Archive for December, 2010

You Are Who You Sell To

December 19, 2010

Had a conversation this am on Twitter with a couple friends about innovation and Yahoo!. Two words that, you may notice, rarely occur in the same sentence these days.

Their premise: Yahoo! is arrogantly mismanaged and misses opportunities to lead by, for example, opening an API that would allow developers to innovate on Yahoo! Groups by adding new features.

My premise: you are who you sell to. In health, you are what you eat. You can’t work off a breakfast of Twinkies and three helpings of macaroni and cheese for supper at the gym. In business, you are who you sell to. If your customers are cutting-edge, you are too..or you go out of business. If your customers are late majority or laggards in the technology adoption lifecycle model, you’ll find your management team adopting their characteristics.

In some businesses that works. If I more to Fort Worth, Texas and open a western wear store, I’ll probably wear boots. Showing up in an Armani suit and Gucci loafers wouldn’t be the best choice.

In technology businesses that can be a problem – or not. When I was at Dell we soundly beat Gateway based in part on their decision to target the first-time PC buyer. Those (at the time) late adopter customers were more risk-averse and required a lot more handholding than our customers. So our service and support costs were lower. Is it a coincidence that they were always slower to adopt the newest graphics chipset or other innovation? Is Yahoo! constrained in its ability to innovate by an innovation-averse customer base? Would their customers welcome innovation, or be confused or put off by it?

[I’ll think about it while I log into Facebook. Wow, look at all the complaints about the latest minor interface change! “Every change makes Facebook worse,” reads one. Sounds a lot like an old-timer railing against the kids on his lawn and the music on the radio. Or a late adopter – and, as we know, those people have all flocked to Facebook and taken it as their own.]

Yahoo! might have done better had they decided to embrace their customers’ non-leading-edge identity (just as I’d embrace Fort Worth by wearing boots if I moved there to sell western wear). Jupiter Jack has embraced their customers’ low-tech identity. I’d never buy one, but I find their positioning as “hands-free calling for people who have never heard of Bluetooth” smart. They know who their customers are and aren’t and know how to think like those customers. And they know to innovate only in ways those customers care about, understand and appreciate.

Yahoo!’s in a tougher place. Their Groups customers are leaving for Facebook Groups and, now, the revised Google Groups. Google Groups used to look and feel pretty much like old Usenet. Why was Google able to change their interface while Yahoo! can’t? I’d argue because Google has acquired customers willing to change and trained them to accept more changes. Yahoo! has actively targeted late adopters. If you disagree, look at Yahoo! stores. If that’s not Jupiter Jack for small business, I don’t know what is.

You don’t have to be leading edge. It’s fine to be Jupiter Jack. But when your customers want you to be Jupiter Jack and the market judges you as an entrant in the Bluetooth Innovation World Cup, you’ve got a problem to solve. And it starts with deciding who you want to be.