2007
Bose: A great company experience
12.30.07
Target Audience:
Corporate
Bose is a great example of a company that delivers a unique experience. I have had a few after sales experiences with Bose and they've all been very positive and consistent. Most recently I purchased the new iPhone adapter for Bose's QuietComfort 2 Noise Canceling headphone, only to find out that the adapter didn't fit my QC2 headset. After a call into Bose, we found out that 2 versions of the QC2 exist and the adapter packaging did not specify this distinction.
Clearly I was an early adopter of their Noise Canceling technology (I also own the QC1) but they did not punish me for it. With a little bit of tugging they offered to replace my 4-year old headset with a brand new set for free. Gladly my new headset arrived before a 5 hour plane ride to the east coast. Another experience like this with Bose came when I moved from Europe to the US about 12 years ago, I wanted to exchange my 901 equalizer with a 110 volt one (so I did not need to down-convert my 220 volt european equalizer). Again, here Bose offered to replace the equalizer free of charge.
Whether you like the sound of Bose is your own decision, but the flexibility of this, still private company to balance earnings with a sincere interest in keeping its customers happy is admirable. More fundamentally, successful companies understand that building a lasting brand means they pay attention to customer retention. Apple is doing similar things by turning part of their retail store into a support center. Great businesses don't look at support as a cost center but as a way to satisfy customer experience and have them coming back for more.
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Develop an experience, not just a product
12.13.07
Target Audience:
Corporate
By Georges van Hoegaerden
My 3 year old daughter uses my iPhone to play music videos and YouTube videos and has not touched a PC (or better, a Mac) yet. With the same content available on either she's obviously seen me operate my Mac and looks over my shoulder now and then, but finds all the keys and even the "Magic-mouse" complicated. Clearly a usage experience is more important to her than shear processing power. Sounds familiar doesn't it? Nintendo anyone?
What I see in so many early business plans today is the old-fashioned notion of deep technology expertise, something most traditional investors still harp on. I see too many BMW engines being developed without attention being paid to the development of The Ultimate Driving Experience®. True, you can't build the driving experience without great engines, but BMW, like no other vendor understands that the total experience is the selling point. In the end, technology will become commoditized and its differentiation will be determined by the way it interacts with content, media, social network, end-users to create a well designed user experience.
Apple is another company that understands that focus on user experience very well. Its products are a piece of art, its function (to a novice) is at least competitive. Buying a Mac is an experience, and so is using it. A much better experience than buying a PC in every way. The box your Mac comes is even a work of art, the way it folds open, the new materials, everything builds to the experience. As a customer you feel special, owning an iPod with your name engrave on it and all your music in it. And that is what Apple customers are buying into: feeling special and appreciated. Attention paid to you!
Now every market segment has its own definition of user experience, so don't go do what Apple does before you understand how you can differentiate. But every software, service or content vendor should consider building a unique customer experience that in the end - sells more. It's a CEO level responsibility because it involves making sizable investments in complementary areas, not just a marketing ploy. The days of just selling a product are over.
My 3 year old daughter uses my iPhone to play music videos and YouTube videos and has not touched a PC (or better, a Mac) yet. With the same content available on either she's obviously seen me operate my Mac and looks over my shoulder now and then, but finds all the keys and even the "Magic-mouse" complicated. Clearly a usage experience is more important to her than shear processing power. Sounds familiar doesn't it? Nintendo anyone?
What I see in so many early business plans today is the old-fashioned notion of deep technology expertise, something most traditional investors still harp on. I see too many BMW engines being developed without attention being paid to the development of The Ultimate Driving Experience®. True, you can't build the driving experience without great engines, but BMW, like no other vendor understands that the total experience is the selling point. In the end, technology will become commoditized and its differentiation will be determined by the way it interacts with content, media, social network, end-users to create a well designed user experience.
Apple is another company that understands that focus on user experience very well. Its products are a piece of art, its function (to a novice) is at least competitive. Buying a Mac is an experience, and so is using it. A much better experience than buying a PC in every way. The box your Mac comes is even a work of art, the way it folds open, the new materials, everything builds to the experience. As a customer you feel special, owning an iPod with your name engrave on it and all your music in it. And that is what Apple customers are buying into: feeling special and appreciated. Attention paid to you!
Now every market segment has its own definition of user experience, so don't go do what Apple does before you understand how you can differentiate. But every software, service or content vendor should consider building a unique customer experience that in the end - sells more. It's a CEO level responsibility because it involves making sizable investments in complementary areas, not just a marketing ploy. The days of just selling a product are over.
Pairing chefs and cooks in technology
12.05.07
Target Audience:
Entrepreneur
Having done early stage startups for 10 years now, I can't help but compare my search for interesting companies in and around Silicon Valley to one of my favorite hobbys: good authentic food.
In the food industry there is a clear distinction between a chef and a cook. A chef invents new dishes from scratch through experimentation, deep knowledge and experience. A cook takes a few successful recipes, adapts them to his beliefs and serves them up to a large audience. Both are fundable business models, but they rely on different factors to become successful.
In technology this distinction is not often thought about when funding companies. It would be very easy to judge that a chef is always a better innovator to invest in, but I find the opposite to be true in many scenarios I've run into. Different investment and growth scenarios are to be expected from investing in Daniel Boulud's new restaurant in China versus the growing chain of Fleming's restaurants, even though they taylor to roughly the same price points successfully.
Research institutes spin out great chefs, but struggle with scale and mass adoption. Great sales, marketing and business founders in technology usually depend on the continuous innovation only the chefs can provide. The workings of VC funds forces us to combine the chefs with cooks so that the ecosystem provides both continuous innovation and mass adoption at an early stage.
As a CEO, we provide the leadership and direction that pairs the chef and cooks, all you need to do is: do what you do well. Just like Remy in Ratatouille, we will pull your hair to ensure the right dishes are produced - on time.
The new photo-editing era, a me-too service
09.18.07
Target Audience:
Entrepreneur
By Georges van Hoegaerden
Photo-editing today is still an art form, a specialized and necessary art - and "endured" by prosumers. The great photography you see hanging on walls, on websites or in magazines, all have been edited digitally. Not necessarily to create some outrageous creative effect but because not a single camera accurately captures what your eyes see. Not since the invention of photography in 1870.
Camera vendors promise better results when their customers purchase a more expensive dSLR (digital Single Lens Reflex) camera, a better lens, a solid tripod, a new filter, and, while we’re selling: a new photo bag. Yet, none of those products do anything to change the fundamental difference between what your eyes see and what the camera produces. With a healthy growth of more than 60% worldwide in dSLR sales (according to new 2007 numbers from CIPA), most camera vendors are not in a hurry to out-innovate themselves as their current stance is feeding their business so well. So, the problem remains, camera output is far from ideal.
So today, the great results photographers strive for can really only be achieved through editing, reproducing what you tried to capture. That editing today happens primarily on the desktop (less than 10% of the whole photography market edits online) and by digital SLR users with a great sense of quality and aesthetics. Products are plentiful, such as Adobe Photoshop, Adobe Lightroom, Apple Aperture and my favorite: LightZone. Yet none of those products completely hide photographic complexity to its new users; the massive numbers of dSLR buyers that just want to create great photographs.
Photo-editing should work like a car, simply put the key in the ignition and drive (without having to worry about how the engine and the transmission works). The editing tool of the future should embed the photographic knowledge and make decisions or recommendations for you, rather than requiring its users to become proficient in the minutiae of color and light. Just like a car, photo editing should be able to go where others have gone before, enriching the experience of new users on a continuous basis. New editing techniques should be sharable through a language we all understand, a photograph. In short: edit "like-Mike" and me-too editing is born.
I believe photo-editing will move away from what it is today, a basket full of technology tools to a service through which the sharing of editing techniques will enable the new "language" of photo-editing. That dramatically simplified language will subsequently enable editing for the long-tail of the photography market, the massive market of point-and-shooters. New technologies such as Pixenate, Picnik, Adobe Photoshop Express already rush to deliver a new basket of tools for the consumer market. And many others will follow.
Today, plenty of opportunities remain in the prosumer editing space in which no vendor has amassed even close to 30% penetration. New editing capabilities are bound to drive the marketplace in which monetization of photographs and, eventually a free-market for photography can flourish.
What's left for the innovative camera vendor is to build a proprietary imaging pipeline that dramatically reduces the need to edit. With 90% of dSLR vendors using the same imaging pipeline (behind the sensor) the time is right to change the way a camera captures data before it reaches the sensor. In the same way your eyes do very smart tricks before light hits the retina.
Photo-editing today is still an art form, a specialized and necessary art - and "endured" by prosumers. The great photography you see hanging on walls, on websites or in magazines, all have been edited digitally. Not necessarily to create some outrageous creative effect but because not a single camera accurately captures what your eyes see. Not since the invention of photography in 1870.
Camera vendors promise better results when their customers purchase a more expensive dSLR (digital Single Lens Reflex) camera, a better lens, a solid tripod, a new filter, and, while we’re selling: a new photo bag. Yet, none of those products do anything to change the fundamental difference between what your eyes see and what the camera produces. With a healthy growth of more than 60% worldwide in dSLR sales (according to new 2007 numbers from CIPA), most camera vendors are not in a hurry to out-innovate themselves as their current stance is feeding their business so well. So, the problem remains, camera output is far from ideal.
So today, the great results photographers strive for can really only be achieved through editing, reproducing what you tried to capture. That editing today happens primarily on the desktop (less than 10% of the whole photography market edits online) and by digital SLR users with a great sense of quality and aesthetics. Products are plentiful, such as Adobe Photoshop, Adobe Lightroom, Apple Aperture and my favorite: LightZone. Yet none of those products completely hide photographic complexity to its new users; the massive numbers of dSLR buyers that just want to create great photographs.
Photo-editing should work like a car, simply put the key in the ignition and drive (without having to worry about how the engine and the transmission works). The editing tool of the future should embed the photographic knowledge and make decisions or recommendations for you, rather than requiring its users to become proficient in the minutiae of color and light. Just like a car, photo editing should be able to go where others have gone before, enriching the experience of new users on a continuous basis. New editing techniques should be sharable through a language we all understand, a photograph. In short: edit "like-Mike" and me-too editing is born.
I believe photo-editing will move away from what it is today, a basket full of technology tools to a service through which the sharing of editing techniques will enable the new "language" of photo-editing. That dramatically simplified language will subsequently enable editing for the long-tail of the photography market, the massive market of point-and-shooters. New technologies such as Pixenate, Picnik, Adobe Photoshop Express already rush to deliver a new basket of tools for the consumer market. And many others will follow.
Today, plenty of opportunities remain in the prosumer editing space in which no vendor has amassed even close to 30% penetration. New editing capabilities are bound to drive the marketplace in which monetization of photographs and, eventually a free-market for photography can flourish.
What's left for the innovative camera vendor is to build a proprietary imaging pipeline that dramatically reduces the need to edit. With 90% of dSLR vendors using the same imaging pipeline (behind the sensor) the time is right to change the way a camera captures data before it reaches the sensor. In the same way your eyes do very smart tricks before light hits the retina.
I have a dream...
01.08.07
Target Audience:
Macro
By Georges van Hoegaerden
Many times I am asked to help a foreign (usually European) company to make it in the United States. But the pursuit of the American dream requires that sacrifices be made. Everyone wants to be a star like Elvis Presley, yet few have the real determination to do so.
So, why are US companies so different. The internet is releasing the fictional boundaries of technology, making its usage and its future development available to anyone. Universities in Europe are doing a much better job teaching technology, yet we don't see a significant amount of European companies become successful. What is going on?
While I don't have all the answers, I can offer a few personal observations of why the American way - and - dream is alive and well:
1/ More entrepreneurs are bred by a capitalistic society than a socialistic society. Entrepreneurs with a personal stake and drive for success boost investor deal flow and premium supply. A significantly larger investor pool yields higher valuations for premium supply.
2/ Solid early-stage business acumen. While technology and programming skills can be acquired by virtually anyone, the European petri-dish, the ecosystem that supports the early-stage exchange of technology products and services is missing. As a result people with the business skills needed to bring those early stage products to market rapidly is virtually non-existent in Europe.
3/ Resilient attitude. Young Americans (and ex-pats like me who never felt at "home") are taught to make money and make themselves happy, young Europeans are taught to get a job at a reputable company and be happy. Taking risk and thinking different is a requirement of being a successful entrepreneur, in addition to withstanding a great amount of adversity.
4/ More risk-taking buyers. Customers, partners and acquirers are more entrepreneurial too. Aggressive competitive cultures force buyers to be more entrepreneurial. Technology innovation is accepted as the instrument of differentiation in many US businesses and customers will buy products that give them competitive edge and better quality-of-service.
5/ Continuous focus. Focus on success, short and long. Building a business that goes through several transformations to meet continuous market milestones is crucial to success, rather than a formal majestic plan with many dependencies that never materializes.
So, is there no hope for foreign technologists? Au contraire, I've seen some great technologies that, if unlocked, can find early traction and impressive valuations. It's time to judge a technology not by the country it comes from but the content of its innovation. The american dream is waiting for you. Are you up for the ride?
[In remembrance of Martin Luther King]
Many times I am asked to help a foreign (usually European) company to make it in the United States. But the pursuit of the American dream requires that sacrifices be made. Everyone wants to be a star like Elvis Presley, yet few have the real determination to do so.
So, why are US companies so different. The internet is releasing the fictional boundaries of technology, making its usage and its future development available to anyone. Universities in Europe are doing a much better job teaching technology, yet we don't see a significant amount of European companies become successful. What is going on?
While I don't have all the answers, I can offer a few personal observations of why the American way - and - dream is alive and well:
1/ More entrepreneurs are bred by a capitalistic society than a socialistic society. Entrepreneurs with a personal stake and drive for success boost investor deal flow and premium supply. A significantly larger investor pool yields higher valuations for premium supply.
2/ Solid early-stage business acumen. While technology and programming skills can be acquired by virtually anyone, the European petri-dish, the ecosystem that supports the early-stage exchange of technology products and services is missing. As a result people with the business skills needed to bring those early stage products to market rapidly is virtually non-existent in Europe.
3/ Resilient attitude. Young Americans (and ex-pats like me who never felt at "home") are taught to make money and make themselves happy, young Europeans are taught to get a job at a reputable company and be happy. Taking risk and thinking different is a requirement of being a successful entrepreneur, in addition to withstanding a great amount of adversity.
4/ More risk-taking buyers. Customers, partners and acquirers are more entrepreneurial too. Aggressive competitive cultures force buyers to be more entrepreneurial. Technology innovation is accepted as the instrument of differentiation in many US businesses and customers will buy products that give them competitive edge and better quality-of-service.
5/ Continuous focus. Focus on success, short and long. Building a business that goes through several transformations to meet continuous market milestones is crucial to success, rather than a formal majestic plan with many dependencies that never materializes.
So, is there no hope for foreign technologists? Au contraire, I've seen some great technologies that, if unlocked, can find early traction and impressive valuations. It's time to judge a technology not by the country it comes from but the content of its innovation. The american dream is waiting for you. Are you up for the ride?
[In remembrance of Martin Luther King]
New opportunities in gaming
By Georges van Hoegaerden
While Sony, Microsoft and Nintendo show impressive results from a console perspective the game-play market today appeals to a very narrow demographic. Consoles are purchased by an age group 25-40 years old. While that demographic may be most capable of purchasing these consoles, we know from the types of games sold at roughly $50 per game that daddy plays more games than his children.
One could also argue that the most playful age range in our lives is from age 2 to 16 years old, yet the games and platforms provided do not meet that demographic. Fewer than 40% of teenage girls play any games, feeble attempts to turn existing games pink did not yield more sales, according to an executive at Electronic Arts.
So, rather than a deep dive in the existing game-play demographic, with even better graphics of game consoles, vendors should focus on a game-play experience that meets real market demand, removes the negative and vegetative connotation of gaming and instead exercises mind and body.
Nintendo has taken the first step of targeting a new game-play demographic and quite successfully so. Robbie Bach, president at Microsoft (who I recently spoke to) described his initial XBOX objective as building the best performing gaming experience. Sorry Robbie, wrong business objective. Sony is by far the leader in console gaming and has great opportunity; to lose or bolster its lead. Execution will be key, Jack Tretton will have his hands full on that one, but Sony's powerful assets in home entertainment should help.
While the console vendors battle it out on price and performance, we are seeing new entrants prepare themselves to enter the home entertainment demographic with new "game-play" propositions. The console vendors will see competition at a different level, Apple is just one of them.
While Sony, Microsoft and Nintendo show impressive results from a console perspective the game-play market today appeals to a very narrow demographic. Consoles are purchased by an age group 25-40 years old. While that demographic may be most capable of purchasing these consoles, we know from the types of games sold at roughly $50 per game that daddy plays more games than his children.
One could also argue that the most playful age range in our lives is from age 2 to 16 years old, yet the games and platforms provided do not meet that demographic. Fewer than 40% of teenage girls play any games, feeble attempts to turn existing games pink did not yield more sales, according to an executive at Electronic Arts.
So, rather than a deep dive in the existing game-play demographic, with even better graphics of game consoles, vendors should focus on a game-play experience that meets real market demand, removes the negative and vegetative connotation of gaming and instead exercises mind and body.
Nintendo has taken the first step of targeting a new game-play demographic and quite successfully so. Robbie Bach, president at Microsoft (who I recently spoke to) described his initial XBOX objective as building the best performing gaming experience. Sorry Robbie, wrong business objective. Sony is by far the leader in console gaming and has great opportunity; to lose or bolster its lead. Execution will be key, Jack Tretton will have his hands full on that one, but Sony's powerful assets in home entertainment should help.
While the console vendors battle it out on price and performance, we are seeing new entrants prepare themselves to enter the home entertainment demographic with new "game-play" propositions. The console vendors will see competition at a different level, Apple is just one of them.
