The Product of Strategy

Co-written by myself and account manager at BNOTIONS mobile development, Marco Tomada.

In many of today’s B2B businesses, service is often a product. We optimize for ‘client experience,’ we think in features (additions that may be helpful to the client), and a problem being solved. In many ways, a service does not differ from a product all that much. We could even go as far to say that yes, a service is a product.

For example, let’s take a look at the service of strategy for a moment. Strategy is a difficult service to bill for, it can be vague, time consuming, resource intensive, and most importantly, intangible – in it’s infancy. However, a good strategy, at the end of the day, is a product that all other products can be built from. Creative, technology, production, and integration are all driven from the strategy as components to a larger delivery. In many ways it is the first in building blocks in everything from build a business, to building a product, to building— a service.

Think of Strategy as the architectural plans to the house. The plan is a physical product that will change along the way, but is always the guideline for execution. Although different architects charge different rates, the good ones know how much research, consultation, and effort will be involved. Knowing all the elements (features) involved helps them understand a pricing model to follow, not based on hours alone or IP, but rather for the collective time and effort involved for the first building block to be completed (the product). The final product is a plan that all other contributors to the home building process will check back to throughout the process. This plan will change along the way, and tradesmen will need to make adjustments on the fly, but the plan is the core of the building that everyone will need to stick to for proper execution.

Let the Strategy be your architectural plan and think of it like making a purchase decision for a product. It will always be a service, but if you approach it as a product to be delivered to guide the rest of the execution, it will be easier for both the client and the service provider to see the value.

In fact, this approach can be applied to all levels of service in the same way. Think of everyday services, your barista in the morning, your waiter at lunch, the software you use that you pay for monthly while at your desk; these are all examples of products in their entirety. You expect each service to solve a problem, create an amazing experience, with features that make this product’s use easier. At a restaurant, your server adds features like keeping your water glass full, telling you the specials in a compelling way, and making sure everything is on time. It is the product of this interaction that makes for a great purchase decision, so when we look at the value, we must look at the whole of the product, not the connotation of service.

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The Copycat Dilemma

I wrote this post for the BNOTIONS blog after being inspired by many Toronto based copycats, which made me wonder who else is doing this around the world.

“Berlin, at first glance, a strange place for the kind of ruthless business execution for which Oliver Samwer is famous,” writes Inc. magazine’s Max Chafkin in this month’s article, The Sincerest Form of Flattery, highlighting copycat tech startups overseas in which billionaire entrepreneur, Samwer is famous. The article’s abstract reads “Now they [Samwer and like-minded entrepreneurs] knock off online shoe sellers, daily-deal sites, and any other Internet-based business you can name. Is there something wrong with that? Or is it just a fact of business in a connected world?” Questions that lead us to wonder whether or not the new model to technology success in business still commends authentic innovation over emulated execution? Inside a company building technology and incubating startups, I had to dig deeper.

I spent the weekend in the Toronto sun chatting with two Groupon competitors, Buytopia and DealFind, of chance networked encounters. A friend of mine introduced me to each with reasons other than networking with fellow tech industry people. Both in the top 5 of Canada’s online coupon industry (DealFind is currently number one), could be considered Groupon copycats. But the market is big, even as neighbors to the US (the home of Groupon, the major innovation leader in the space in the US), has made me wonder how lucrative copycat industries are. At BNOTIONS we spend so much time thinking about innovation and authenticity, it is hard to imagine ourselves building platforms specifically designed to copycat.

That being said, it is hard to ignore the thought of competitive advantage of like-companies when outside the birthplace of the ‘idea.’ In Russia, top search engine Yandex and in China top search engine Baidu relish in their true understanding of their local market, in which Google has been unable to yet conquer. Is a local understanding and connection a competitive advantage, even in an industry so hyper globally connected?

With over 800 million users on Facebook globally, it would be tough to argue a local advantage in global technology. Although, in most traditional industries localized concentration within larger corporations has been a more successful tactic in conquering majority share amongst markets (shown through Decide & Deliver by Blenko & co. of Bain & Co.). With a growing market share in the US, we at BNOTIONS even decided to open an NYC office to be closer to our US customers. Even in an age of digital communication, understanding a local market and becoming embedded within, has a lot of value. Meeting customers face-to-face, understanding cultural differences, and showing a respect for local business practices is something copycat entrepreneurs like Samwer (behind Airbnb, Stella & Dot, Zappos, Groupon, and many other big name technology startups in Europe and the East) has proved that this creates openings in markets.

Local entrpreneur here in Toronto, Alyssa Richard (and friend of BNOTIONS) of Ratehub.ca runs what she has often referred to as “the Bankrate.com of Canada.” She is not an intentional copycat, as she saw the opening in the Canadian market for a specific Canadian mortgage comparison website that Bankrate.com had not yet tapped. She built her ‘like’ company based on product need in an open marketplace, with few Canadian competitors, in which she felt she could conquer, local to her.

In fact, this mentality is exactly how I feel competitors should enter the market. The mentality behind our in-house startup, Atendy, an event registration platform who is, in many ways a competitor to Eventbrite; that having a slightly different approach with a product that you ‘perceive’ as better makes you competitive, not necessarily a copycat. When looking at competing, an entrepreneur’s first question is usually whether or not they can do it better, in their market.

With only two thirds market share in the US, the company birthplace, Google has plenty of US copycat competitors. That being said, it has, in many ways, driven them to build better products faster, as well as expand quicker. Google has over “85% of queries in Europe” (The Economist) showing that maybe traditional conventions of knowing your market better and being local aren’t necessarily true. But at the same time, if you are a copycat (exact clone) in another market, like Samwer, it just might be. Arguments can show positives on either side of the debate between copycats in different countries and authentic innovation expanded.

All in all, I could not deduce a positive or negative response to the copycat craze in the technology industry. The game of execution is in many ways most of the entrepreneurial battle. In the words of Eric Reis, “executing the wrong idea well, is just as bad as not executing the right idea.” At BNOTIONS, we do not strive to copycat, but if we see an idea worth building on, we won’t be shy.

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The Facebook IPO, Development, & the Future

The big Facebook IPO has us all talking. As the shares drop like a rock this week, an argument of the floor price occupies office water coolers everywhere. But, what troubled us most was not the current falling stock, but rather, a comment from one of our top Android developers here at BNOTIONS, regarding building within Facebook.

As you know, we build a lot of technology through the Facebook API, so worrisome Facebook sentiment has more than traders stressed this week. During a project meeting this morning, our developer (who we will remain unnamed as he is damn good and we don’t want anyone else wining and dining him) stated “I think we should not only have the Facebook login, we should have another option to guarantee longevity. We can’t guarantee that Facebook will be around forever.” (Just like we couldn’t guarantee that great shows like Friends would ever go off air).

It was a statement that stopped the crew short. As Facebook has thoroughly announced they are only 10% built (a statement backed up from our close network with Facebook)— this would imply a long runway. With their initial launch in 2004, 10% up to the recent IPO leaves us with 80 years for the other 90% of the whole to follow. As a developer, I think that is a very decent runway, as far as product lifecycle (if anything, excessive in a high tech world when taking into account Moore’s Law).

But our ‘unnamed’ developer has a strong point, negative sentiment around the Facebook brand due to the falling IPO shares can translate in many different ways. If people don’t trust or believe in the brand, there is always a negative impact in more ways than trading on the public market. Concerned stock brokers, concerned developers, and concerned marketers (GM Doesn’t “Like” Facebook, Drops Ads), are a major part of the Facebook ecosystem— all with a current pretense of concern. After all, they are the people behind Facebook’s current revenue, not the users.

But, with eyeballs, you create value. At least, this is the belief in Silicon Valley. In many ways, we believe this too. After all, the people who use our products are who we care about most, as they give us the reason to do what we do. In Facebook’s case, this is no different, except that when you build a corporate behemoth, revenue starts to really matter. Therefore, the people who provide that revenue stream, matter… a lot.

The question we had this morning after our concerned developers comment was whether this is just a statement of timing or a real concern for us as Facebook developers (revenue providers)? In light of the question, we took a look at the social media IPO’s that kicked off the initial social frenzy. Looking back, we get a lot of commentary regarding the dotcom bubble, although, we don’t currently much resemble it (some aspect, yes).

Of the social web, Linkedin kicked off the social IPO with a healthy start rising “171 percent in their first day of trading,” according to Reuters, May 19, 2011 NYSE debut release. Although, not as triumphant as Linkedin, Zynga found themselves “from a $20B valuation to $8.9B in five months (Venture Beat, Kyle Orland),” perhaps a trajectory path Facebook is more likely to follow. Although, Zynga holds a lot of cash for reinvestment, something many investors would say more valuable than the current Zynga price depicts. But neither of these past events can give us an accurate look at Facebook’s future of concerns, as they are all drastically differing companies for the most part.

Since we don’t exactly know all that is going on in Facebook, as far as development strategy, we decided looking at the others was not necessarily an accurate depiction of what is to come. Is Facebook going out of business? Certainly not. Will we stop developing on Facebook? Certainly not. Upon, looking at the others, the only conclusion we perhaps reached is that this ride may be volatile, not that Facebook will not be a powerful brand for many, many years to come (double negative grammatically, makes a positive…)

Jenna Hannon | Director of Marketing | @JennaHannon


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