Business Model #1:  Enterprise
This is when your product costs over 100k.  Maybe even in the millions.  The sales cycle is pretty long.  It requires lots of documents to make the sale and build the product.  RFI, RFP, MRD, PRD, Roadmap, the list goes on and on.  This is a tough business to be in.  If you are good at it, then you could get very big like Seibel or Oracle or any other big expensive product suppliers.  If you are a startup, you have to get VERY lucky.  Remend tried this and was not lucky.  They got caught in the classic enterprise mistake.  One customer (the first customer), since they are paying so much, can bully you around to customize the product.  You end up making a custom thing that no one else can use.

Personally, I don’t like this model.  It’s not my style.  You have to slow down releases to a crawl.   You have to cater to single customers.   In general, it’s hard to be creative with this model.

Business Model #2:  Per Seat Subscription
Salesforce is the best example of success with this model.  Your product costs about $20-$50 per seat and you sell hundreds of thousands of seats.  Usually these are SAaS models, where the product is on a website.  It is incredibly hard to sustain this model because competitors come up all the time and ruduce the margins.

This model is tough because you have to scale to many users quickly.  This means you need to make the product simpler.  This isn’t always B2B.  Often this is a B2C play because there are no many more customers in that space.  Personally, I like the B2B space most.  Helping solve business problems is the most rewarding for me.

Business Model #3:  Flat monthly Subscription
This was the Hotkoko model, as well as the Marketo model.  A few thousand a month doesn’t require a RFI or RFP.  A medium level executive can make this decision.  It’s not so much money that it needs huge oversight, but it’s enough to make the customer feel committed and pressured to use the darn thing.

I love this model most.  You can build a pretty substantial product with alot of features. In fact, for this amount of money, the customer expects cool things to be rolled out pretty frequently.  These sort of products often live in a perpetual state of beta.  The key is to keep working on scalability and quality so you don’t paint yourself into a corner.

There are other models out there, but these ones were high on my mind.  Do you know which business model you prefer?

A nice review of Marketo.  I really feel like Marketo is starting to gain momentum in a serious way.  Articles like this make me feel all warm inside that I was able to have a positive impact on a company and on the people who use the product.

This raises an important thought for me.  Positive feedback is critical to making someone feel good about their work and feel committed to the organization.  Without positive feedback, you just don’t know if you are making a difference or having an impact.

In a large organization this is harder, but certainly not that hard.  It’s up to the manager to keep the employee appraised about how their work is being received by the target audience.  Sometimes that means saying, “Hey, I showed that thing you made to the CEO, he really liked it.  I told him YOU built it!”  That kind of statement goes a long way to keeping someone happy and engaged.

It’s always great when you can directly tie your effort to the companies’ bottom line.  This is especially valuable because a company exists to make money.  I felt similar feelings when they announced the improvements to the Intuit website made the company a boat-load of money.

Do you get enough positive feedback?  What can you do to get more/better feedback?  Each circumstance is different, but think out of the box about it.  Don’t “fish for compliments”.  That’s too obvious.  Rather ask your boss to help you tie your work to their goals in tangible ways.  Or maybe some other way…I’m brainstorming but the point is that it is important to feel good about your work.

Managing expectations is always hard.  Lots of angles, lots of risk.  Who is right?  Should you track all of your hours?  Should you pad your hours?  In my experience, people want predictability in an unpredictable world.  They want to hear, “This is exactly what we can do at maximum efficiency.” with the follow-up later of “We delivered everything we said, on time and under budget.”

Personally, I don’t think that creates the best experience of working with someone.  People need stretch goals.  They also need to take risk into account.  Sometimes, not always, but sometimes things go wrong.  And when they go wrong, it is the wise man who had built in some wiggle room.  Under-deliver just once and you tarnish your reputation.  Over-deliver and you are a hero.  If you don’t have stretch goals and some wiggle room you are just setting yourself up for failure.

GEEK ALERT: Warning the following contains Star Trek references.

From Star Trek III:

Kirk: “How long to re-fit?”
Scotty: “Eight weeks. But you don’t have eight weeks, so I’ll do it for you in two.”
Kirk: “Do you always multiply your repair estimates by a factor of four?”
Scotty: “How else to maintain my reputation as a miracle worker?”
Kirk: “Your reputation is safe with me.”

When Scotty visited the Next Generation Enterprise and had a talk with Geordi La Forge. (Episode: “Relics”)

Scotty: “Starfleet captains are like children. They want everything right now and they want it their way. But the secret is to give them only what they need, not what they want.”
Geordi: “Yeah, well, I told the captain I’d have this analysis done in an hour.”
Scotty: “How long will it really take?”
Geordi: “An hour.”
Scotty: “You didn’t tell him now long it would really take, did you?”
Geordi: “Of course I did.”
Scotty: “Laddie, you got a lot to learn if you want people to think of you as a miracle worker!”

With this all said, You have to be careful who you tell this to.  Don’t mismanage expectations by giving away your secret sauce.  It is a delicate balance grasshopper.  Thoughts?

I’ve been pretty excited about the work I have been doing at Marketo. The marketing automation platform we built has alot of really unique models. The way segmentation works is just beautiful. I am really proud of it. Additionally, the stuff coming out in the next few months is making it even better, faster, stronger.

If you would like to see how it works, the marketing guys do a 1 hour demo every week. Click the link and sign up for the date you want. It’s pretty easy to understand and anyone can signup to watch. Even my loving relatives.

Let me know what you think.

I went to a conference today at Yahoo.  Nice campus.  It was P-CAMP Unconference for Product Managers. I took alot away from it.  Some learnings:

1. There is a huge chasm between what serious Agile practitioners proscribe and what most companies who say they are doing agile actually do.  One guy said, “You just have to find the companies that are doing it right.”  I laughed.  I just can’t suspend my skepticism that it just doesn’t exist beyond the 1% of companies.  I am very happy to be proven wrong, but so far, I haven’t met anyone on a personal level who was doing Agile the way they describe in the book.  Not even 50% of the book.  Sorry, I calls em likes I sees em.  Please don’t flame me.  Maybe I am just unlucky.
2. There is a big chasm between big company product managers and startup product managers.  In one session the woman asked, “How many of you release more than twice a year?  I said, “Do you mean twice a month?”  She laughed and didn’t understand.  We push new code to customers every 2 weeks.  That doesn’t mean all projects are two weeks long.  You can work on something for several iterations, but the code is pushed every two weeks, so you need a private brand in source control for longer projects.  The group with 4-10 iterations per year emphasized documentation and product research.  The group with 10-26 iterations a year, obviously could not produce the kind of documentation required.  The first group looked at us like we were insane and not real product managers.
3. I am not, nor do I want to permanently be a product manager in a mid-large size company.   I love UX Design, and I want to manage people and product managers.  But I don’t want product research and documentation to be my life.  At work, I am looking for a Product Manager to report to me. One guy said, “You are hiring your boss.”  I completely, utterly disagree.  I think a UX person, like myself could manage a product manager.  At the very least, it’s worth trying.  I will never know if I can do that if I don’t try.

It worries me a little.  What if a company can’t have a UX person manage a PM?  Will I forever be at that UX Architect individual level?  As always, I am eager to grow and evolve and learn.  Who knows what lies beyond the corner?  Life is not just around the corner.  Life is the corner.

Fun conference.  And Free!  Have to love that.

Project management is hard work.  I feel for anyone who has to do it in the software industry.  The problem is simple.  To do any kind of prediction in project management, you need to be able to guess how long something will take.  Let’s say you want to build a web page.  How long will it take?  Over the last decade of doing just that, I know that a page takes about 1-2 days to produce from a JPEG or PSD.  I know I can make a Marketo landing page template in about 1-2 hours.  I can make a home page in about 1-2 days.  SOunds like a project manager could get that information out of me easily.

But what if he asked me to debug some javascript that was non-trivial.  It might take 5 minutes.  It might take 3 days.  Programming is notoriously hard to predict.  Multiply this by hundreds of bugs and features that really take a variable amount of time to produce.  One programmer might know something out in a day, while another does it in a week.  So what does the project manager do when the boss says, “When will this feature be ready for customers?”

Most project management systems force programmers to track their estimates and then track the amount of actual time spent.  I have been looking at these systems for work. The problem is a UX one.  Who wants to track their hours?? No one, that’s who.  Designers don’t track their hours.  Marketers don’t track their hours.  Why do programmers need to?  Programming is perceived as “magic” by myself and other non-engineers.  This is why we try to force the developer to become robots who can be predictable.  We try to put logic around something we don’t understand.  I have never been in an organization where time-tracking worked.  Maybe someone else has.

So why does every single PM tool out there hinge on time tracking to do it’s thing? Are there no alternatives?

Why am I awake at 6am thinking about this?  Ok, I’m going to cut this short.

I can hardly remember the growing pains from Koko.  We had 30 people at the peak.  I remember agonizing over organizational charts.  I remember thinking about communications lines.  I remember how hard it was to get engineering leaders to communicate effectively (at all) to account managers.  I remember isolated incidents, but I really don’t remember massive pain.  Maybe I am remembering it with rose-colored glasses?

At work, we are growing because of success on the marketing automation platform we built. I am very proud of the job we all did and the response that the market is giving us is just fantastic.  I think there is a long way to go, but fundamentally, it is a strong product in a market with a high demand.  But the growth is not coming without a price tag.  Communication, structure, process and responsibilities are all shifting to try and set up for our next phase of operations.  Who is to say these shifts are good?  Who is to say they are bad?  No one can predict, but they are definitely turbulent.

The growing pains are happening inside me as well.  I am about to manage someone for the first time since Koko.  I have never been a middle-manager before.  How will I handle the new role?  Will I be able to succeed if Marketo grows to 100 people?  1000 people?  I know I feel comfortable in the rough and tumble world of making that first product.  But will I mature my own process to work in the more methodical world of the second and third products?  I hope so, but it’s scary.

People say, “Oh that is a problem you want to have.”  Certainly it’s better than problem you don’t want to have, but it feels stressful anyway.

Sometimes I feel that blogs I read by other designers are very confident.  Do these people not feel insecure?  I certainly do.  Is being open about your insecurities on a public blog a bad idea?  I don’t know.   Being a User Experience Designer means being introspective as well as extrospective (not a word?).  You have to be able to think objectively about emotions without filtering out what is negative in social terms.  I love UX.  I consider myself very lucky that I am able to do this for a living.

The last two years has been a major education for me in Marketing.  First at Intuit, where I felt the entire organization is run by the Marketing Department.  I felt that the main goal of marketing was to project (micro)manage incremental changes in high volume processes.  In other words, there was a marketing person in charge of the shopping cart.  Another marketing person in charge of the download process.  Another one for Quicken.  Etc etc.

I resented alot of their efforts because they did not let the designers help the process.  Rather they assumed that design was subjective and their opinion counted just as much as anyone else’s.  In the end the HiPPO (Highest Paid Person’s Opinion) ruled the day.  Anyway, the point is the “marketing” at Intuit was not about generating demand at all.  It was ALL about changes to the websites or the products.

This last year, I have been at Marketo.  Marketo is launching a new marketing automation system. I have been tasked with alot of things, but one of them is to talk to all the marketing people and help them get started.  This has totally opened my eyes to the other side of marketing.  Demand generation and lead nurturing are huge issues for hundreds of thousands of businesses.  Being able to do simple things like “Send them and email and then follow up next week” is really hard when you are dealing with thousands of incoming leads.

I understand now how direct mail and pay-per-click are just the first steps in a long series of events.  I understand how events and newsletters and advertising fit in.  It has really opened my eyes and given me new found respect for the marketing field as a whole.

As UX Architect for the product, I hope that I do them right and make something that exceeds expectations.  I don’t just want to automate the mundane tasks.  I want to make it enjoyable, like a game.  I want them to have fun.  Right now, it looks like it’s alot of work.   Well, back to the task at hand.  How can I improve the world of Marketing today?

Marketo is starting to launch into beta, bringing on a few customers at a time.  It’s a stressful time for all as there is so much left to do and so many details.  I really appreciate how good Katie was at this sort of thing.  Keeping track of a million details.  She kicks ass.  Meanwhile, I am wearing alot of hats and trying to keep my head on straight.

Christmas is right around the corner.  We have no tree, no presents, no decorations, no nothing.  We are way behind.  We were thinking about the Wii for the kids, but they are out of stock everywhere!  Seriously, what is going on over at Nintendo?  I would think it would be a major disaster if people wanted a Wii and got a playstation because they were out of stock.

Jared had croup cough.  Matthew is screaming lately.  Not in a unhappy way, he is just LOUD.  Ethan is REALLY good at math.  Crap, I have to get to work.  Damn these hats!

• User Experience Architect: “So guys, I am going to go to the user and try the product.  Does the basic use case work?”
• Engineer: “Yes, it works.”
• Quality Assurance: “Yes, it works.”
• User after trying it: “No, it doesn’t work.”
• Engineer: “Must be user error.”

Which part of the joke is funny?  It doesn’t really seem all that funny to me.  More sad and pathetic kind of joke.

Dedication: For all the people who have to sit with the user when this happens, “I feel your pain.”

*Note:  This joke could use a cartoon-like graphic, couldn’t it?