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4 Product Strategies for Success

I’m working on putting together one or more entrepreneurial ventures to keep me entertained in 2008. To both evaluate & generate ideas, I’ve put together a rough framework - below - of what I consider to be successful strategies. Any idea I’ve had needs to fit into one of these; if it doesn’t, there’s no business case to it. If I’m short on ideas on any given day, I can pick a strategy and apply it to any given product or market to kick start some thinking.

It certainly hasn’t made me wealthy yet (hooray for dayjobs!), but I’m still at it, and in the meantime you’re welcome to join me. YMMV!

1. Better Mousetrap: Modified product or proposition, same market (i.e.: price or feature competition)
   Ex: Google: simpler search, better results in an already crowded market
2. Re-purpose: Existing product, sold to new market segment
   Ex: Camelback hydration packs sold to the military for solidiers
3. Niche: New product aimed at a previously untargeted market segment
   Ex: Pugspot identifies pug owners as a monetizeable segment
4. Need: Identify an un-addressed, or unrecognized consumer need
   Ex: The banana guard (transporting a common, fragile food), or Overstock.com (liquidating old inventory)

EDIT: Note that I’m not including a definition of success here. Booth Google and the Banana Guard can be considered “successful” products - though the scales are obviously different.

business, design, marketing success

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Unintended Consequences: The commoditization of music

One thing that I can’t help but think as I see the sudden rush to sell unprotected MP3’s is that music will become commoditized: that is to say, competition between stores can only be on price at any given quality level (given the digitally identical product offered at all).

When there’s no opportunity to differentiate a product offering, differentiation has to come from elsewhere - price being the first, easiest, and most natural source thereof.

There are some other factors - like the iTunes/iPod easy synchronization value-add - but fundamentally, a 256k/bit encoded song is a 256k/bit encoded song, wherever its downloaded from.

So - is the industry doomed to go to the retailer with the best cost structure, or the retailer willing to tolerate the lowest margins? Maybe. Expect to see some frantic “relationship building” taking place as drm-free retailers attempt to secure exclusive access to higher bitrate recordings, or specific artists or albums.

amazon, apple, drm, itunes music

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TC40 Sounds Like a Joke

No offence to all of those who busted their asses to present at TC40 (or the demo pit, or whatever), or to those who worked hard behind the scenes to pull it all together. At the end of the day, though, TC40 sounds more and more like a TC insider-club joke, mainly because the winner - “Mint”:

1. Mint had ties to TechCrunch (old TC writer working there).;
2. Mint had two investors on the TC40 voting panel (nice edge).
3. Mint is a branded version of white label financial app Yodlee with some sketchy, poorly working functionality hastily tacked on top. (see Yodlee MoneyCenter).
4. Mint had already taken $5M in funding.

So - from a field of hungry startups, TC40 chose the one heavily connected to the panel, with a marginal value proposition, little innovation (their business model is freaking credit card referrals), and little need for $50k. I can see why TechCrunch has a small but vocal crowd of detractors - the choice of Mint as a winner is - from where I’m seated - a credibility hit against Calacanis, Arrington, and TC.

arrington, calacanis, mint, tc20, tc40, techcrunch, uncov yodlee

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Seth Godin’s Got Sweet Spot Marketing Wrong

I’m a contrarian jerk sometimes. So when I read Seth Godin’s (who I’m a long time fan of, btw) article about Sweet Spot Marketing tonite, my hackles were raised. In it, Seth opines:

“Bloggers around the world are discovering that it’s cheaper and faster and more effective to build their own media channel than it is to waste time arguing with the old ones. So I guess my advice would be to either build your product and network along the way to align with exactly what the middlemen want… or reject them and live/thrive without them.” [from Seth Godin]

Seth’s point is that we shouldn’t bother trying to find the “sweet spot” to get traditional media channel coverage (i.e.: tailoring your subject matter and publisher selection to get in the NYT book review, on Oprah, or whathaveyou).

IMHO: The concept of sweet spot marketing hasn’t changed, just the sweet spots. Yup, its true - if you’re seeking controlled growth (i.e.: a sustainable living, as opposed to accidental success or a flash in the pan), you’re still going to be looking for the sweet spot. 15 years ago, you tried to get your product/article/whatever in your local paper on on the radio morning show; now you’re tailoring your headlines to be Diggable, or writing tub thumping info-war missives to get on Boing Boing. Same difference.

The arbiters of popularity and success may be changing, but success and popularity will always (to a degree) have arbiters. Few and far between are those who can truly refuse to play the game and enjoy success.

godin, marketing seth

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#3 Deconstructing the TC40: GotStatus

#3 in my “deconstructing the TC40″ series (see #1, #2).

GotStatus. Analytics for back-end, server-side stuff.

Summary: Gets a “hold” rating from me. Tech sounds good, value is there, but target market is too small.

The Proposition: GotStatus claims to be the “Google Analytics” of the server-side. The goal is to make gather statistics (about your database performance, for example) as simple and as powerful as Google has made gather stats about your user’s experiences.

Value Add: Monitoring site health is an often complex process. GotStatus wants to make it simple.

Warning Bells: Sites that are big enough to need serious-server side metrics are already getting them through professional IT shops, packages like WebTrends, and built-in transaction logging systems. Sites small enough to not have access to these resources I’d say are generally small enough to not need server side metrics in any serious way at all. In other words, GotStatus is targeting a very small middle ground: companies that are big enough to need server metrics but small enough to not have “professional” means of accessing them. How big is this market?

analytics, gotstatus, tc20, tc40 techcrunch

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#2 Deconstructing the TC40: Faroo

#2 in my “deconstructing the TC40″ series (see #1).

Faroo. P2P search.

Summary: DO NOT WANT.

The Proposition: No crawler, no centralized index. Instead, Faroo relies on users (presumably with a browser toolbar); each page a user visits is added to the Faroo distributed index. Visitor metrics gathered across the Faroo network drive rankings in search results.

Value Add: Better search. Advertising revenue shared with users.

Warning Bells: Revenue sharing is commonly a prop to support a core business that doesn’t have the strength to stand on its own. Faroo results will be based on popularity - a poor proxy for either quality or relevance. Similarly, Faroo’s results will be a thin slice of the net. Finally: Faroo’s website talks about Faroo as an alternative to [Google’s] “info monopoly” - mixing “information wants to be free!!1!” politics with business is a warning sign about the company’s readiness to compete on the main stage. Basically no barriers to entry.

Death Knell: Both del.icio.us and StumbleUpon could build out similar “social search” functionality around their indexes very quickly if the concept got any traction.

faroo, google, search, tc20, tc40 techcrunch

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#1 Deconstructing the TC40: Clickable

In this series of articles, I’m going to share my take on as many of the TC40 as I can stand (or find info on), based on the list provided by Paul Boutin.

First Up: Clickable.

Summary: Looks good. Buy rating.

The Proposition: Its an account management aggregator for search engine marketing. i.e.: Clickable lets you manage your campaigns for Google, Yahoo, and Microsoft through a unified interface.

Value Add: Streamlined administration for individual advertisers and agencies. Highly configurable alerts to maximize responsiveness. A single view across all search properties allows for superior evaluation of ad spend effectiveness.

Business Model: Unknown - subscription fees? A percentage of spend?

Prognosis: Seems to me to be a natural evolution; as the volume and complexity of campaigns online increases, the space for “middle-men” grows - Clickable fits in nicely offering advertisers a valuable streamlining management service, reducing the overhead of conducting ad business online. Industry knowledge and workflow integration provide barriers to entry to competitors.

Warning Bells: Clickable I assume is API dependent, meaning its dependent on the continuing benevolence of Google, Microsoft, and Yahoo. Similarly, Clickable’s value proposition is vulnerable to improvements in G/M/Y’s tools, particularly Google’s, given their dominance of this space.

adwords, clickable, google, sem, seo, tc20 tc40

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Keegy: Geo-relevance rankings

Keegy has an interesting concept: Its a website that serves up “relevant” news by correlating what other people from your same geographic region clicked. Localization is a good buzzword to be touting at the moment - Keegy’s execution seems to be confused on a number of levels.

1. Geography? Arguably, when it comes to web browsing, geographic location is a poor basis for relevance correlation to begin with. Clickstream behaviour is motivated by interests, which in internet land are loosely if at all correlated with location. i.e.: A gamer living in Winnipeg is more interested in international “gaming” news, not news that other people from Winnipeg may have enjoyed. It seems to me that location should be one spectrum of correlation - not the only one.

2. Transparency - Its unclear how Keegy relates my location to the content it serves up. At what level does the relevancy calculation take place? Province? City? Country? Can I change it? Given that there doesn’t appear to be a way to get an un-modified view of the site, I need to know “how” my world view is being generated.

3. Ranking - imagine if the Digg homepage didn’t tell you the number of diggs any given story had gotten. Would you find the page more or less trustworthy as a news source? Just how relevant are results are on Keegy is currently a mystery - i.e.: how much clickstream data is the page that Keegy served up based on? What I want is a “digg equivalent” score for each story that clarifies its ranking: “Viewed by 28 Winnipegers, 76 Manitobas, and 891 Canadians” would be a nice summary.

The Keegy press release helpfully offers this non-explanation:

“In a personalized news service users interact with the site and their activity anonymously generates statistics for each city/country. Using this information, an artificial intelligence algorithm ranks the posts for relevance according to a visitor’s location and the stories and home pages are edited automatically every minute.” [from Press Release]

4. Don’t Confuse Yourself with a Search Engine: For some reason, Keegy creates and maintains its own index of content blogs, fundamentally limiting the depth and breadth of Keegy-served content to its own crawl. Why not tie Keegy in with a browser extension and let users roam the net? I imagine that would create a much more valuable and interesting clickstream, and keeping only reasonably correlated data (across a given geographic user body) would eliminate “outlier” content.

In a nutshell, Keegy seems like a half-implemented slice of a larger project. Err, fortunately Keegy is “…closing seed capital stage on November 21th. and starting their first round of investment next October.” [from Press Release] Well, good luck to you. In a crowded market of social discovery services, I don’t think Keegy has the spark to go big.

aggregator, digg, keegy, news, social stumbleupon

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What does it take to get a Pagerank?

I don’t get it. TechFold has been around since March. Its well-indexed by Google, and well-linked around the tech blogosphere. Its on Techmeme regularly, and well inside the top 50k on Technorati. I publish original content, regularly, and do so in a crawlable format.

So why is the TechFold pagerank 0/10? What does it take?

Any ideas?

google, pagerank seo

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Make it Stop: Groovle

Someone please explain the point Groovle. This questionable service gives you the (thrilling) ability to create a browser homepage with a stock photography background and a bone stock Google search box, branded “Groovle.” Searches conducted go to …. the Google search results page with a crappy Groovle frame on the top.

Check it out, Charlotte Bobcats fans (see the page):

In addition to likely violating Google’s TOS, Groovle pages include this humourous disclaimer on the bottom:

All sports logos are the property/copyright of their respective owners/organizations.
Groovle.com claims no ownership or rights over these images.
All Images are hosted for fans of each team/organization.

Whoa! You mean Groovle hasn’t officially licensed these logos from their parent organizations and leagues? You mean there’s no affiliation between Groovle and these teams??! This is a rare instance where I’ll support the gratuitous application of trademark law.

Yeah, Groovle. Who spends their time on these projects and why don’t they have anything better to do?

google, groovle, litigation trademark

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