Category Archives: Consulting

February 20, 2017 · 11:42 am

It Just Works

I’m old enough and digital enough to have used the first IBM PC and VisiCalc. It wasn’t the easiest thing to use but it pretty much was the only thing. DOS led to other operating systems, primarily Windows, that enabled all of us to work more efficiently. Well, that is, unless we were busy figuring out why we couldn’t print or why we were suddenly deluged with pop-up ads via malware.

English: IBM Personal Computer model 5150 with...

(Photo credit: Wikipedia)

That was always the biggest appeal of Apple products to me. They just worked. My primary computer is a MacBook Air and the thought of going back to a Windows environment, no matter how good the reviews are on Windows 10, is dismaying. I’ve had to help friends with their Win10 issues and it certainly doesn’t “just work.” Then again, neither does my MacBook any longer. Sure, it’s nice that the OS upgrades every year (for free!) but I find myself diagnosing problems constantly now (wifi drops, SD cards being ejected at random, and more!).

My next computer will be a Chromebook; specifically a Chromebook with a touchscreen that can serve as a tablet. Chromebooks do just work. They are malware free. Think about how you work now. Most of it is probably via a web browser and in the cloud – my work certainly is for the most part. And they’re inexpensive – I can buy two decent Chromebooks for the price of a new MacBook or a touchscreen Windows machine. But what does this have to do with your business?

The bulk of customers wants that “it just works” experience no matter what you’re selling. They want their problems solved with the least hassle and for the best value. Notice I didn’t say for the lowest price. Just as there are high-end Chromebooks costing more than some Apple computers, so too is there a segment of buyer that want the high-end product and can afford to pay more if they perceive better quality, better service, or maybe a boost to their self-esteem (think luxury cars). But that’s not everyone.

If you want to brag about your computer’s specs then Chromebooks probably aren’t for you. Honestly, they’re not for everyone – you can’t do serious gaming or Photoshop or video editing. If you’re the type that likes to tweak your settings until they’re just right, you probably want to stick with something else. You need to think about your business in this context too. Are you for some very specialized, narrow audiences or are you for the bulk of the consumer base? If the latter, I’d suggest you focus on the “it just works” experience because history shows that’s how the best businesses succeed. You with me?

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February 13, 2017 · 1:01 pm

Contacts, Cost, and Value

A few months ago I installed a contact manager app on my phone. I was quite pleased with it; so much so that I also installed a desktop version of the software on my Mac. As you might gather from some of the stuff about which I rant here on the screed, I read fine print pretty carefully. When I did these installs there was no mention of a trial period nor a limit on the number of contacts. It was quite clear that the version I was using had a premium option with more features, but I was just fine with the basics I was getting for free.

Last week, after a few months of use, I got a message when I opened the app that I would have to upgrade since I had over 1,000 contacts. In fact, I have 2,325 and have had that many for nearly all of the time I’ve used the app. The app no longer performs the free basic stuff it did before. The premium version is $100. Per year. No thanks.

I checked out some other contact apps. Some are also $100 a year, some are $100 once, and some are $2. Based on reviews, there doesn’t seem to be a huge difference between many of them; certainly not a factor of 50 or 100 times with respect to usefulness. Putting aside my anger at my previous app’s misleading and dishonest app store copy which makes no mention of a contact limit, I started to think about one of the most basic business ratios: the cost/value relationship.

Customers assign value based on the benefit they receive – how well you solve their problem – in the context of what it costs them for the solution. Warren Buffett explained it as price being what you pay and value is what you get. Any of us in business need to do that in the context of what other solutions are available and what they charge. A new Lexus and a used Volkswagen but solve the transportation problem but they are only comparable solutions on the most basic level (they both get you from point A to point B). The mistake many of us make is that we look at our unique benefit from our own perspective rather than that of our potential buyer. While we may see the multitude of features our product or service provides, most customers don’t. They see a price tag, first and foremost, and while they might love to have the Lexus they aren’t willing to assign a sufficient enough value differential to the great customer service, the luxurious interior, or the better ride and handling to make up for the large price difference.

I’ll find another contact manager. I don’t even mind paying for one. Like most consumers, I do mind the bait and switch that happened here (and I’ll post a review to that effect in the store). Whatever value we believe justifies the cost we ask customers to incur, we need to be upfront about it as we try to justify the reasons why we’re worth it. Make sense?

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February 10, 2017 · 12:06 pm

Eating At The Buffet

Our topic this Foodie Friday is buffets. Las Vegas is renowned for the lavish and enormous buffets but they can be found almost anywhere across this great land of ours. There are dedicated buffet restaurants, most hotels offer a buffet option for breakfast and many bbq joints offer something similar so you needn’t choose between the 4 or 5 varieties of meat and the 7 or 8 sides they serve. Grab a plate, pile it high, and it’s on!

A Chinese buffet restaurant in the United Stat...

(Photo credit: Wikipedia)

One could make the argument that a traditional dim sum place is a buffet in reverse. Instead of you going to fill your plate from a variety of choices, the variety of choices are wheeled out to you and you choose as they go by. I don’t put salad bars into the buffet category since by definition they have a more limited focus.

My buffet strategy is to skip the “normal” foods (corn, mashed potatoes, cold cuts, etc.) and to focus on the more indigenous specialty items. I don’t want to fill up on food I could get anywhere while missing whatever makes this experience unique. After all, while I have a healthy appetite, I can’t eat everything, right?

That’s business point today. I remind many of my clients that they need to “step away from the buffet.” When you are a growing company and you have a smart, visionary leadership team, there is a tendency to want to try everything on the buffet table. In business, that means chasing down every apparent opportunity in an effort to grow. The reality is that no early- or mid-stage business can afford to do that. Resources are too precious and the time to get to profitability is ticking away. Stepping away from the buffet means having a business plan that’s focused on whatever problem it is that the business is solving for your market segment and sticking to it. Don’t take that to mean that you can’t adjust based on what you’ve discovering on your journey:  you must! But you also can’t keep changing direction as you spot another new hot plate being added to the buffet.

Like a large buffet, business can present an overwhelming number of choices. Our job as managers is to find the best of those choices that align with our business goals. It’s one thing to overeat at breakfast. It’s quite another to run out of resources before reaching sustained profitability. Step away from that buffet!

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