Tuesday, September 30, 2014

Focus On Your Customers And Not Competitors

A lorry is a symbol of Indian logistics and the person who is posing against it is about to rethink infrastructure and logistics in India. Jeff Bezos is enjoying his trip to India charting Amazon’s growth plan where competitors like Flipkart have been aggressively growing and have satisfied customer base. This is not the first time Bezos has been to India and he seems to understand Indian market far better than many CEOs of American companies. His interview with a leading Indian publication didn’t get much attention in the US where he discusses Amazon’s growth strategy in India.

When asked whether he is in panic mode:
For 19 years we have succeeded by staying heads down, focused on our customers. For better or for worse, we spend very little time looking at our competitors. It is better to stay focused on customers as they are the ones paying for your services. Competitors are never going to give you any money.
I always believe in focusing on customers, especially on their latent unmet needs. Many confuse not focusing on competitors as not competing. That’s not true at all. Compete hard in the market but define your own rules and focus on your customers. Making noise about your competitors and fixating on their strategies won’t take you anywhere.
But there's also some opportunity to build infrastructure from scratch. When you think of facilitation commerce between small shops and the end-consumer there would be things you would build - I don't know what they are, we will have to invent some of these things - that you might not build in other geographies where infrastructure grew for different purposes.
All emerging economies are different and India is a very different market. Bezos does seem to comprehend that. Things that you take for granted and things that you would invest into in the western countries are vastly different in India. Amazon has a great opportunity to rethink logistics and infrastructure.
The three things that I know for sure the Indian customer will still want 10 years from now: vast selection, fair, competitive prices and faster, reliable delivery. All the effort we put into adding energy into our delivery systems, reducing defects and making the customer experience better, I know those things will be appreciated 10 years from now. We could build a business strategy around that.
Innovating doesn’t mean reinventing strategy, the "what." What holds true in the US is likely hold true in India as well. It’s the execution—the “how”—will be different.

Speaking of Amazon as a growth company:
I like a quote from Warren Buffet who famously said: You can hold a ballet and that's okay and you can hold a rock concert and that's okay. Just don't hold a ballet and advertise it as a rock concert. Are we holding a ballet or are we holding a rock concert? Then, investors get to select. They know we have a long-term viewpoint. They know that we take cash flow that gets generated from our successful businesses and invest in new opportunities. India is a great example of that happening.
Even though Amazon has been in business for a long time with soaring revenue in mature categories the street sees it as a high growth company and tolerates near zero margin and surprises that Jeff Bezos brings in every quarter. Bezos has managed to convince the street that Amazon is still in heavy growth mode and hasn't yet arrived. In short term you won’t see Amazon slowing down. They will continue to invest their profit in their future to build even bigger businesses instead of paying it out to investors.

When asked whether Google is Amazon’s biggest rival:
I resist getting in to that kind of conversation because it is not how I think about our business. There are companies who in their annual planning process literally start with: Who are our three biggest competitors? And they'll write them down. This is competitor number one, two and three. Then they'll develop strategies for each of them. That's not how our annual planning is done. We do have an annual planning process and actually we are right in the middle of it now. We start with,`What'll we deliver to our customers? What are the big ideas, themes?'
Amazon has innovated by focusing on what customers really care about and not what the competitors do. This approach has paid off and I can see why Bezos is keen to do the same in the Indian market.

I really liked what he said when asked about being gifted and being kind:
I believe that humans would achieve anything that we are determined to achieve, if we work hard. So, celebrate your gifts but you can only be proud of your choices. And, cleverness is gift. You cannot become Einstein no matter how much you work. You have to really decide on how you're going to make choices in your life. You get to decide to be a good husband and a good father.
I strongly believe in why making right choices is more important than being gifted. I share this with as many people as I can and I also tell them, “you control your effort and not the outcome.”

Photo courtesy: Times of India

Monday, September 22, 2014

Disruptive Enterprise Platform Sales: Why Buy Anything, Buy Mine, Buy Now - Part II

This is the second post in the three-post series on challenges associated with sales of disruptive platforms such as Big Data and how you can effectively work with your prospects and others to mitigate them. If you missed the first post in the series it was about “why buy anything.” This post is about “why buy mine."

Convincing  your prospects they need to buy a platform is just a first step in the sales process. You need to work with them to convince them to buy not just any platform but your platform.

Asking the right questions - empathy for business

This is the next logical step after you have managed to generate organic demand in your prospect’s organization a.k.a “why buy anything” as I mentioned in the Part I. Unlike applications, platforms don’t answer a specific set of questions (functional requirements). You can’t really position and demonstrate the power of your platform unless you truly understand what questions your prospect needs you to answer. Understanding your prospect’s questions would mean working closely with them to understand their business and their latent needs. Your prospect may or may not tell you what they might want to do with your platform. You will need to do it for them. You will have to orchestrate those strategic conversations that have investment legs and understand problems that are not solvable by standard off-the-shelf solutions your prospect may have access to.

Answering the right questions - seeing is believing

One of the key benefits of SaaS solutions is your prospect’s ability to test drive your software before they buy it. Platforms, on-premise or SaaS, need to follow the same approach. There are two ways to do this: you either give your prospect access to your platform and let them test drive it or you work with your prospect and be involved in guiding them through how a pilot can answer their questions and track their progress. While the latter approach is a hi-touch sale I would advise you to practice it if it fits your cost structure. More on why it is necessary to stay involved during the pilot in the next and the last post (Part III) in this series.

Proving unique differentiation

Once your prospect starts the evaluation process whether to buy your platform or not your platform will be compared with your competitive products as part of their due diligence efforts. This is where you want to avoid an apple-to-apple comparison and focus on unique differentiation.

Even though enterprise platform deals are rarely won on price alone don’t try to sell something that solves a problem your competitors can solve at the same or cheaper price. Don’t compete on price unless you are significantly cheaper than your competitor. The best way to position your platform is to demonstrate a few unique features of your platform that are absolutely important to solve the core problems of your prospect and are not just nice-to-have features.

Care deeply for what your prospects truly care about and prove you’re unique.

The next and the last post in this series will be about “why buy now.”

Photo courtesy: Flickr