Market Hacking the XaaS Economy
Asymmetric Marketing: The winner-take-all marketing wisdom developed by the software superpowers over decades of market experience. A system of marketing that concentrates on co-evolutionary symbiosis with incumbent market leaders (e.g. Google's original search deal with Yahoo) and open source communities as a starting point for platformula development. In the broadest sense, a-marketing is the application of asymmetric warfare thinking to software business strategy across the full spectrum of the marketing challenge, including market development framework, products, partner-advantaged sales approaches, customer management, operating culture and brand communications.
Bark-itecture: One of four aspects of asymmetric product shark-itecture, or product management model. It refers to that aspect of an asymmetric offering that allows your products to become white-labeled or 'powered-by'-able for inclusion in superpower and other incumbent leader offerings. The external 'bark' of the product experience may be another company's branding, UI, etc., but the trunk of the tree (core product dNA) is yours. This approach to product strategy helps cloud innovators leverage the market power of incumbent leaders in perfecting their platformula.
Big Hat, No Cattle Syndrome: Grandiose marketing strategy (based on chasing the marketing fad-du-jour) coupled with anemic execution. A gap between strategy and execution that creates dysfunction in the operating culture of a company. Symptoms of Big Hat, No Cattle Syndrome include inability to identify a qualified sales prospect, leads falling through the pipeline cracks, or a misapplication of marketing automation software that alienates the sales team and has them chasing market mirages, i.e. unqualified prospects. Big Hat, No Cattle Syndrome starts at the C-level of an organization and can be fixed with an inverse selling model. See below.
Bubbleboy: A cargo cult marketer from the bubble period of history. A satirical term shoplifted from the Seinfeld episode titled 'The Bubble Boy', loosely modeled on the experience of an individual raised in a germ-free, plastic bubble and protected from life's dangerous realities. Refers to marketers protected by and dependent on a cocoon of VC-invested cash, and whose businesses never become self-sustaining due to their rejection of the best practices of the software superpowers and inability to design and activate their own platformula.
Cargo Cult Marketers: Marketers that are guided by abstract market development models from the laissez-faire or pre-superpower period of tech market development. Marketers that romanticize disruptive technology innovation (e.g. Geoffrey Moore's 'Chasm' theory) without acknowledging the role of software superpowers and natural monopolies in either advantaging or obstructing the emergence of innovators. Cargo cult marketing came to the fore in the bubble period of tech history during which 5000 'disruptive innovators' are estimated to have gone extinct, despite raising mountains of cash, and running billions of dollars worth of advertising. See 'cargo cult science' below.
Cargo Cult Science: An expression coined by Nobel physicist Richard Feynman to describe those persons following the appearance of science, but not its substance. This term originates from Feynman's description of a tribe of tropical islanders who engaged in various imitative rituals designed to make cargo planes land on their remote island. The rituals were unsuccessful and the planes never landed. Imitative ritual is widespread within the 21st century high tech marketing profession, as a scientific fact-based approach to market has often been discarded, despite the industries pre-occupation with 'marketing metrics'.
Category Regime Change: The rapid replacement of a category market share leader in an adjacent category by an asymmetric marketer possessing category-extensible market power. Example: Microsoft's defeat of WordPerfect and Lotus in desktop apps; Microsoft's defeat of Novell in network servers; Microsoft's defeat of Netscape during the web browser wars. Google's defeat of Yahoo in search, Facebook's unseating of MySpace in social networks, Apple's defeat of Blackberry in enterprise mobility, and Amazon's disruption of the web application hosting industry are additional examples. Category regime change is an ongoing process in the tech industry and can also be accomplished via "barbarian" M&A activity, e.g. Oracle's rollup of PeopleSoft, Siebel, Sun and dozens of other competitors to create a one-stop shop in enterprise software and infrastructure.
Cellularity: Underlying business biology of network-effects-based social web businesses. Cellularity sees customer churn as the normal state of affairs in web businesses. Cells live, cells die, new cells are created. Think of this as marketing apoptosis (i.e. the body's natural programmed cell death).
Channel Colonization: The symbiotic relationship between a superpower and their market-loyal solutions partners. The state of the channel in the age of the software superpowers, resulting in channel partner focus on superpower marketing agendas, and the abandoning of non-aligned vendors. Superpower channel colonization provides asymmetric marketers with an opportunity to concentrate their own channel activities around symbiotic attachment to these colonized channels by offering a complementary revenue opportunity to that provided by the superpower.
Cloud Gauntlet: Cloud is the most contested market in the history of the tech industry. Incumbent superpowers (e.g. Oracle, IBM) are focused on retaining and defending their enterprise customer base and have engaged in massive FUD (fear-uncertainty-doubt) relative to public and private cloud computing innovation from Amazon, Rackspace (OpenStack) and others. Cloud innovators are thus forced to "run the cloud gauntlet", i.e. make important choices in how they partner with various cloud leaders in this highly contested market space.
Co-optation: Creatively leveraging the market power of another through the practice of market symbiosis, with the goal of furthering one's own marketing agenda and advantaging one's own platformula.
Culture Management System (CMS): Internal social software designed to foster a sober, candid, self-organizing, asymmetric marketing organization. A mechanism to enable Marketing by Garage Values (see below). An asymmetric marketing tribal 'OS'. Incorporates social enterprise intranet, team weblogs, conferencing, groupware, and employee incentive management (EIM) capability.
Customer Barrier Management (CBM): The market-craft of protecting one's customer base, and defeating parasitic competitors. The customer management strategy of asymmetric marketers. The conscious attempt by asymmetric marketers to make the law of path-dependent "increasing returns" (see below) operate in their favor, by implementing the best practices of the software superpowers.
Crowd Catalysis: This is the process by which self-organizing markets and communities emerge on the web and mobile networks. It is a 4 stage process involving n-gine development, n-formation emergence, n-stitution building and n-duplicatable advantage creation. It is why superpowers tend to dominate markets in a winner-take-all fashion, i.e. Google's search market share, Microsoft's PC market share, Facebook's social market share, eBay's commerce marketplace dominance, etc. A well-crafted crowd catalysis strategy transforms mobs into markets, and markets into managed customer communities. See N-glish below.
D+S (device + service) Model: This is the new superpower pattern of vertically integrated hardware/software/services integration practiced by IBM, Oracle, HP, Apple, Google, Microsoft, Intel and others. It involves the deep integration of the end-to-end product experience. This pattern will define superpower rivalry going forward.
Dark-itecture: One of four aspects of asymmetric product shark-itecture. The conscious incorporation of stealth into your product strategy. Dark-itecture is what you hold back in in order to provide your company with asymmetric advantage in follow-on markets, or a way to defend against parasitic competitive encroachment or imitation seeking to commoditize your offerings.
Desertification: The over-cultivation of enterprise IT market landscapes against the background of global economic uncertainty. Desertification results from both the IT 'do more with less' agenda, and the no-fly-zone market behaviors of the superpowers. Desertification is manifested in terms of the percentage of enterprise IT spend reserved for maintenance of current applications and infrastructure. Leading analyst firms estimate that 75% or more of IT spend is maintenance. This lock-up of maintenance 'earmarks' desertifies the innovator opportunity, demanding a creative response to platformula design and execution.
Digital Political Correctness: A form of intellectual elitism that attempts to invalidate the lessons of the rise of the software superpowers by focusing on 'the new new thing'.
Disruptive Technology Innovation: Technology that obsoletes a prevailing paradigm. The primary market religion of Silicon Valley VCs and investment bankers.
Dotcomplexity Advantage: The embedding of one or more social effects into the fabric of an asymmetric offering. Can take multiple forms in the cloud age, e.g. self-organizing social commerce effect (eBay marketplace and platform), continuous improvement effect (ability to see how discrete customers use your SaaS application--then optimize offering for all customers), social network effect (Facebook member invitations), bandwagon effect (Apple app store ISV growth) and more. Complexity science applied to real-time, web, social and mobile markets.
Ecoregion: A subset of an ecozone. (see below) Superpower market geography defined by a product-centric customer franchise, e.g. the Oracle database ecoregion, the Adobe Acrobat ecoregion, the eBay PayPal ecoregion. Often presents as a product/partner/customer cluster, e.g. the Microsoft .NET developer ecoregion. Ecoregions are targets of Asymmetric Opportunity (TAO) for marketers seeking to practice superpower symbiosis.
Ecosystem: An integrated product/customer/partner/stakeholder system organized around a given vendor or open source community platformula. E.G. the Microsoft ecosystem, the Google ecosystem, the Red Hat ecosystem, etc. Ecosystems are not market abstraction-layer exercises, but are self-organizing systems that emerge around dominant vendors.
Ecozone: Subset of an ecosystem. A well-demarcated opportunity landscape defined by the market footprint of the software superpower or open source community that defines it. An installed base of customers. A Target of Asymmetric Opportunity (TAO) for marketers seeking to practice superpower symbiosis.
Graphically Correct: Intentionally sarcastic expression used to describe abstract, symmetrical market development models that provide no path forward for asymmetric marketers. Wall Street builds bubbles around these models.
ISV (Independent Software Vendor): Includes companies leveraging one or more software deployment models including conventional on-premises, web on-demand (also called SaaS-software as a service), appliance model, embedded firmware, IaaS (infrastructure as a service), PaaS (platform as a service), mobile app (on-device or in-cloud), etc.
Inverse Selling: A selling model based on trialware or the freemium concept. Use/sell vs. sell/use. The prospect invests human bandwidth to use the product, and conventional 'selling' is only done on the basis of a successful trial evaluation. Helps eliminate Big Hat, No Cattle Syndrome by providing tangible evidence of 'qualified' lead in the sales pipeline.
Law of Increasing Returns: Developed by Brian Arthur. That which is ahead gets further ahead. Complexity science applied to economics. The basic law governing software economics in the age of the natural monopoly superpowers.
Market Power: Ability to influence the behavior of a market to conform to your marketing agenda, up to and including the ability to progressively displace incumbent market share leaders. The end result of practicing asymmetric marketing across the full spectrum of marketing activities, including products, selling approaches, and customer management. The end result of platformula development and execution is sustainable market power.
Market Share: Percentage of a defined market category using your product. In and of itself, not necessarily a reflection of asymmetric market power. Historically within the tech industry, asymmetric marketers and future superpowers rise to the top by overcoming market share leaders.
Marketing by Garage Values (MBGV): The kernel values of a culture of asymmetric marketing. Operational sobriety, internal candor, team self-organizing across departmental silos, shared ownership of the revenue objective by the whole company. 'Garage' refers to the legacy of pre-bubble high technology bootstrapped entrepreneurism, and is no way put forward to infringe on the well-deserved brand equity and market reputation associated with Guy Kawasaki's Garage Technology Ventures or Garage.com.
Marketing Defense-in-Depth: A layered customer barrier management (CBM) approach incorporating barriers to customer exit, barriers to competitive entry, and barriers to product imitation. The result of a well-designed platformula is unified market threat management. See Customer Barrier Management (CBM)
Messaging Mashup: Composite 24/7 market conversation in the age of the software superpowers that provides a working framework to develop ISV brand messaging strategy. E.G. the ongoing market conversation on whether mobile smartphones are 'secure', or whether public vs. private cloud is the best option for enterprise developers.
Narc-itecture: One of four aspects of asymmetric product shark-itecture. Means systematically designing in continuous feedback, user profiling and actionable business intelligence. "Narcing" the user, i.e. capturing metrics but not invading his/her privacy.
Natural Monopoly: Software or cloud vendor possessing a customer-sanctioned market lock-in. Distinguished from government-sanctioned monopoly, e.g. original AT&T. The natural state of software markets in the 21st century software industry tips in the direction of increasing returns and customer-sanctioned monopoly.
N-glish: A language used to describe the stages of platformula development. E.G. N-formation (a many-to-many or social market that organizes around an "N-gine" or platform), N-stitution (a stable vendor-organized market community), N-duplicatability (a high level of customer barrier management designed into a platformula). In order for a competitor to overcome or commoditize an N-duplicatable business it is necessary to equal or surpass the associated 'N' or social network effect). E.G. why the Apple appstore competitive advantage is difficult for Android, Windows Phone or Blackberry to overcome.
No-fly-zone Imperative: The natural marketing behaviors of the software superpowers designed to pre-empt parasitic competitive encroachment on their market territory. Includes strategic control of installed base ecozones, containment of emerging market threats, colonization of partner networks, creation of new markets, and collusion and contention with each other. Based on the military metaphor, 'no fly zone'. The no-fly-zone imperative of the superpowers is the primary marketing 'GPS' (geo-positioning system) used by asymmetric marketers to detect Targets of Asymmetric Opportunity. See Cloud Gauntlet above.
Path Dependence: The initial market 'groove-in' that determines what product and which ISV will benefit from the law of increasing returns. Example: Microsoft's groove-in as the IBM PC operating system vendor defined the natural 'path' along which PC clone markets (Windows platform), adjacent markets (desktop Office Suite), and derivative markets (web browsers) developed.
Platformula: The creative fusion of technology platform and partner marketing success formula driving the emergence and growth of leading superpower ecosystems.
Powered-by Deal Model: The SaaS (or on-demand) equivalent of an OEM agreement. It enables the 'powered by' provider to capitalize on the momentum of its affiliate or white label partner. Google's role in providing 'powered by' search to Yahoo enabled them to later leapfrog Yahoo in the market.
Quark-itecture: One of four aspects of asymmetric product shark-itecture. The smallest aspect of your overall offering designed to be adopted by the greatest number of users in the shortest amount of time to begin driving and/or expanding a customer groove-in. E.G. Adobe Acrobat Reader, Skype client, free trial subscriptions to on-demand applications (Webex, Salesforce.com). Quark-itecture is the key to the freemium sales model, enabling some kind of trial use with a seamless upsell based on a positive user experience.
Reverse Tornado: The 'death spiral' effect that regularly occurs when a market share leader deficient in market power faces category regime change from one or more software superpowers. AOL's decline is an example of a reverse tornado in action. The unravelling of MySpace is another example.
Sandstorm (aka superpower sandstorm): A metaphor to describe the marketing challenge facing enterprise ISVs in the age of the software superpowers. Characterized by reduced market and revenue visibility, positional confusion within eroding categories, board/investor heat and/or intervention into day-to-day management affairs, and broken marketing machinery. Think of platformula creation as the building of a market oasis in the sandstorm.
Shark-itecture: Product roadmap implemented by asymmetric marketers to maximize customer adoption and use, while pre-empting competitive encroachment. The product strategy of the software superpowers developed over the life of their offerings that allows them to 'eat' their competitors and carry out category regime change. Sharkitecture is how the superpowers anchor and defend their ecoregions, migrate their installed base of customers to their new products, and achieve multi-generational, cross-category product dominance. Comprised of 4 components, quark-itecture, bark-itecture, narc-itecture, dark-itecture. See all.
Software Superpowers: Natural monopoly, asymmetric marketers with cross-category and category-extensible market power. The superpowers seek to lock-in their installed base customers, i.e. their ecozones and ecoregions, dramatically outpace VCs in software R&D investment, and dominate the 21st century software market landscape. Microsoft, Oracle, IBM, Cisco, Apple, Facebook, Google, etc. Platformula strategy is based on reverse-engineering the strategic marketing dNA and best practices of the software superpowers.
Sound Bite Sandstorm: Polarizing, values-driven media coverage of software superpower issues. E.G. Press frenzy around Google's business dealings with Chinese government, Microsoft vs. U.S.DOJ legal proceedings, Facebook privacy criticism, Twitter ad push, Apple appstore developer rules, etc. The soundbite sandstorm represents an opportunity for asymmetric marketers to 'crash' these market conversations to advance their own brand agenda.
Superpower Symbiosis: The basic foundation of asymmetric marketing strategy, grounded in the natural sciences. Living together with the software superpowers. Can take multiple forms including mutualism (win/win), parasitism (win/lose), commensalism (win/neutral). Superpower symbiosis provides the conceptual framework for the development of marketing strategy, products, sales approaches, messaging, and more. Examples include the young Microsoft's OEM deal with IBM for PC DOS, Google's 'powered by' search deal with Yahoo, Apple's attachment to AT&T for the exclusive launch of the iPhone, and more.
Supertail Model: Unlike the distribution-centric 'long tail' model with its 'big head' of popular products and long tail of niche products, the supertail model is a value creation model powered by the software superpowers and designed to achieve economic success for their end-to-end platformulas. For example, for every dollar of revenue going to Microsoft, Microsoft partners (the supertail) realize an 8-fold multiple of that. The supertail model is also evident in Apple's compensation approach for appstore ISVs, in which paid app developers receive 70% of the revenue, and ad-sponsored app developers receive 60% of the revenue. If you've seen the film, Godfather 2, you've heard the supertail model described as follows: "Hyman Roth always made money for his partners." The supertail model is an important ingredient in platformula design and execution.
TAO (targets of asymmetric opportunity): The ecozones and ecoregions of the superpowers to which asymmetric marketers symbiotically attach their offerings. An approach to marketing strategy that shifts focus from 'end customer' markets to the locked-in ecoregions of the superpowers in order to capitalize on the momentum and friction inherent in superpower (or incumbent leader) installed base dynamics. Microsoft's early target of asymmetric opportunity was IBM. Google's early target of asymmetric opportunity was Yahoo. Apple's exclusivity deal via attachment to the AT&T installed base for the launch of the iPhone is another example of TAO thinking in action.
Tribal Chieftanship: The leadership style of asymmetric marketers. Hands on, lead from the front, thought leadership-driven, individual value contributor/doer. Personal reputation equity-rich model which results in the 'street-cred' needed for rapid response to competitive threats and market opportunity. Think Steve Jobs. Think Bill Gates. Think Larry Ellison. Think Mark Zuckerberg. Think Andrew S. Grove.
2-Dimensional value proposition: An ISV value proposition that benefits the end customer and the ISV. A characteristic of many dead bubble companies that abandoned pre-existing value chains in favor of go-it-alone disruptive technology innovation, e.g. WebVan, Napster, GovWorks.
3-Dimensional value proposition: A multi-dimensional value proposition that benefits the end customer, the ISV, and the 'host' superpower or open source community with which the ISV is practicing symbiosis. The value proposition of "Microsoft-the-startup" is a good example of a 3-D value prop. PC users received benefits, IBM received benefits, and Microsoft received benefits. The Apple iPhone platformula follows this model, yielding benefit to Apple/AT&T, app developers, and users. Rugged platformulas are based on a multi-dimensional value proposition and full spectrum enrichment of all key stakeholders in the value creation chain.