THE INFOBLOG
Company news, plus our musings on Enterprise 2.0, organizational culture, knowledge workers, and information management.
You get what (someone else) paid for
Dean’s post about the impending failure of Enterprise 2.0 got me thinking a lot about the strange nature of selling enterprise software, and of selling things in general.
Okay, so imagine you walk down to the local store and buy a lollipop, which you then proceed to happily lick all the way home. In this instance, you’re the purchaser and the consumer. You have a direct relationship with the company that makes the candy. You buy it, so you are funding their existence, and you eat it, so you are also the direct judge of the effectiveness or quality of their product.
This direct relationship is exactly what happens when people buy products for themselves. Per sale, the company has one customer, and that leads to the product being developed and grown with a linear relationship — feedback from customers is meaningful, and important. It’s this model which led to “The customer is always right” — after all, you’re not going to argue with your customers. If your latest Snozzberry flavored candy isn’t selling well, it’s safe to assume it’s because consumers are not fond of it. Hits and misses become immediately apparent. An increase in purchases can be attributed directly to an increase in satisfaction.
Me and My Shadow - Combined Purchaser and Customer
Sadly, the world isn’t often this simple. There are many situations when the consumer and the purchaser are different people. Let’s consider the scenario where your twelve-year-old daughter is trying to convince you that she really needs those designer sneakers.
In this instance, the consumer and the purchaser are different. You won’t be wearing the sneakers, so your criteria for purchase is likely to be much different from your daughter’s. As the purchaser, you’ll be looking at price, and value for money. You might be looking for things like good quality stitching, materials or the country of origin. Your daughter, on the other hand, doesn’t care about any of those things. She only cares that they are awesome and that her friends will be soooo jealous.
The sneaker company has a dilemma – to optimize the product for purchase by parents, or for its appeal to teenagers? An increase in sales may not actually indicate satisfied customers (as any kid who was forced to wear sensible school shoes can attest). Per sale, the sneaker company has two customers to keep happy here. And the criteria for success are different.
Split Personality - What if the purchaser isn't the consumer?
If push comes to shove, and the shoe company has to decide between a feature that delights a teenager or a requirement that satisfies her parents, we know which ones will appear in the final product. He who pays the piper calls the tune.
The other shoe drops
If the central tenet of Web 2.0 is, in Tim O’Reilly’s words, that “users add value,” a Web 2.0 company wants as many users as they can possibly attract. To build the largest audience for their Web 2.0 tools, these hot new companies developed a razor-sharp focus on the user experience. Every other imperative — including profitability — was secondary.
The wave of innovation that followed was all about design. Simple, attractive, usable and useful sites sprang up everywhere. Emergent, free-form sites that generated communities and empowered individual users.
All of this was possible because the customer was the user. Individuals could vote with their feet — or their wallet — for the solutions that worked for them.
When Web 2.0 software gets translated to the corporate environment, where the customer is not the user, you have to be extremely careful that the features that get cut aren’t the ones that employees were clamoring for in the first place. Did you sacrifice an intuitive user interface because it didn’t match the look and feel of your company’s intranet? Did you substitute free-flowing, spontaneous conversation for a lengthy edit-and-approve cycle? Whoops. You just forced your 2.0 employees back into a 1.0 solution.
It’s no wonder that most users in the enterprise are wearing uncomfortable, tight-fitting sensible shoes.
In the Interest of Disclosure
As a company, we haven’t been shy about sharing our opinions on topics of interest, linking to interesting blogs online, or recommending books to read or software development tools to use.
But we have been hesitant to make money from our website or from blogging in any other way than by selling our software product, also called Infovark.
Many other start-ups sell books or seminars or advertise related products on their websites — it’s a matter of survival in this tough economy — but we’ve always felt that it would somehow dilute our message and our company focus.
We’re also a bit worried that our reviews and recommendations would seem less honest if we joined any partner or affiliate programs. I think it’s a healthy trend that more and more bloggers are disclosing these relationships, and that readers are becoming more comfortable with them.
So, in an effort to help subsidize our coding (and reading) habits, we’ve signed up for the Amazon affiliate program, and we’ll be linking our book reviews through Amazon from now on. If you buy a book from via one of these links or from the Infovark bookstore, you’ll send a nice bonus our way. We’d sure appreciate it.
And we’ve had a CafePress account for some time. We use it to make some of the swag we take to conferences. Buying a button, sticker or T-shirt from our Infovark shop will also help us continue our Infovark experiment, by giving us some free advertising and a small percentage of the item’s price.
I’ll add both these disclaimers to our about page, and I’ll also describe our participation in the Microsoft Partner Program.
And now, back to our irregularly scheduled varkiness.
State of the Internet
Here’s a list of Internet and social media statistics from late 2009 and early 2010 in animated infographic form. Found via Information Aesthetics and Flowing Data.
JESS3 / The State of The Internet from Jesse Thomas on Vimeo.
Gee, this crazy World Wide Web thing might be catching on…
Why Enterprise 2.0 Will Fail
Scott Gavin recently listed the Top 3 Business Benefits of Enterprise 2.0 inside the company firewall.
- Personal Information/Knowledge Management
- Expertise Identification
- Collective Intelligence
I was glad to see someone discuss the internal benefits, because the E2.0 conversation lately has focused on the external benefits — how E2.0 can help marketing and sales.
The case for organizations reaching out to their audiences via social media is easy to make. If you want to improve your outreach efforts, you either have to go where the people are or create an inviting place for people to gather.
The case for E2.0 inside the firewall is considerably more difficult. As Tom Davenport points out, is essentially the case for what used to be called Knowledge Management, or KM. The term KM fell out of favor with consultants and analysts because it didn’t deliver enough of these benefits. There are a lot of folks hoping that flexible, easy-to-use “2.0″ applications might succeed where centrally managed KM failed.
But it likely won’t, because most E2.0 vendors are doing it wrong.
If the #1 benefit is personal knowledge management, why are all the big players selling to the CEO, CIO, and IT departments? Where are the tools targeting individual knowledge workers?
Missing in action
I can think of two reasons why we haven’t seen a flowering of office productivity applications.
1. The Free Brigade — Companies don’t think they can make money from ordinary people anymore. Even if software companies came up with killer applications that helped people manage their daily tasks, email and files, they don’t think they would be able to get people to pay for it. Perhaps their software will get pirated. Maybe some college students will throw together a free and/or open source version that will destroy their market. Or — the most common reason I’ve heard — is simply that employees don’t expect to pay for software they use at work.
2. The Microsoft Effect — Microsoft owns the corporate desktop computing environment. Period. Software vendors fear to challenge the hegemony of the Office Suite, afraid that they will suffer the fate of Word Perfect or Netscape or any number of other products and vendors that have tried, and failed, to break Microsoft’s lock on desktop computing. Despite the fact that Microsoft Office applications have been around for more than 15 years (an eon in software industry) and despite the fact that they have known deficiencies for managing information that the Content Management and Knowledge Management industries have exploited for years, there has been little or no direct competition in this space.
The Enterprise 2.0 distortion field
These two factors cause all Enterprise 2.0 vendors to compromise in one of two ways.
- While promising personal benefits to knowledge workers, they actually take their marching orders from senior management, who purchase the software.
- While promising to help individuals with their daily flow of information, they live in fear of deploying software to workstations and laptops, where all information is received and all the work is actually performed.
This means that most Enterprise 2.0 Software vendors violate at least two of Andrew McAfee’s criteria for an Enterprise 2.0 tool: Freeform, frictionless, and emergent.
Because many of these tools have a management bias, and will subordinate individual initiative to central control, they sacrifice being freeform and emergent. Because many of these tools will be based in the cloud to avoid the tyranny of the Microsoft desktop and corporate IT, they sacrifice the frictionless flow of information inside the firewall.
Ironically, the companies that actually deliver best on the E2.0 promise are ones that would never consider themselves enterprise software.
