Social Networks Kill Product Lifecycles

A fascinating article in the New York Times crystalized this for me.  I had been thinking about this for a long time, but had yet to really have it hammered home with use cases.

Social networks have disrupted corporate communications in dramatic ways and could very well do to the advertising industry what free content on the internet has done to the newspaper publishing industry.

Follow along here for a bit before we get into the examples in the article.

My second job out of college after a stint as a single tier and two tier distributor sales rep was as a marketing specialist in their field service group.  Direct mail marketing was one of my responsibilities.  Write up a little ad copy into a tri-fold piece, find the right list, affix the address stickers, and off they went.

But that could take weeks.  The GM had to wordsmith the copy.  Then it had to go to corporate and, ultimately, to an ad agency.  Lather, rinse, repeat.

All for a simple direct mail piece.

Today people track various news feeds.  When something pops up, businesses have to respond instantaneously with blogs, tweets, Facebook responses and all the rest.  Major events drive that at TBR and elsewhere.  You know?  Things like Google buying Motorola Mobility, or HP having some curious declarations as part of its earnings announcement, or Steve Jobs, sadly, announcing his retirement from Apple.

Within hours of events like that, hundreds of unfiltered blog communications hit the social networks.

News travels fast as they say.  The velocity of commerce gets ratcheted up by more technology enablement in the business value chain.

Now jump back to the article I referenced about the rapid killing off of major development initiatives.  HP’s announcement killing the TouchPad seven weeks after a massive launch campaign had me scratching my head.  This article put the TouchPad in context.  Here are some paraphrased examples:

•  Microsoft shut down Kin mobile phones after 48 days on the market.
• Google launched Wave in May of last year and cancelled it 77 days later.
•  Palm announced a tablet, the Foleo, at the end of May 2007 and killed it off around Labor Day of that year.
• In 2009 Cisco acquired Pure Digital, who made the Flip camcorder, and then shut down the unit one day prior to its major product launch

So what gives with all this?  Where was the ability to get products to market, test them, improve them, and expand upon them.  No more solid singles.  Each product has to be a home run.

It goes to social networking.  It goes to loss of control of the market message.  Businesses have realized they must embrace social media to try to frame the message, but they certainly can no longer control it.  Sure, they push tweets, they have executive communications writers ghost write blog posts for key officials.  They put up Facebook pages.

And company lawyers reach for the digitalis to forestall coronaries, but business has no recourse.  Businesses have to be where the image makers are, and today anyone with a cheap PC and an axe to grind can try to cut products off at the knees and hence create negative images businesses must counter.

So early product adopters set the pace.  No more phased roll-outs in one geo or another as essentially live production beta test beds.  Seeing how something “plays in Peoria” doesn’t cut it anymore, as Peoria is networked into the world.

I recall a dustup on the iPhone4 based on the antenna not working.  It was determined through the social network of early adopters that it took place when people held the phone in their lefthands.  Antenna placement, apparently.  I also recall wincing after Steve Jobs’ off-the-cuff response of “Don’t hold it that way,” rocketed throughout the ether.

Now, that remark, quite obviously did not hurt Jobs, the iPhone 4, or Apple.  But not many individuals, products, or companies have sufficient cache to get that kind of marketing mulligan anymore.  To put this in context, I followed HP as a research analyst back when it was transitioning from a 16-bit minicomputer architecture to a 32-bit one and was fairly late based on difficulties with the backward compatibility of the operating systems.  Its customer base remained unusually patient, causing me to gain incredible respect for their operation that built its customer loyalty.  HP certainly did not receive that same latitude on the TouchPad, now did it?

While once companies could control market messaging, they are now truly at the mercy of the energized consumer.  Jump with me now to politics in general and Iran specifically, but hold the thought of market messaging.

Iran had student uprisings explode across its country, and, being a totalitarian regime, it shut down news outlets and denied to the outside world that there was any turmoil or that there had been protestor fatalities.

But a single smartphone picture of a dead co-ed got out of the country, into the market of global public opinion and brought the regime to its knees.

If Iran can’t control its market messaging, then how are major commercial enterprises in a free market going to do that?  How are they going to test products if those who accept the quick spiff to test it can then go out and tweet anonymously about the product being a dog?

Technology history in business illustrates time and again how technology enablement increases the velocity of commerce.  It goes over in waves.  High performance workstations shortened design cycles.  Supply chain management (SCM) systems drove inventory turns.  Electronic document interchange (EDI) drove payables and receivables and shortened the float waiting for funds to clear Federal Reserve Banks.

So it is a good thing that design cycles have been shortened, because now companies shovel against the tide of public opinion with multichannel marketing strategies in the domain of social networks over which business have precious little control.  Social networks dictate product acceptance rates and product lifecycles in far quicker and less forgiving fashion than ever before.

Putting Steve Jobs in Perspective

Update: This was written prior to Mr. Jobs' passing upon his announcing his resignation from Apple


Steve Jobs, the Chairman, co-Founder, revivalist, and heart and soul of Apple Computer announced his resignation yesterday, effective immediately.  This part of the letter says it all: 

“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.”

Steve Jobs is an extraordinary business mind.  Not a lot of people seek to start companies.  Of those who do start companies, 80% fail in the first two years, and an additional 16% go under in seven years.  Steve Jobs built a thriving business, stepped away from it by luring John Sculley from Pepsi to run it when investors were leery of Mr. Jobs’ ability to do it himself; left altogether, and then returned to bring it back from the brink in 1997 to where it is today.  Oh yes, and in between he founded NeXT and rocketed Pixar Studios to the fore in the animated film industry.

A founder and a turnaround artist from a business perspective.  Consider this in terms of other great technology business founders over the years:

1.  Ken Olson of Digital Equipment Corporation founded the firm in the late 1950s while giving away an excessive amount of equity to his venture founders to get it rolling.  In the late 1980s when IBM’s disparate minicomputer architectures clouded IBM’s messaging, Digital’s market capitalization exceeded that of IBM’s.  When things turned on Digital, Mr. Olson could not adapt.  He could not stomach shedding staff nor could he shed Digital’s matrixed management structure that enabled many people to take credit in upswings – and run from accountability in down markets.  Digital was ultimately acquired by Compaq.
   
   
2. Rod Canion of Compaq Computer.  The company started by designing a mediocre PC that weighed about as much as an IBM Selectric typewriter and put a handle on it.  In so doing Compaq proved you could purchase non-IBM devices and not get fired while also creating the portable computer segment – a segment now threatened by Mr. Jobs’ Apple iPad, we should add.  Rod Canion could not adapt, either, ultimately being forced out by the Ben Rosen and the Board of Directors and replaced by Eckhard Pfeiffer.  Compaq was ultimately acquired by HP after having mismanagedg the Digital acquisition and represents the core of the operations current HP chairman Leo Apotheker curiously announced he intends to restructure or spin off.
   
   
3. Scott McNealy of Sun Microsystems came in behind Apollo Computer in the workstation market, opted for Unix rather than a proprietary variant, amassed apps, and buried Apollo.  This firm, too, ultimately fell by the wayside, getting picked up by Oracle and Larry Ellison.
   
   
4. Bill Gates of Microsoft, of course.  His story is still “to be determined” as the company faces some its most serious threats since its inception today largely due to Apple.  The reins have been passed to Steve Ballmer, and there are many in the industry who believe they need to be taken away.  Will Gates return?  Will Microsoft be toppled in the business client operating system market by Android or Apple?  Mr. Gates is a great entrepreneur, but Microsoft has not encountered business threats akin to what Apple endured (and in some ways brought on themselves) in the early 1990s when Steve Jobs returned through Apple acquiring Next.

There are countless others.  Phillipe Kahn of Borland.  Mitch Kapor of Lotus.  Ray Noorda at Novell.  Edson De Castro at Data General.  Larry Ellison, of course.  What Lou Gerstner did at IBM merits mention even though he was not a founder.  For a man internal IBMers derided at the time as “the cookie salesman” based on Mr. Gerstner having come from Nabisco, he certainly saved IBM from self-immolation by pivoting them somewhat kicking and screaming away from big iron and into software and services.

I have discussed the basic business operations in all of the above rather than, necessarily, Mr. Jobs ability to peer around the corner and develop – no, INVENT – products and create markets.  In catching an MSNBC special on Mr. Jobs a few weeks ago, I was struck by an assertion in the documentary that Steve Jobs directed his product development teams to try to render obsolete the existing Apple product lines.

I had been taught this concept by a business mentor years ago.  During the course of discussions he made clear it was a hugely difficult thing for companies to accept reality and essentially launch products that would kill – or seriously weaken – core product lines.  As he put it, however, “Do you want to slit your own throat, or do you want to have your competition do it for you?”

Steve Jobs relished the chance to slit his company’s own throat.  Over and over again.

And this is why you have to go outside the industry and into the history books to find a comparable business mind, and the current comparisons coming out of pundits are with Henry Ford and Thomas Edison.   The former brought transportation to the masses, the latter wired the home.  Mr. Jobs brought consumer access to the wire, but neither he nor Al Gore invented the internet.

Today the client side computing market faces disruptions the likes of which it has not seen in decades, and it can largely be credited to Steve Jobs and the iPad.  The merging of consumer and business computing tasks onto this single device will revolutionize the client side of business IT operations.  Curiously enough, it could shake out with Apple, a company that has diligently eschewed the business environment after Mr. Sculley’s ill fated foray into the segment, dominating the business client landscape.

There are many, many exceptional business minds taking risks and creating companies in the high technology industry.  We love the stories of the two guys in the garage getting started akin to Messrs. Hewlett and Packard and Messrs. Jobs and Wozniak.  

But I cannot think of one person who built a company.  Left it.  And returned to pull it back from the brink of extinction to catapult back to the top of its industry. 

All of this and revolutionizing the world of information access and sharing, too.

A fascinating man and company to follow.

What Holds Back Tablet Adoption In Business?

All sorts of arm chair analysts wax pedantic about Tablets.  They throw out the term "consumerization of IT" and all nod, lemming like, as to the wisdom of the musings in a manner reminiscent of the scene in the movie Life of Brian when Brian's followers parrot back to Brian his utterance "We are all individuals."

So forget the flowery labels for obvious concepts for now.  Tablets are, indeed, real.  They are a game changing technology form factor.

Technology Business Research where I work has completed three different tablet studies.  One addressed the consumer market, another the general business market, and the third business vertical markets.  In short, TBR's awash in Tablet buying behavior data right now.

There's a lot of uniformity in the findings which ought not surprise people.  Tablets are pretty simple devices.  There's not a lot of moving parts to these things.  People, not surprisingly, want solid screen resolution and responsive touch screen capability given that is the I/O interface in lieu of a keyboard.

And they want long battery life, because they like "instant on" instead of booting up a notebook PC and then going to get a cup of coffee before being able to get at "their stuff" as I do every morning at work. 

Clearly, what "their stuff" is varies widely.  But the desire for instant access does not vary.  It is a key differentiator against Desktops and Notebooks. 

(Yes, we have a new round of devices emerging called Ultrabooks seeking to fill the spot unfilled by netbooks. But, alas, a netbook by any other name is still a boat anchor, albeit a light one.)

Now tablets are coming at business and coming hard.  Consumers like them.  They fit the form factor differential between a smartphone and a notebook quite nicely.  People mocked the first Blackberry as too small a device for computing, and we all know how well that prognostication held up from a decade ago.  

Today people mock the tablet, saying people will not put them up against their ear to use as a phone.  With a blue tooth device they won't have to.  The Gordon Gekkos of the world can walk through an airport with their headset tied to a tablet in their brief case just as easily as they can with it tied to a smartphone.  And they won't have to be lugging around their notebook anymore, either.  

Maybe.

That is where the market will head, but there are two mission critical hold ups stalling adoption in the Business environment.

• Office File Treatment

It is clear users want to be able to perform business productivity functions on tablet devices.  Microsoft Office essentially owns business productivity apps at this point in time, so this is simply a codeword for MSOffice on a tablet form factor.  And nothing out there resonates in the market.  

The three likely alternatives are:

• Windows8 brings Office functionality down to the tablet form factor
• A "killer Android App" bridges MSOffice to Honeycomb
• Apple comes up with a better alternative to Open Office
  
  

• Mobile Device Management
  
  This has more nuances and political implications.  It is the historical pendulum swing of IT control.  The client side has been over-run as smartphones broke open beyond Blackberry and has businesses scrambling to determine how to address the security issues associated with business/consumer devices in a manner that will not irk their employee base and still protect businesses from litigation and loss of key business intelligence information.
  
  The tablet sits here as well.  It will be a multifunctional device for the individual.  Individuals prefer performing consumer tasks on tablets now, and they increasingly want to perform business tasks on tablets.  And crossover functionality between business and consumer tasks will spark explosive growth in unit sales.  IT has to rationalize this, and rationalize it fast.  Employee demand for tablets will only intensify in the next 6 to 18 months as MSOffice treatment gets addressed in the marketplace.

So Apple iPads have been brought into business from their highly mobile professionals and their C-level executive teams and have been evaluated.  Android devices crop up in there as well, and all eyes turn to Redmond wondering what Win8 will do.  Eyes might have turned to webOS over time as well, but HP's recent decision to discontinue the TouchPad tablet and Veer Smartphone put an end to that prospect.

Bottom Line

In 2015, industry wags will look back to a tablet device launched in 2012 or 2013 and point to it as the tablet equivalent of the BlackBerry smartphone device as the pricey, secure product entrant locks up high end business users.  It will have a way to manipulate Office files, and it will have solid MDM features protecting business information.

In turn we will see significant shifts in Desktop and Notebook unit volumes from Tablet cannibalization.  Some big names in the PC industry will start to take on water financially and the fragmented tablet bottom feeders in the $250 price band that also includes "eReaders on steroids" will consolidate like the PC industry of the mid 1980s.



Similarly, some business facing technology entity will be generate a decent services revenue stream handling mobile device management issues, and they could very well be doing it with RIM server-side software picked up in an acquisition of that mobile device pioneer on the fast track to oblivion right now.

For, the more things change, the more they remain the same.  The fact this industry keeps changing over so rapidly is what makes it fascinating to watch and to translate into real world business implications.