signals think, the vast majority of start-ups do, in fact, need real funding. More than that, however, almost all start-ups need either a board or something analogous to a board. And these two roles are what venture has traditionally provided.

So... nature abhors a vacuum. Is US entrepreneurship going to simply collapse into the black hole of vanishing venture dollars?

I think there is a decent chance that the venture void is going to be at least partially filled by corporate dollars. The recent NVidia announcement, the continued efforts from folks like Steamboat and Intel Ventures despite the current economy, and the war chests of companies like Cisco and Google to me look like the start of something new.

More accurately, it's the return of something old.
Self-serving corporate investment was what venture capital largely replaced.
Now... admittedly, it was both effective and reasonable. The only big issue is that it has a lower track record of creating truly revolutionary change.
In this case, however, perhaps we can hope for something new - a twist on the old. Perhaps we can combine what Steamboat is doing (corporate venture) with what NVidia seems to be doing (corporate investing) with what Intel does (start-up sector seeding) to create a new newness.
My fear is that without a Xerox PARC in the mix, an over-reliance on corporate money is going to lead to stagnation.

Of course.... there are other options...

06 March 2009

Blu-Ray = LaserDisc

A lot of folks knew it was coming, but with the explosion of solutions like Roku and boxee and NetFlix and BitTorrent and Move Networks and Hulu - I think it's time to say buh-bye to Blu-Ray.

Like LaserDiscs, Blu-Ray is going to become a product for the movie fanatic - the person who simply must own the move/video and for whom the theoretical best possible output really matters. The trouble is - as LaserDisc proved - there just aren't very many people who meet this description.

Streaming now gives us on demand content - of acceptable quality - not tied to a piece of hardware. It's convenient and it is everywhere. Bandwidth to the home is where it need to be to start making this real - the infrastructure and technology on the delivery end is finally there - and consumers simply want the ease of use.

The first question is... who is going to figure out the optimal business models first?
The second question is... which CE companies are going to miss the boat? (hint.... that's a trick question)

05 March 2009

Valuable Reads

Ironically, over the last few days I've read two articles that each on their own are interesting / valuable / intriguing. Each on their own are, in my opinion, must-reads for anyone who considers themselves a "professional" in the design field.

What is really exciting is that reading both together (or in the same time frame) gives me hope that Design will truly start to move forward in a truly valuable direction.

A Periodic Table of Form, by Gray Holland

Article number one is, in my opinion, a brilliant, colouring outside the lines, incomplete but tantalizing look at form and design. This article is something that everyone needs to read - because there are some very, very valuable points being made - but also because Gray is trying to do something important here.
For the consumer, it's easy to forget how much the emotional response to an object determines his or her relationship to it, but this forgetfulness can be plausibly explained by the dominant role our analytical mind plays in formulating language.
Form has meaning; it can touch us at such a primal level that our mind is left scrambling to rationalize our emotional reactions.
There are, however, two issues with the article.

First - I would suggest that form is less a periodic table (structurally) and more a grammar and as such the study of semiotics would be invaluable in understanding meaning in this context.

Second - there is one key assumption that I would dispute.
For the purpose of this argument I propose that form (or Design), in the context of both the natural and man-made world has two jobs: to be the messenger of a certain experience; and to fulfill on that promise.
While this is a noble goal - and a pragmatic one - I feel that there are times when form's purpose is to be the messenger, and then to deliberately fail to fulfill on this promise. In this case, when instead giving something valuable but unexpected, design can create delight.

Despite these two disagreements - I think Gray's article is fantastic albeit incomplete and really hope that he continues to think about this and we see future instantiations. More than that - this article really is a must read for anyone in the design profession.

Design: It's Not All About You, by Nick de la Mare

Article number two is a perhaps self-serving but none-the-less accurate and important discussion of the importance of business in designed solutions. More that that, it is a veiled attack on the (endemic) idea that designers can create (successfully) for the end-users alone.
A product will only become successful if it makes it to market. Over time its success will be judged on its ability to generate more income than it costs to maintain. In other words, a wildly successful product does no good if its long-term costs bankrupt the company launching it.
Historically, designers haven’t been overly concerned with understanding the balance between the pillars of user, brand and business. A sole focus on users does little to create synergies between organizations and individuals, or to create products with meaning within the larger context of market. It just reinforces the sense that design organizations often don’t get business metrics.
I think all of us in the design profession have become a little carried away over the last few years. With each cover story in BusinessWeek, with each fawning Bruce Nussbaum blog post, we have started to believe our own press - to believe we really are the messiah for businesses (and to believe our shit don't stink).

This article attacks the arrogance at the core of this issue.

Where I think it fails is in two spots.

First - while it attacks our arrogance, it doesn't expose our laziness or our greed. Far too often we do things we know are wrong because of our own business needs. We know we simply cannot develop a cogent and successful strategy in 4 days - but we need the client and the revenue so we take the work.

Second - the recommendation from the article veers from being Right to being merely self-serving.
When I think about the operating principle driving an ideal design consultancy, this is what I see: Cross-disciplinary teams working collaboratively with clients to understand business, user and brand needs. Then designing empathetic systems, services and products that leverage all aspects of the relationship between these key pillars. The best designers will be strategists, those that understand each element in the ecosystem and build beautiful, sustainable bridges between them.
Effectively this might as well have said - "the future is all of you hiring frog design."

I honestly don't know if cross-displinary teams are the answer. They could be. But so could IDEO's t-shaped people. So could small boutiques headed by the unique geniuses who can see all the angles. Only time will tell.

Despite these two flaws - again - a great article and a must read.

And then we put the two together.
And we see a profession that is starting to look outside of its own disciplines - and deeply at its own discipline - and in both cases is starting to understand the relationships and structures and interdependencies and inheritances that bind this all together into something important.


New Gig

I'm very excited.

I've taken a gig with Yves Behar's firm fuseproject.
This is, to me, both a delight and an honor.

I'm going to be spending the next couple months doing Corporate Development - helping to expand the defined service offerings. We're going to elevate the interface / interactive offering.

This is, as you can imagine, something I think is very cool.