EDA & Semi: Time for Marketing 2.0!

The internet used to thought of as "cyberspace".  Being online simply meant being an anonymous consumer of information.  But that was then!  The internet of today is identity-centric and social.  Internet users create blogs, upload their information to social networking sites, share ideas and contents, and they do it from their computers, iPhones, cellphones, etc.  This is what I refer to as "worldwide web" moving to "social web".

There is a generational element to this as well: Web 2.0 (i.e. social web) is still hard to fathom for some baby boomers, but at the same time, there are larger and larger groups of baby boomers starting to post photos, opinions, etc. on the Facebook, for example.  They're beginning to see how social the internet can be.

People in (or using) Web 2.0 have already internalized what doesn't yet seem as a business practice by others.  Unfortunately maturing industries like EDA and semiconductor look at Web 2.0 as "social", and hence constantly raise the question "why do we want to socialize with our customers" or "why would our customers socialize amongst themselves?" -- They take the word "social" quite literally.

It's not necessarily common business wisdom to bring customer experience into aggregators (such as Digg, Yelp, Ning, Xuropa, even Facebook, etc.).  With these aggregators, even though things happen far away from a company's destination site, it's the engine of social discovery that generates astronomically more awareness than the destination site would ever create, and yes, it also generates huge volumes of traffic to the company's destination site.

A simple example: Netflix opened up their database through an API last October.  Through this API other companies (e.g. aggregators) can access titles, ratings, queues, etc. information from Netflix. By "socializing" the Netflix experience, Netflix now gets 20+M film ratings every single day.  Does it really matter where (which website) these titles are rated?!  It all benefits Netflix.

It's time for EDA and semiconductor companies to see how they can benefit from Business 2.0.  EDA and semiconductor technology is the most advanced ones and those industries solve the most difficult challenges on the technical side.  Yet, they have totally missed the boat on what other industries have already accepted as common business wisdom.  They need to "socialize" their user-experience, create awareness, and turn that into revenue.

Leads vs. Touches

I had lunch with a friend of mine last week - one of the best recruiters I know.  Obviously due to not many companies hiring, as effective as she is, she is not having an easy time getting paid for her services these days.  She was however bragging about a company that she's still working with.  When I asked her how that company is doing, she responded saying "well, they had a great CES."

I hear that all the time.  "We had a great CES" ... "We had a great DAC" ... "We had a great SEMI" ..... And I always wonder what that really means.  To me it's very comic because in none of these phrases the word "great" is defined, so no one is really wrong about the statement and it totally depends on their perspective and more importantly their (sometimes low) standards.

At the same time, I have heard a few VP's of sales quoted saying "there are two types of leads: my contacts, and useless ones!"  I actually found that statement more ludicrous than the "we had a great CES" statement [No wonder sales guys get such a bad rap!].  This statement is merely an attempt by some sales VP's to explain why they can't start sales engagements with people they don't already have a relationship with.  All a good sales guy needs to start an engagement is a phone number and phone.  Nevertheless, the industry is full of sales guys who constantly sell themselves based on their rolodex - and unfortunately the industry is also full of VC's who buy that [stuff].

What everyone seems to miss is something that I have been using in my consulting practice.  There is a difference between "leads" and "touches".  Most people who visit your stand at the trade shows are "touches".  "Leads" are those who 1) have understood your value proposition, and 2) would (at some point) fall in your target segment.  In consumer marketing, the difference between the two is rather small: value propositions are easier to understand, and based on demographics it's relatively simple to know when and how to approach the lead.  In high tech marketing, the difference between the two is so large that it could cause startups to fail or larger companies to totally miss the market.

Unfortunately most marketing executives measure the success of a trade show by the number of "touches".  Touches cannot be counted on as whether a target audience is grasping your value proposition and more importantly how it all translates into sales activity.  For the most part, the more gimmicky your stand is the more touches you'll have.  Touches just represents how many people came to the stand (for whatever reason).  It could even include a lot of your competitors.

The real challenge is knowing shortly after a trade show who the leads were.  This requires knowing every touch's profile, behavior, and experience.  If you knew someone who came to your stand was in the market for similar products, you'd immediately know that he or she is a lead.  This information is however not readily available till months after traditional trade shows.  So I personally believe the value of traditional trade shows gets diluted as more and more people (high quantity) attend them and as it becomes more and more difficult to know about the attendees (less quality).

What comes into picture is new technology.  With online communities and their trade shows, the profile, background, experience, (purchase) behavior of visitors is readily available.  These modern (online) trade shows also enable a wider reach, a 24/7 approach, and lower cost.  A good example of these online community and trade shows is Xuropa.  Xuropa has created a community of the individuals and companies in the electronic design ecosystem.  It also hosts many trade show style stands, suites, and labs for companies to offer a view into their technology - but the real difference is that companies can easily see who the visitors are and quickly qualify the right ones from a touch to a leads.

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"We had a great Xuropa" - people around the industry will soon be saying!

The Main Impedance to SaaS: One Just Doesn't Know What One Doesn't Know!

I can very well understand why Microsoft is not jumping on the SaaS bandwagon, but can't figure out why some other applications don't.  My only explanation is: They just don't get it.

Yes - Microsoft has been struggling to deal with SaaS and cloud computing.  Google has been pushing cloud computing, and a whole bunch of companies are now providing their software in a SaaS model.  You can even run TurboTax (Intuit) on a "cloud".  Microsoft's struggle happens to be because they would end up alienating their own franchise on Windows and Office.  They're seeing the trends and have had some offerings through SaaS, but it's a complex situation for them.  That - I get!

Someone suggested to me that I should be using stamps.com for its convenience.  So I went ahead and signed up on their website, put in my profile, my credit card number, etc.  I was then taken to a window to download their application.  That was the last thing I wanted to do, but since it does offer certain conveniences, I bit the bullet and moved forward.  The next thing I noticed was that an .exe file was being downloaded on my computer.  That's normally not a problem, but I happen to do most of my business on a Macintosh, and an .exe wouldn't do anything for me!  I looked all over the website for a Mac OS version of the application but didn't find one.  To cut the story short, I ended up canceling my account shortly after.  I'm not going to go into how/why I was being charged automatically for months for my membership - that's a whole different story - though it does go to shed some light on their concept about "user-experience". 

I couldn't figure out why a platform such as stamps.com which does have a large user-base would not go the SaaS route.  From the software development standpoint, a SaaS implementation would have almost the the same "backend" and perhaps even a slightly simpler "frontend".  From a business and market reach standpoint, a SaaS implementation would give them far greater access to users, and provides them with a better user-experience.  The only explanation that I could think of was:  Stamps.com just didn't know they could do it this way!!!

I have seen this situation in multiple examples and it all leads to not-knowing-better ("ignorance" is a stronger word than I would want to use).  Software development teams that are comfortable with desktop applications continue to recommend it to their users.   After all, if the only tool you have is a hammer, every problem in the world looks like a nail.