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Vertical or Horizontal?

Once upon a time, Silicon Valley was all about the technology. You developed a skill at something and then applied it to anything that would give you an edge over someone else.

So, for instance, if you’re a company like Wolfson, with a knack for developing analog front-ends for consumer items, then you might do a wide range of them for things like, oh, imaging, audio, etc.

They call that “horizontal” marketing.

But that fell out of favor. Maybe engineers got too busy. Maybe someone had a marketing book to sell. Maybe people got lazy. Who knows? All we know is that selling a technology horizontally stopped working.

Now you have to dress the technology up for a specific application. No one is willing to listen to the benefits of a great new idea and come up with creative ways of using it to address their own problems. No, the vendor needs to create an entire “solution” dedicated to that specific application. Heck, in some cases the vendor has to do all the work. “You do my design and make it work, I’ll buy your chip.” (I wonder what that price negotiation is like… “Hey, I did all the work for you, now you’re going to screw me on price?” “Well, do you want to throw all that work away for the sake of a few cents here and there?”)

This is called “vertical” marketing. (OK, when you have to do your customers’ work, that’s called “desperate” marketing.)

The tension between horizontal and vertical is usually undetectable. Companies simply change their messaging and product offerings and go in a new – usually more focused – direction. But occasionally it surfaces, as with a recent Wolfson announcement about new imaging products. Being not as familiar with them as I should be, I went to their website – and it was all audio all the time. If you looked really hard, you could find one imaging link in a sea of audio. But you had to know to look for it. Other than that, Wolfson appears to be strictly an audio company (admittedly, a hot topic).

So I inquired to understand better what the company’s strategy is. They clarified that they’ve been doing analog front-ends for many years – and my interpretation is that this is their true DNA. There are some other subtle indications of non-audio stuff – an announcement a few years ago about a new Japan Design Center for imaging products as well as mentions in their quarterly reports – but you have to look for them. If you didn’t already know that, you simply wouldn’t find it on the website

So my guess is that they were doing analog front-ends horizontally and then got the vertical religion and decided to focus on audio. Perhaps for some very good reasons. The challenge with focusing, however, is whether or not you actually drop the things you’ve decided not to focus on.

As it stands, based on their web presence, it falls completely to their traditional marketing and sales teams to make the imaging sell. The website won’t help. And it creates positioning confusion since no one will ignore the web. Which means the traditional teams have an even bigger job: getting the message out and clarifying the confusion. That’s a heavy load.

I’m not trying to pick on Wolfson specifically – if you look under the hood, there are probably many under-loved divisions in many companies – especially big companies – that have internal goals to make progress while being denied the major marketing channels, which have to remain focused on the prima donna product. I’ve actually lived that life, many years ago. It can be a tough slog.

More info in their press release

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