With that title I just pulled the pacifier out of the mouths of many marketers...and many of them will start crying.

But smart business people know better. Compartmentalization is very fundamental human behavior, in our personal life and business. In business the definition of “The Market” is the currency that aims to provide quick answers to everyday questions. The problem with market categorizations is that they are often incorrect, irrelevant, stale and frankly, the antagonist of innovation.

Here is why:

1/ People buy products, markets don’t.
No matter what the scenario, in the end people (not businesses) make purchasing decisions. And since people are unique, so are their complex reasons to buy. A unique mix of psychographics and demographics aided by free-market access to the Internet further emphasizes the power of “You” over the power of “The Market”.

2/ Markets are bad type-castings.
Customer surveys show that the compelling-reasons-to-buy rarely match up with the predetermined definition of “The Market”. And since many purchasing decisions rely on factors unrelated to the product (such as budgets, approvals, personal relationships, operational planning, risk mitigation etc.) a prospect qualification or disqualification within that market means absolutely nothing.

3/ Market definitions are bad currencies.
Since there are no rules for defining markets and everyone gets to dream up their own, the value of that market definition is meaningless. Imagine the value of the dollar if everyone gets to define how much it is worth and print theirs at home. Market segmentation and negotiations on market positions with analysts further deflate the significance and trust in traditional market definitions.

4/ Time changes everything (but markets).
Market definitions (in technology) change slowly yet products that attract new buyers change quickly. That means the definition of “The Market” (to which much decision-making is attached) is always far behind the adoption rate of new products and therefor far behind the identification of a new set of buyers. The minute “The Market” is defined, it has become irrelevant and ripe for disruption.

So, where does that leave marketing? Is marketing dead?

No, but it is time for technology marketers to grow up. The pacifier is being replaced by something else. Something more substantial and meaningful. Food becomes the new pacifier and customers will be feeding it to you.

1/ Listen before you speak.
Literally. Forget about what you as the marketer think of the product, early-adopter purchasing decisions are much more valuable in determining how the product is perceived and received. The credibility of new customers counts, more so than the ability of a marketer to spin a story. Spend time with your VP of Sales, in online forums, setup a Google Alert and figure out how to market customer perception.

2/ Manage the promise.
Crucial to the impact of marketing is the credibility of the company promise. Marketing, and specifically Product Marketing is vital in establishing that the promise is fulfilled to the satisfaction of the customer. A few bad words from customers on the internet can cost the company millions of dollars to repair, if it can recover from it at all. So, it is important that the promise to customers does not consist of blatant lies, leads to frustration or bleeds hundreds of support calls. Manage the critical success factors of your promise.

3/ Enable the dialog.
Orchestrate the interaction between customers and prospects and be sure to listen in. They will give you the marketing messages that truly resonate - on a silver platter.

4/ Manage the conversion rate.
Getting crowds to listen or visit the company website is rather simple, getting them to buy the product is more difficult. The company is only measured on the latter and since marketing is usually the scape goat and the first to be questioned when results are down, implementing a mechanism that detects, manages and reports on conversion rates yields invaluable metrics for improvement.

As long as there is macro-economic benefit to using your product, marketing is a very straightforward process. It requires a new class of people that are not afraid to throw the old-class of market definitions overboard and focus on the extrapolation of existing sales success, by simply listening for and consistently reverberating an honest and effective marketing message.

As Don Draper, the biggest ad man at the Sterling Cooper Advertising Agency of the TV series Mad Men explains; I don’t tell stories - I sell product.

Tags: Markets, Marketing, Performance, Promise, Analysts, Google, Psychographics, Demographics

Remember the Citroën ID19 and DS21? These cars produced in 1955 by the former research arm of Michelin, delivered a comfortable ride by providing hydro-pneumatic self-leveling suspension, directional headlights, and many more advanced technologies that now (fifty years later) seem to make their resurgence in modern luxury cars from BMW, Mercedes and Lexus. Likewise, on the technology side Data General provided in the 1980s integrated chat capabilities with the word processing software that ran on terminal based mini-computers, not unlike the capabilities of MSN Messenger, Yahoo! Chat and Google Talk. Many more examples like these exist; I must have seen the technology of MySpace probably twenty times over in the last 5 years. So, what makes innovation pop, or click....what is the right time?

To stay in the automotive realm, I often liken the traction achieved by cars on a dirt road (the entrepreneurial path to success) with the need for the driving weels to rotate at similar speeds. If the left wheel represents innovation and the right wheel represents market demand, it is easy to imagine how innovation pays off when both wheels move a the same or rapidly alternating speeds (client-server technology was one of those examples where the wheel of technology innovation was turning much faster than the wheel representing market demand). That uniform cadence provides a fair amount of certainty that the car will follow the entrepreneurial track you intend to pursue.

My point is the following: to investors, I urge you to look at technology and no matter how old, understand how its benefits apply to a changed market (yes, we need more economist VCs). To entrepreneurs, I urge you to look at markets and adjust the innovation (in most cases downplay it) to meet that demand. All of us in the Silicon Valley could use more macro-economic insight to make innovation work. Lets not just drive for short term exit appeal or stuff our own pockets, but create innovation that has a lasting impact on society.

In the interest of full-disclosure, the Citroën DS21 was my first car...

Tags: VC, Music, Apple, Oracle, Outerbay Technologies, SoftKinetic, IDG, Investment, Einstein, Markets, Analysts

I am perplexed about Plaxo. With so many hot-shots of the Silicon Valley VC elite on the board, including Michael Moritz from Sequoia, Tim Koogle of Yahoo! and Ram Shriram of Sherpalo, this company still seems to be looking for its identity and even worse, its strategy.

Since the Mac beta version was released just recently, I took a moment to try it out. But without going into detail about that disappointing experience, let me tell you how I achieved Plaxo nirvana without it. For over two years I 'abuse' LinkedIn in a way that tops the Plaxo service: every now and then I re-upload all my 2600-and-growing contacts to LinkedIn and then export the whole list back out as a group v-card. The Mac address book will then import those and politely ask me to update the existing contacts. Voila, all contacts are up to date from a single source.

LinkedIn is much more than contacts however, it draws in users that want to connect with others based on past experiences and then exchange their contact information. So, Linkedin is essentially the application on top of a contact database. With 10 Million users Plaxo better figure out real fast what the application on top of it looks like, LinkedIn is moving upstream to a higher value proposition but has an opportunity to move downstream and squash Plaxo whenever it feels like.

So who is not paying attention here?

Tags: Security, Analysts, IDC, Entrepreneurs