Strategy Archives
Here you’ll find a collection of articles published under the Strategy category.
Open Letter to Carol Bartz on Helping Yahoo Thrive
By Rubicon Team on February 3, 2009
Congrats on your new role. For many of us in the tech industry, Yahoo is more than a company, it’s a Silicon Valley icon. By putting in the kind of strong management you represent, I hope the board is signaling the company’s intent to reinvent itself and thrive once again. Your opportunities speak to opportunities for every tech firm, so we’re going to make this an Open Letter in the hope that everyone can learn from the experience you’re about to have.
When the Best Defense is Growth
By Michael Mace on September 21, 2008
If your business is targeted by a larger competitor, the natural response is to want to play defense — to squeeze pricing, take special care of the channel, maybe do some promotions and guerrilla marketing. We’d never advise you to take your eye off a competitor, but the defensive reaction isn’t always the best way to fight. A larger competitor will expect you to do these things, and will usually be well prepared for siege warfare. They’ll be ready to match your pricing and outspend you in the channel in order to drive you out of the market.
Move Quickly to Strategic Alignment
By Nilofer Merchant on September 19, 2008
Executives at the helm of companies from small firms to large enterprises spend much of their time thinking about how to drive growth. But putting those thoughts into action can challenge even the most seasoned leader. Often executives focus on the “what” of strategy at the expense of the “how” — neglecting the “how” makes success a long shot.
Avoiding Strategy Failure
By Nilofer Merchant on September 17, 2008
I’ve watched strategy being developed within companies like Adobe, Apple, Autodesk, and Nokia. I’ve seen strategy created by individuals. I’ve seen the big suits of Bain and McKinsey at work. I’ve seen it done well, and occasionally I’ve seen it done poorly. Having read more than 100 books that define the best thinking on strategy, I’ve noticed that following the existing methods often doesn’t yield success.
It’s not just the methodology. Here are five reasons strategy fails in businesses:
Passion: Santa Clara University Keynote
By Nilofer Merchant on July 2, 2008
Nilofer Merchant, founder and CEO of Rubicon Consulting, gives a keynote address for the Santa Clara University Women’s Leadership Conference. Her topic is Unleash You! Your power, ideas, leadership.
Warning: Don’t adopt the software services model in increments
By Michael Mace on June 23, 2008
Like an oyster, software as a service business models are best consumed in one gulp rather than nibbled over time.
Web 2.0: A Strategy Guide - Professor and Speaker Amy Shuen Captures the Essence
By Marsha Keeffer on June 23, 2008
In Web 2.0: A Strategy Guide, author Amy Shuen demonstrates subject mastery from the first sentence. Steeped in her topic (she’s taught it at Wharton, Haas School of Business, CEIBS and École Polytechnique), the reader gets detailed information on the meaning of Web 2.0. This isn’t a book filled with hype—it provides theory, thoughtful detail and is practical. Chapters end with strategic and tactical questions. The illustrations and screen captures provide depth and clarity. Companies like Flickr, LinkedIn, and Facebook are used as case studies.
Success U — Business Model Key Questions
By Nilofer Merchant on March 27, 2008
About 110 Series A Entrepreneurs have formed into a collaborative through Montgomery & Associates Law Firm. A few of us industry experts are doing “faculty sessions” where we teach the essentials with the idea that quick, fast bursts of what really matters will help short-cut the learning curve and accelerate success. So a few weeks ago, I spoke at what is now called SuccessU (name is under construction) regarding Business Models, and the following are the video clips and notes from the talk. A PDF is available at the bottom of this entry.
A Maturing Business Model
By Bruce LaFetra on February 18, 2008
Dial back a year or two and there were lots of questions about whether mashups supported a viable business model. Concerns centered around: low barriers to entry, copyright issues and the risk of someone else owning the data. While all are legitimate concerns, none seems to have derailed the mashup phenomenon.
So what’s going on? Do developers no longer care about making money? Hardly.
Strategy in a Downturn
By Nilofer Merchant on February 17, 2008
Here’s a rule of thumb: During good times people think it is their strategy that’s good, and in bad times, people think it’s the market.
During a downturn, many executives are much more likely to think a redirect is necessary. In a similar fashion, during times of great growth, we assume that what we’re doing is causing the desired results so staying the course makes sense. Neither point of view is really true. They reflect our perception of what we believe to be true.
Know When to Send in the Lawyers
By Bruce LaFetra on February 16, 2008
A winning business model requires a unified and all-encompassing approach that goes far beyond how monies are collected and products or services are delivered. In an earlier article, I mentioned a long list of functional areas that must align around a winning business model, but neglected to include Legal. How the legal eagles affect business models is critical and deserves an article of its own. That’s right—even the legal team is part of a winning business model.
Is Your Business Model Built for the Long Haul?
By Bruce LaFetra on January 13, 2008
Despite public statements to the contrary, most of us know full well that more technology company business models are built around the technology than are built around customer relationships. The problem is that all technology either becomes obsolete or a commodity given enough time, meaning that centering your business model around a specific technology often leaves you one wrong move away from putting your very business survival at risk. Less thought about, but perhaps even more important is that technology-centric business models limit your offerings and growth potential, so they are associated with lower valuations over the long term.
Winning Business Models: Innovation vs. Invention
By Bruce LaFetra on January 7, 2008
Invention is the classic way to build a successful company. However, invention is much harder for a mature company or a mature technology. Business model innovation is an attractive option in many cases as a way to differentiate an offer, improve profitability or both. Below are five emerging business models.
Looking Beyond Web 2.0: The Fate of the Software Industry
By Michael Mace on December 1, 2007
A popular sport in Silicon Valley is arguing about what exactly Web 2.0 is or is not. Is it about collaboration ? Social networking ? Custom services ?
We think the argument misses the point. Web 2.0 is just an effect of a broader trend: the fundamental remaking of the software industry as a result of the Internet. The label “Web 2.0” is being slapped on each new emerging symptom of that transition, as if each one was the whole picture. That’s dangerous thinking for tech companies because it encourages them to invest in yesterday’s news rather than looking ahead to what’ll happen next.
Winning Business Models: Evolve or die
By Bruce LaFetra on November 1, 2007
You’ve spent years developing your product and its market. People, without much regret, pay hundreds of dollars to buy it. Everything gets better with each successive version as you add more and more functionality. Many have tried, but no one can even really dent your appeal or share. You’ve done so well at becoming the gold standard that your product name has become a verb. Your biggest problem is not adoption, but rather piracy. Seems like you have a winning business model.
Enter Web 2.0 where traditional software companies could not afford to match your truly impressive feature set—needed to challenge you at retail—a couple of guys with little or no funding can now duplicate the core functionality that accounts for the bulk of actual usage. Your lock on the retail market that worked so well for so long means nothing when Web distribution lets the upstarts go straight to the user.
The New Leadership: Social Change and Connectedness
By Nilofer Merchant on April 2, 2007
We are in a time of great change. I suppose that’s obvious. Post 9/11, there’s been much commentary about these uncertain times. Whatever side of the political aisle you are on, you can likely agree that environmental concerns, “terrorism,” war, and other big issues cause us to live in uncertain times. Institutions, much beloved for decades, are seen with some distrust. Journalism, once depicted by Thomas Carlyle as the “fourth estate” so important to democracy, is now one of the most disliked institutions, with a trust level below that of used car sales persons.
Telephony meets the Internet: What it means to you
By Michael Mace on April 1, 2007
The Emerging Telephony (eTel) conference brings together the open source and web telephony community. It doesn’t get much attention in the mainstream tech press, but it’s an interesting place for scouting out telephony trends that might affect the tech industry as a whole. We went to this year’s conference. Three themes stood out that deserve your attention:
When the Best Defense Is Growth
By Michael Mace on March 5, 2007
If your business is targeted by a larger competitor, the natural response is to want to play defense—to squeeze pricing, take special care of the channel, maybe do some promotions and guerrilla marketing. We’d never advise you to take your eye off a competitor, but the defensive reaction isn’t always the best way to fight. A larger competitor will expect you to do these things, and will usually be well prepared for siege warfare. They’ll be ready to match your pricing and outspend you in the channel in order to drive you out of the market.
Sometimes the best defense isn’t defending at all, it’s finding ways to grow the market. If your customers are still early in the adoption curve, and especially if there are new segments you can open up, it’s usually more cost-effective for you to bring in new users than it is to defend every inch of the turf you hold today.
The Holy Grail Is Reachable
By Nilofer Merchant on March 5, 2007
SME / SMB’s—once the Holy Grail of the industry—appear to be a highly coveted group. Moving from being an enterprise player to play in the mid-market is incredibly challenging. We’ve worked with a few companies of late who have asked us to come in and help them achieve this new market summit. Having done this a bunch with some Silicon Valley blue chip names, I can see the common pitfalls they face and want to tell you how to avoid them.
Crossing the Rubicon
By Nilofer Merchant on January 23, 2007
Its meteoric rise is the envy of executives and geeks around the world… for those in technology, it is a marvel of Web strategy, and for Wall Street, it just may be the company all aspire to own.
No view of what matters in 2007 could be complete without mentioning Google. I’m going to propose something really crazy—actually blasphemous—here in Silicon Valley. I’m going to go out on a ledge.
Web 2.0 vs. SaaS
By Michael Mace on November 10, 2006
Web 2.0, meet Software as a Service.
SaaS, meet Web 2.0.
You two need to talk. You’re working on many of the same problems, but you don’t communicate well, and sometimes it seems like each of you barely knows that the other exists.
Understanding the full impact of the web
By Michael Mace on September 27, 2006
This will probably sound crazy, but despite all the hype about Web 2.0 and web startups, the most common mistake we see tech companies making with regard to the web is underestimating its long-term impact on their businesses.
I’m not sure why this is. Maybe it’s a reaction to the Internet bubble — because the short-term effects of the web were oversold, people also tuned out the long-term effects. I know some companies are so settled in their current franchises that they don’t understand how vulnerable they are over time to the changes taking place in the marketplace. Others take the web very seriously in one respect, but don’t understand its full impact across their entire company.
To understand what the web is going to do to our businesses, you have to look at it as both an application development platform and a new communication medium. Either change alone would have huge impacts, but the two together are especially powerful. Here’s what we see happening in each area, followed by some ideas on what they mean for businesses.
Give Your Product Away, Make a Profit
By Michael Mace on June 1, 2006
We recently completed a project for a firm that was considering an investment in the digital photography business. They wanted a survey of the competition, so we dug into all of the startups and new companies bubbling up out there.
We were surprised by the large number of companies that were looking to give away photo editing and photo sharing software. Literally dozens of firms have sprung up that will give you free applications or free storage space for photos. We’re used to seeing free software in the Web 2.0 world, but usually there are just two or three such companies in each market category. In this case, we found dozens.
Help! Microsoft Is Targeting Our Business
By Michael Mace on March 1, 2006
Recently we’ve been hearing that more and more. The companies being targeted usually assume they’ve being singled out for special attention from Microsoft, but when you add up all the reports a different picture emerges. What is not new is that Microsoft sees you as nothing but a bucket of money to them. What is new is that Microsoft is targeting almost every major tech company, all at once. This is a fairly new behavior for Microsoft, and it means the rules of competing with Redmond have changed as well.
Will Cisco’s Latest Move Bring in Big Bucks?
By Nilofer Merchant on March 1, 2006
For every successful market entry, another four fail. We learned that in grad school. One of the few facts that made practical sense, and thus stuck. So it’s a brave company that tries to do market expansion, and Cisco is doing it in a new way that’s worth learning from.
When even your smallest movement makes waves in the market, how do you find the lever that moves you to growth?
The Real Price of the Blackberry Lawsuit: Executive Distraction
By Michael Mace on March 1, 2006
The RIM Blackberry folks finally settled their patent dispute with NTP, averting a feared shutdown of the service. That dispels the ominous cloud hanging over the Blackberry, and now the company can go back to growing wildly, right?
Not necessarily. If RIM’s watching the landscape carefully, what’s happening now is more like emerging from the storm cellar after a thunderstorm only to find two funnel clouds on the horizon.
One tornado is Microsoft. The other is market saturation.
The Art of Selection: The Killer Idea
By Nilofer Merchant on February 1, 2006
There’s a process we use at Rubicon that sounds kind of mean. Us, mean, you ask? Never! But the name of our process certainly sounds tough; it’s the Murder Board process. It’s where the collective brains of the organization get together to discuss options and alternatives for client solutions. And you know what we do? We kill loads of good ideas to get to the best idea. It requires discernment, and an idea of what is really needed. Rather than ever present what I dub “the 99 idea slide,” we aim for the best idea that will cause success.
Reformation in the Hardware Pricing World
By Bruce LaFetra on January 1, 2006
The role of software is becoming increasingly important, and not just for traditional software companies. Perhaps this is nowhere more true than at hardware-focused companies facing the commoditization of their hardware. Hardware without software is nothing more than useless metal and plastic. But if the software is so valuable, why do hardware companies generate so little revenue from it?
Here are three recent examples in how hardware and related pricing models are being transformed:
Bring on the “Singularity”
By Michael Mace on December 1, 2005
Our usual rule when facing any long-term challenge is that you need to change the rules. If a big competitor’s about to bombard the place where you’re standing, move someplace else. If your economic model is becoming obsolete, find a new model. In the case of people living and working in Silicon Valley, the challenge is the rapid migration of tech jobs to low-cost countries, andthe opportunity is to embrace and consciously accelerate the rate of change. Silicon Valley can’t be the cheapest place to write software, but it may survive by being the nimblest.
Between A Hammer and the Anvil: Microsoft Gets More Aggressive
By Michael Mace on December 1, 2005
Any successful company in the tech industry eventually ends up competing against Microsoft in one way or another. But recently we’ve noted a rising tide of competitive action by Microsoft across much of our client base, all at once. In segment after segment — including financial software, antivirus, wireless e-mail, and graphics — Microsoft is making aggressive new pushes to displace the established leaders.
If you’re facing one of these assaults, you may feel like you’re being targeted individually, but the context is that Microsoft is trying to increase its growth by targeting many places at once. We think that now most of the antitrust complaints against Microsoft have been settled, it feels freer to be aggressive. And the company’s delayed delivery of new products has made it especially hungry for quick revenue growth.
Is the Mobile Market Ripe for the Pick’n?
By Nilofer Merchant on November 1, 2005
Questions software executives must answer if they expect to stay on top of the rapidly emerging mobile market space.
Lately, it seems you can’t swing a PDA or Smart Phone without hitting a business or trade publication article that contains the word “Mobile.”
(Dis)satisfaction with Pricing & Licensing Strategies
By Nilofer Merchant on November 1, 2005
Here is a shocker: nobody much likes their licensing models. According to Macrovision’s research, less than one in three enterprises are satisfied with software vendors’ pricing & licensing strategies. Dissatisfaction is not limited to the customers, as only 57% of software vendors are satisfied. While to some extent this probably demonstrates healthy market forces at work—meaning compromise has left neither side is completely satisfied—it also demonstrates the opportunity for new types of innovative licensing such as term- and utility-based models if software vendors can position them appropriately.