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So You Want to Be an Entrepreneur

Part 3

Entrepreneurship and innovation are all about zigging while everyone else zags. You’ve got your engineering skills down, but what about that dreaded word, marketing? In a world where Pet Rocks sell by the millions, and where buggy and expensive operating systems outsell small, inexpensive, and reliable ones, marketing clearly plays a big role. There’s no need to sell your soul – just know how to sell your product.

In this week’s installment, we examine “the curse of knowledge.” That’s what happens when you know more about your product or service than your customers do. Knowing too much is a liability when it comes time to sell it to someone else. You need to selectively forget what you know and re-learn your product from a customer’s perspective. Let’s look at a few examples. 

Are You Selling Dog Snacks?

Who is your customer, really? Chances are it’s not the person who uses your hardware or software. Doggie treats aren’t sold to dogs; they’re sold to dog owners. All the healthy organic ingredients and funny animal shapes are there to make you happy, not your dog. The dog doesn’t care. (Have you seen what a dog will eat?) More important, the dog doesn’t make the buying decision.

One hundred percent of doggie-treat marketing is directed at you, not at your dog. Likewise, when you’re pitching (and even when you’re designing) your product, pay close attention to your real customer: the one who makes the buying decisions. This oftentimes isn’t the person who’ll use your product or service. Wind River Systems, for example, makes embedded operating systems but pitches its products to managers and executives, not to engineers. Wind River’s marketing emphasizes trust, corporate stability, cost-effectiveness, and so on. Very little is said about technical features or prowess. Its product may or may not be technically superior to others’, but the managers who make the buying decision either don’t know or don’t care, because they value other, less-technical criteria. It’s a strategy that has worked very well for Wind River, which now is part of Intel, a company that has long been using a similar marketing approach.

The Lexus Example

Quality is rarely important. That’s sad to say, but it’s true more often than not. Look at frozen margarita mix, TV dinners, microwave pizza, ready-made casseroles, and other convenience foods. They’re not especially good margaritas or pizzas, but they’re convenient. Who would have predicted Americans would give up Mom’s home-cooked meals for ones frozen into aluminum trays? Convenience trumps quality.

“But what about Lexus,” you ask? “Isn’t that company’s success due to quality?” Not really; its growth was built on price and dependability. When Toyota launched its Lexus brand in the U.S., the cars were cheaper than equivalent Mercedes models and just as reliable. The first Lexus LS even looked like the Mercedes S-class. So much so that a lawsuit nearly erupted.

Even among German luxury cars it’s not really about quality anymore so much as status. Is a Mercedes really better in any quantifiable or practical way than most other cars? Fifty years ago that was certainly true, but every carmaker’s quality has improved so much since then that virtually any new car today is more than adequate for the job. Now it’s about feeling good and projecting prestige. The quality of the machine, per se, is no longer a consideration. It’s already good enough, and most customers can’t tell the difference anyway. It’s the intangible status that comes with the brand that buyers want.

The Best Buy Example

You probably don’t see yourself the way your customers see you. Your corporate identity is a deliberate choice, and it might have little to do with what goes on inside your office or factory. Does Jell-O pitch itself as an offal-processing company?

An example is the local movie theater in my town, which recently started listing its Web address in big letters on the movie marquee. Unfortunately, it’s a long and difficult-to-remember URL, but that’s not the problem. The real sin is that they use the URL of their parent company, a conglomerate that owns and manages theaters around the state. It’s a meaningless bit of corporate egotism that has nothing to do with the movie-going public.

Seriously, who gives a crap about a movie theater’s corporate management or its stock price? Yet this is the link they chose to display in glowing type, right up there with the movie titles, stars, and show times. 

Perhaps the corporate URL is important information for the theatre employees, who apparently need reminding by their corporate overlords as they lurch into work every afternoon. But wouldn’t a staff memo have done the job better? And on the off-chance that a big bucks investor wants to know the details of the theater’s corporate structure, don’t you think he could ask someone?

In contrast, the big electronics chain Best Buy has two separate Web sites, one for retail customers like us (www.BestBuy.com) and one for investors, lawyers, and corporate raiders (www.BestBuyInc.com). Best Buy correctly identified its two different audiences with their two unrelated sets of interests. A cell phone carrier like AT&T is another good example: inside the walls it’s all about managing technology, capital investment, maintaining servers, etc. But outside, AT&T’s customers treat it as a service commodity; a monthly bill to pay. The point is, the public persona is nontechnical and has little to do with what actually transpires within its walls. What it does is not the same as what it says it does.

The GPS Example

What’s interesting to you probably isn’t what’s interesting to your customers. Stated another way, the difficult engineering part isn’t always the valuable part; what’s technically complex isn’t necessarily what’s relevant. Consider how GPS works versus how customers value it. To me, the whole satellite-navigation thing is amazing; the more I learn about it the more I’m amazed that it works at all. A constellation of geosynchronous satellites broadcasting very weak but astonishingly accurate timing signals is very technically complex but utterly irrelevant to the typical GPS user. Converting the satellites’ timing into latitude and longitude coordinates is another complex step all by itself – and also pointless to explain to a user. Even with all that technical wizardry behind it, a box that displays latitude and longitude just wouldn’t be an interesting product, even though it’s impressively complex. Ah, but combine all that with a digital map and it starts to get interesting.

The map database itself is unrelated to the work of launching satellites, triangulating satellite trajectories, or converting timing data into geographical coordinates. The maps have (until recently) come from independent third-party companies. Yet they’re the final important link that makes all the astounding GPS technology useful.

Launching the satellites wasn’t enough. Working out the math wasn’t enough. Building the GPS receivers wasn’t enough. Digitizing the maps wasn’t enough. You’re still not done: the user interface on the GPS receiver is probably the single most important piece of the puzzle because it’s the only part customers will see and the only thing likely to influence their buying decision. The GUI seems almost trivial in comparison to the science and engineering behind GPS navigation, but it’s commercially more important than any of it.

So what’s the lesson here? What’s complex isn’t always what’s important, and what’s important isn’t always complex. Astounding your fellow engineers isn’t the same as impressing your prospective customers. And partnering with an outside company might be vital; it was the combination of GPS technology, digital mapping, and a friendly user interface that made satellite navigation ubiquitous.  

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