Archive for July, 2008
The Challenge of Idea 2
I heard an interesting story the other day about automotive companies. Apparently after the Model T went into production, Ford concentrated on selling cars to people who didn’t have cars. Now, as far as marketing strategies go, this seems like a really good one. After all, most people didn’t have cars. The production model meant that this kind of new-fangled transport was now available to all. And, despite some initial adoption barriers, it worked. Ford sold lots of cars. The problem came about when General Motors arrived, a bit later on.
Turns out GM couldn’t sell cars to people who didn’t have cars, because everyone already had one. So, they decided to sell the car as a ‘status symbol’ — to entrench the car as a reflection of its owner. Obviously, this too was a brilliant marketing strategy. It was at this point that GM began to surpass Ford as the number one car manufacturer. Ford, meanwhile, was still trying to figure out what to do with its profits — and still hunting for customers among people who didn’t have cars. “Look! No Horse!”
History repeats itself. Microsoft completely missed the Internet thing. They were firmly focused on the extremely profitable business they invented: selling consumer software. When they did finally engage with the Internet, they saw it as though it was consumer software. Even today, Microsoft are still talking about “Software + Services” — as though the Internet is some kind of Add-On pack to their consumer offerings. In a sense, they still seem to say, “Look! No more IBM mainframe!”
Companies seem to think that the way to beat the Idea 1 legacy thinking problem is to get crazy obsessed with finding Idea 2. Microsoft are trying to be, among other things, an advertising company. Google has gone from Internet search engine to enterprise software/hardware vendor, mobile phones and even virtual worlds. Both companies acquire startups regularly. I can’t help but be skeptical of these efforts. I think that there’s no doubt that they are possible avenues for success, but looming large over all of these is the legacy of Idea 1.
Success seems to be a fertile breeding ground for legacy thinking. In a way, it’s like we’re all striving to find a point where we don’t have to think any more. Or perhaps it’s just that every new idea has to be seen through the lens of the idea that proceeded it. People are innately more inclined to protect against loss than to seek out ways to gain. The advantage of Idea 1 is that it carried no risk of jeopardizing existing profits, unlike Idea 2 and all subsequent ideas.
Anyway, it’s an interesting paradox, but me musing on it isn’t getting this startup any closer to its Idea 1 release. Back to Vark!
Two Kinds of Enterprise Software
Gordon’s public confession last week stuck a chord with me.
I think the term “enterprise software” is being misused. Two very different kinds of software are being conflated.
The first kind of enterprise software is sold to an organization for the purpose of managing or maintaining the organization itself. This is your classic enterprise software: CRM, ERP, EDRM, ECM, etc. (The acronyms are a dead giveaway.) While this kind of software helps to power the enterprise, it’s not actually used by the whole organization. Instead, its users form the internal departments that keep the organization running, like accounting, finance, human resources, and operations. It’s part of corporate infrastructure.
The second kind of enterprise software is general business tools. I’d put spreadsheets, word processors, and presentation software in this category. These tools serve the needs of ordinary business users. They can be considered enterprise software only in the sense that everyone in an enterprise uses them.
All Giants Start Small
It’s a tribute to Microsoft that they so thoroughly dominate this second category with Microsoft Office that we’ve forgotten that these business applications were once sold directly to consumers as stand-alone products. It was only after Excel, PowerPoint, Access and others achieved near ubiquity that they were bundled together and sold to CIOs and IT departments under enterprise licenses.
Before the office suite existed, before employees began to assume that their employers would provide these common tools as a matter of course, Microsoft had to convince individual desk jockeys of the merits of each application. They had to drive adoption by delighting individual consumers. They had to win hearts and minds one business professional at a time.
Does that sound familiar? Enterprise 2.0 is about introducing a new set of general-purpose business applications to knowledge workers everywhere. To realize the benefits of these new collaborative tools, you have to get everyone — not just a few folks in internal departments — to use them. And that requires training and cultural change. It’s a big investment in something that’s not been proven yet.
Eggs in a Basket
Even if your organization is willing to try these new tools, which ones should it pick? There are a lot of vendors out there. The costs of choosing the wrong one are high: You have to implement another system, train everyone again, and still make that cultural adjustment. Only now your coworkers are justifiably cynical about the project. The toughest challenge is overcoming the last project’s failure.
Lowering the cost of failure is the best way to encourage innovation. Companies need a way to test new tools cheaply and easily.
Many of these E2.0 applications require a a fair bit of infrastructure, planning, and governance to operate. Some organizations will feel comfortable trying a hosted service, which lowers the costs associated with trying something new. Others may be concerned about letting their information go outside the firewall. And many hosted solutions don’t provide tools or services that would allow an organization to switch providers at will. So with either approach, lock-in can be a problem. Companies have gotten burned in the past.
All this means that knowledge workers that want E2.0 tools have to fight a series of internal battles over priorities, budget, and culture before they can begin experimenting. Or they have to find a way to work around the problem.
Let a Million Flowers Bloom
Right now, there are computers hidden under people’s desks in organizations all over the world running wikis, blogs, chat servers, and all sorts of interesting E2.0 applications. This is where the real experimentation will happen. There are risk-takers in even in the stodgiest organizations. These individuals are willing to try new things, as long as the personal investment isn’t too steep.
So to get E2.0 into the enterprise, you need applications that can be installed on any laptop or workstation. They can’t rely on a system administrator or an IT services group. They won’t run in a server room, isolated from competing applications. They have to give immediate benefits to the knowledge worker that’s taking the leap of faith. The application has to fall within an individual’s budget, both in terms of time and money. The application has to interoperate with the other tools used by business professionals. And it should be as easy to get the data out as to put the data in.
If it works for that one early adopter, the application will spread to others in the organization. It will compete with other solutions for time and attention, just like in the old days when there were dozens of different word processing solutions. Maybe one will eventually win out. Or maybe you’ll find a handful of competitors, each strong in its own way.
But we’re not there yet; we’re still in the experimenting phase. And when you’re experimenting, it’s best to start small: One computer, one user. Then a small team. Next a large team, then a department. That’s what we mean by emergence.
After a time, you’ll see those successful applications incorporated into office suites and absorbed into corporate culture. Corporate IT will buy enterprise licenses for them. People will begin taking them for granted. And then we’ll start talking about the next big thing.
