Nobody Cares About Your “Platform” Till They Know What Real Problems It Solves

By Philip Lay, Senior Advisor, The Chasm Group LLC Altogether now: Applications come first, platform comes second. Not the other way around! In your marketing, on your website, or in front of customers, “platform” is practically a suicidal term until customers have shown that they care about what your product or service and the architecture behind it can do to help them solve at least one important, preferably urgent, business problem. Once you’ve successfully deployed a solution to that problem, you can talk about how your platform enables them to solve another important problem or use case, and then another, and so on. As your customers see the versatility of your technology and services, it will dawn on them to ask about other problems that you may not yet have contemplated. The more your technology can address multiple use cases, and the more widely adopted they are, the more permission you get to talk about the power and versatility of your platform. What makes your company even more relevant to customers from then on is how your platform enables other companies to develop applications leveraging the benefits of your architecture. And if your platform an generate network effects, even better. Salesforce and Amazon: Two

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Bad News! The VC2C Business Model is at Breaking Point

By Philip Lay, Senior Advisor, The Chasm Group LLC Ever since the advent of cheap and plentiful capital following the global financial crisis, a new business model has gradually muscled its way to the forefront, in many cases supplanting the conventional B2C — business to consumer — model and co-existing alongside the B2B — business to business — business model. This is venture capital to consumer model which has become commonplace, particularly in consumer markets. Virtually every venture firm has one or more intentional or unintentionalVC2C’s in its portfolio. The intentional cases are where investors have consciously invested in a business to get scale before monetization or before profitability. The unintentional ones are where the tech company in question has a business model that is resistant to profitability, possibly terminally so. Over the past two decades there have been plenty of cases, including household names like Youtube and Dropbox. This model has a rather ignoble history. In recent times it was first attempted during the largely disastrous internet boom of 1995–2000. It went quiet during the nuclear winter of 2001–2007 and then reared its head again after the 2009 financial crisis when interest rates plunged to zero, startup activity in consumer internet 2.0 got going, and investors

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Why Enterprise SaaS Deals Don’t Close

By Philip Lay, Senior Advisor, The Chasm Group LLC At this point early in the new year, chances are that you’re either (still) celebrating after closing some of the large enterprise sales deals that you had in your Q4 pipeline, or lamenting one or more deals that slipped into the new fiscal year or – perish the thought – just fell out of your funnel. If this past year-end you fell short of your forecast, there’s almost certainly some explaining to do at your next board meeting, and some commitments to make regarding how to fix whatever shortcomings you identified. If by chance you met or exceeded your forecast, you may now be worried about how to deploy the agreed solution for each customer with minimal problems. In either case, you probably need to figure out how to increase your win rate and generate a larger number of qualified opportunities in future quarters, in order to meet your ongoing growth targets. Whether your company’s sales process consists of six neatly defined steps (in theory) or sixty less predictable steps (in practice) as in the cartoon above, what I’m seeing in the marketplace today is that the vast majority of tech companies of all sizes

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How Much is Too Much?

By Paul Wiefels, Managing Director, Chasm Group LLC During the past 10 years, Marketing technology (“Martech”) applications have become numerous; so numerous that the “Martech 5000” now comprises 7000+ entrants. Dr. Philip Kotler of Northwestern University defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at profit.” Are marketers at risk of focusing so much on the mechanization of the process such that the actual art of the discipline – the craft – is lost along the way? Marketing technology (aka “Martech”) has now become the Frankenstein of technology – a category made up of thousands of parts, both big and small.  Driving demand, Martech applications were created to automate the last sizable business function – marketing – and in so doing, provide a set of more granular metrics that marketers could use to show the ROI associated with their numerous efforts.  Beleaguered CMOs, sometimes regarded by their executive staff peers, notably in B2B companies, as conference organizers, party planners, or the brand police, now could transform both their function and themselves by delivering more direct contributions to revenue.  They could connect spend to return, lead nurturing to lead scoring, determine the true cost of customer acquisition, and so on. 

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Land & Expand Meets Customer Success – Three Key Gaps to Fill

By Philip Lay, Senior Advisor, The Chasm Group LLC Overview Despite considerable fanfare around the concept of customer success, in most tech companies CS is still in its infancy as a strategy and an organizing principle. During five years or so of field research and experience with Saas companies, I’ve identified at least three critical gaps which today inhibit the effectiveness of most companies to align with their customers’ target outcomes and thus maximize their growth. Gap #1 – Strategy: Land & Expand is a business strategy, not a sales tactic. Today most Saas companies are still organized primarily to land new logos, causing customer success to be defined and resourced tactically and reactively rather than strategically and proactively. Equally concerning is the reality that in many companies Customer Success is basically a re-labeling of customer support and/or implementation services. Thus, helping customers to achieve their target outcomes – the implied goal of customer success – is little more than rhetoric. Gap #2 – Role: As a result of this bias toward landing new logos, there are lots of CSMs (commercially incented Customer Success Managers, who are basically farmer salespeople focused on achieving renewals and preventing churn) but very few CSAs (Customer Success Advisors, who focus

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The Seven Habits of Highly Successful Enterprise SaaS Companies

By Philip Lay, Senior Advisor, The Chasm Group LLC Yes, another of those “keys to success” articles. I’m even using the magic number 7, as so many how-to books and articles have done in the past in emulation of Stephen Covey, whose wildly successful Seven Habits books have influenced millions of readers including myself. I hope Covey wouldn’t have minded the implied tribute here, along with so many others over the years. This particular piece has been inspired by the struggles that I witness on a daily basis among management teams and boards of Saas/Cloud companies as they increasingly gravitate toward enterprise organizations. Partly because so many of them were “born in the SMB marketplace”, they are generally not resourced or organized to serve the demands of enterprise organizations effectively. It doesn’t help that their investors draw many of their measurement criteria from the world of consumer marketing. But some leading Saas companies such as Salesforce, ServiceNow, Splunk, Mulesoft, and Docusign, have implemented some of the principles and practices outlined below, even if not always as consistently or thoroughly as their customers would like. Now that enterprise customers are at long last adopting the cloud for mission-critical applications in much greater numbers, Saas companies

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AI and Industrial Automation: Don’t Count the Incumbents Out!

Earlier this month an article in the Financial Times by John Thornhill, the paper’s innovation editor, caught my attention. Thornhill was relaying an intriguing set of ideas expressed by the authors of a new book, What To Do When Machines Do Everything? Before discussing the future impact of today’s unfolding industrial innovations such as driverless cars, robotic surgery, precision agriculture, or automated beer service (as in the photo above), the three authors – Malcolm Frank, Paul Roehrig, and Ben Pring – make their first key point, citing the example of an early 19th century innovation that enabled an entire industry that generates $620bn. in annual revenues today. What could this invention have been – The steam engine? The airplane? The sewing machine? Or maybe the telephone? Theoretically, you might expect not be too far off with any one of these answers, but in fact the invention in question was … the lawnmower. How could the lawnmower possibly have been so significant, you may well ask? Well, as Messrs. Frank, Roehrig and Pring (to whom I’ll refer as FR&P from now on) inform us, lawnmowers enabled the uniform cutting of grass to create lawns and, perhaps more significantly, playing fields. Over time,

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Land & Expand Strategy: Time to Get Serious about Customer Success!

For the past few years I’ve been researching the marketplace and advising clients how to organize their resources effectively to ensure client success and thus succeed in expanding adoption and engagement after first landing a new customer. Progress has been made by some, but in general companies still fall far short of what most enterprise customers consider to be minimum expectations, and thus far short in terms of the expand benefit that could accrue to vendors. Why should this be? You can check out my prescription for solving this problem toward the end of this post, but first here is my diagnosis of the four main obstacles that I still see everywhere I look: Management teams are still infatuated with winning new logos vs knocking themselves out to make their existing customers successful. Exercising, in other words, a much greater focus on land than expand, resulting in frustrated customers and limited or even negative expand outcomes – i.e., not only much lower upsell effectiveness but more frequent customer attrition. For most vendors “customer success” is still largely about taking care of the vendor’s own financial outcomes, rather as the first couple of decades of Customer Relationship Management (CRM) were about making life more efficient and

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Pivot or Divot? The Decisive Difference between Strategic Pivots and Frustrating Flails

The concept of a strategic pivot was first popularized five years or so ago in Eric Ries’s book The Lean Startup and subsequently by Steve Blank and other entrepreneurs and academics. Since then, it’s become another abused term for entrepreneurs, management teams, and VCs to use when announcing a dramatic change of strategy in their business or portfolio company. Instead of executing legitimate pivots based on solid ground, many companies get sucked into a pattern of flailing wildly – making deep divots in the fairway rather than hitting a successful shot, to borrow the golf analogy.(*) Getting this distinction right matters: it can be the difference between success and failure – whether a young startup digs a hole in the fairway or a more mature company whiffs at the ball when they try to increase customer adoption and revenues. I’ll review examples of successes and failures and provide rules of thumb to help you tell the difference.   It shouldn’t be too controversial to assert that “pivot” has become a wildly over-used term when it comes to describing a strategic shift that contrasts sharply with a prior strategy, when teams conclude that what they’re doing today just isn’t working. More

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Thinking Wrong: How Common Errors in Thinking Processes Lead to Poor Judgments and Poor Decisions

By Paul Wiefels Part Two It’s summer time and I am devoting some of my “beach reading” to topics that personally intrigue me but are a bit off the beaten path from subjects I typically write about.  My previous post concerned how flawed thinking processes among healthcare providers can be extremely costly, not to mention, deadly.  Similarly, flawed thinking juries can wrongly convict the innocent, or let the bad guy off the hook.  Flawed thinking at work, in governments, and in our personal lives can be expensive, career-limiting, or simply embarrassing.  We put a huge premium on “getting it right” yet we fall prey to a number of biases and cognitive errors that prevent us from doing just that.  More troubling, cognitive psychologists tell us that we don’t just get it wrong occasionally.  We get it wrong routinely, tripping again and again over obstacles to decision-making that are systematic—deviations from rational thought, observation, and analysis that lead us into cognitive cul-de-sacs. Sadly, there is no magic pill, chant, or nostrum that we can summon to combat our tendencies here.  But we can learn to spot some of the most obvious, as well as be aware of some of the more obscure

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