Free Web Analytics

For those of you involved in Internet Marketing, you know that you just can't get enough data. Most of you, I'm sure, are already using a web analytics package today. Certainly anyone with an ecommerce site is a very heavy user of web analytics data. There are many popular commercial packages out there, including websidestory, websense, urchin and omniture to name a few.

But even if aren't selling directly from your site, say you have a B2B site, in a niche market with high-priced products, you should still be tracking your sites traffic with a web analytics package. It is still very important to measure your traffic, and see the effect that various online and offline marketing campaigns are having on visitors to your site. Or it may be very helpful to see what content on your site is getting the most attention. If you don't measure what's going on with your site, you might as well just have a paper brochure--you aren't taking advantage of having an intelligent, electronic home for your company.

There are a number of free (advertising supported) services out there, which do a good job of tracking basic data on the visitors to your site.

I use a service called statcounter (www.statcounter.com)

It is one of the free sites I referred to earlier. I've been using it for a couple of years. It works great, and is very easy to use. I set it up on my entire site in a couple of hours, and was off collecting data about my website guests. If you have a modest budget or just don't have a need for extremely detailed analytics, I suggest that you check out StatCounter.

Phil Morettini
PJM Consulting
www.pjmconsult.com

Should You License Your Technology?

So when should you license your technology to other companies? This can be a complicated question, since I always say “no one sells your product like you do.”

Depending upon your tendencies, there is a bias toward holding everything you develop close to the vest, unwilling to give that hard-earned technical advantage to another company. Or you may be on the other side of the fence, and want to very quickly “cash in” on a technological development—thinking that there are very large companies out there that can do a much better job selling the product than you can.

So really, what’s the right approach? Just like most other decisions facing managers of technology companies, there is no one simple answer. It really does depend on your situation.

Have a Process

The best way to approach a decision of this nature is through a methodical, logical process. It shouldn’t be done emotionally, or without proper data. To come to the optimal answer, you need to be very honest about the position of your own company in the market, your priorities, company strengths and weaknesses, and the level of resources available to you. In addition, you need to have a solid understanding of the potential of the technology in the market, whom might be an attractive licensee, how interested they may be, and “can you license to someone else and still sell your own version”?

These, and many other questions, should be answered before you reach a conclusion. All too often, however, I see companies make a snap decision on whether to pursue a licensing strategy or not. This is very strategic question for a company, yet I have seen the decision made on a whim—with less thought than “where should we have lunch today?”

What have you got?

So let’s walk through an example process. First of all, what have you got--really? Is this IP something that is a fundamental step forward, or a “nice to have?” Things that are fundamentally unique, you will want to think very carefully about before sharing with others. It may be the best thing to do, but I would recommend thinking it through most carefully, if you have something truly unique and desirable. Lesser inventions carry lesser risks of lost opportunity costs, if they are licensed out.

Does it fit the Core Business?

Second, how does it fit with your current business? If it doesn’t fit with your core business, and you have no reason to “run away” from your core business, the decision becomes a lot easier. If your current business is thriving and you have quite of bit of runway left to pursue in that market, opening up a second business has a high likelihood of becoming a distraction—potentially harming the core business. Plus, it is very likely in this instance, that you will not be able to do the new opportunity justice, anyway. So to avoid sub-optimal outcomes in both business areas, it almost always makes more sense to license the technology to another player, whose business is a better fit—and one who will dedicate the resources required to gain success.

Can you “have your cake and eat it too”?

Third, if it does fit the core business, can you license it to other segments on a non-exclusive basis? This is an important question to consider. If the answer is yes, I call this “having you cake and eating it too.” The answer to this question is dependent upon a couple of things. Are there “fences” that can be set up between your market segment, and that of the potential licensee?

As an example, let’ say you have a new enterprise application that is different, but complementary, to your existing core product. This new product can be sold to the same type of large corporate customer that your existing product is sold to. But this new application also has strong potential in government markets, where you have no current presence. The government market is very different, and contacts are crucial to success. Instead of trying to build distribution into this new government market from scratch (which can be time-consuming), it is potentially a very wise move to license the new product to a company with existing, strong government business. They can sell it under their own label, put marketing money behind it, provide support, etc. In this way you have accessed that market, without entering into an area outside of your core competency, and without spreading around your scarce resources.

Non-exclusive licensing can be a great compromise

This is the type of “complementary” licensing deal that can be very effective in optimizing your total return on a technology. The key to this strategy is for there to be a good “fence”, so that you don’t create channel conflict between you and your licensee. In this example, you’re in the corporate market, and the licensee is in the government market. So it’s very clean and complementary, basically incremental revenue with little costs.

There are other examples of non-exclusive licensing where you end up competing with your own product under a licensee’s label. This can work as well, but it’s a lot trickier to manage. You will run into channel conflict issues, much like selling your own labeled product through reseller channels, with the added twist of another brand involved in the competition.

The final thing to consider is timing. How well protected is the technology, and how fast is the technological curve moving in this market space? If the market isn’t moving fast technologically, there may be no one overtaking you quickly. A sleepy, slow moving market tips the scales toward keeping the technology and developing the market for it in-house, rather than aggressively licensing it to others. Regardless of your resources, it becomes more likely that you will have time to exploit the IP, when there is little fear of someone leapfrogging your technology. If on the other hand, you’re positioned in a brutally competitive market with rapidly evolving technology, the arrow moves the other direction. In this case, IP is a fleeting advantage, and one that better be used ASAP, before it becomes obsolete. This scenario begs for a strategy of aggressively licensing the technology, to obtain the best return possible, in the short period of time that the IP will be relevant.

There is, of course, much more to consider when undertaking a decision to license/not license out your technology. This discussion provides an introduction to some of the major points that should absolutely be reviewed in any licensing discussion.

I’d love to hear some stories about your own licensing efforts, and hear points of view from a different angle. Post a comment or email me your thoughts.

Phil Morettini
PJM Consulting
www.pjmconsult.com

Web Site on White Papers

I wanted to give you a heads up on another great site I ran across a couple of months ago. It's whitepapersource.com

White papers are one of those marketing ideas that have become quite popular in recent years, but if you've never created and used one, it can be a little intimidating to get started. This site provides much to get you started, and maximize your effort.

This site is perfect for B2B marketers who are new to using white papers in their marketing programs. It's a very comprehensive "how to" source for the creation and utilization of white papers. Included are sections on writing (including finding a writer) and marketing, as well as a resource section, news from the white paper industry, a free newsletter, and a forum to exchange ideas with peers, as well as to get your questions answered by experts.

I recommend you check it out-let me know what you think!

Phil Morettini
PJM Consulting
www.pjmconsult.com

Shooting Stars or Industry Stalwarts—What Makes a Great High Tech Company?

You've seen them many times. The software company that starts off like a bullet, racing at the high tech equivalent of 0-60 mph in 4 seconds. These companies come out of nowhere, and are an immediate factor in their market.

There are many examples, in nearly every major market segment. Netscape comes to mind as one of the more famous. Peregrine Systems here in San Diego is another example. I’m sure every reader can think of many more.

So what is the difference between one of these “shooting stars” and the Microsoft’s, Hewlett Packard’s and Dells of the world? After all, in the beginning, they pretty much all look alike on the surface.

Cutting Corners

I believe if you look under the covers, however, there are real differences. It’s the difference between a fast rising house of cards, and a mansion built to withstand Hurricane Katrina. You start with a solid foundation when you go to build something lasting—which of course a house of cards is lacking completely.

Now most of the time, people don’t intentionally set out to build a house of cards. It usually happens when the stress and strain of the marketplace gets in the way. That’s when management begins taking short cuts. It’s often an incremental thing. Cutting expenses in that key project, so that you can appease Wall Street by making next quarter’s numbers. Accepting just a slightly less than normal quality level, to allow that behind-schedule new product to finally get out the door. Hiring just a few less engineers than was in the plan for this year. Reducing the corporate, brand-supporting Ad buy—a ten percent reduction won’t hurt—will it?

It’s all just meant to be temporary—but cutting corners has a way of becoming permanent by default, especially when there is brutal competition, or extreme pressure from the Street.

Winners Maintain the Foundation

Every great company has a foundation that it is built on—and the care and maintenance of that foundation is a non-negotiable expense for long-term success. With HP, it was historically the R&D budget and reliability of its products. The R&D monster was always fed, because product innovation was what fueled the company’s growth for over 60 years. And for a long time, reliability was never compromised. The product might end up being a little too costly, a little too big, a little too heavy or late to market—but it was built like a tank, and the products were unquestioned leaders in reliability. Indeed, I would say that the HP brand stood for strong reliability for many years. Now that the company has lost it’s way a bit, I don’t know that the HP brand still has the same reliability cache, which it had in past years. Still it’s a quality brand; mind you, just not quite the same. The maniacal devotion to quality just isn’t quite there anymore. And it’s funny that just about the only thing that has been truly “invented” at HP in recent years is the word “Invent” being placed alongside the logo in advertising. Ironically, even with the dearth of HP engineering invention in recent years, R&D expenses remain high relative to competitors—the worst of both worlds.

Microsoft was built on monopoly power and paranoia. And I don’t mean that in a negative sense. Depending upon your perspective, Microsoft either shrewdly created the DOS/Windows monopoly position it has enjoyed for years—or luckily fell into it. I suspect it was a bit of both, but no matter. Since realizing their position, Microsoft has never lost their aggressiveness, or failed to leverage their monopoly platform. Some believe they’ve overstepped at times, and I have always felt that they left a lot of money on the table rolling things into the Operating System—essentially given it away for free. But they’ve reacted every time there has been a threat—Apple, WordPerfect, Novell, Lotus, Netscape—the list of road-kill is quite long. Some of their moves may have been overkill, as their paranoia seems to present every software company in the world as a potential threat to their dominance. But they never took their eye off the ball, building and protecting their OS and Office franchise with as much firepower as required, for as long as it took. Even though Microsofties are very pleasant to deal with on an individual basis, the company as a whole is predatory. They believe it’s their birthright to sell every last line of software code in the world. I believe that this aggressive corporate culture is a big part of the foundation that Microsoft is built upon. It has let them survive and thrive since the infancy of the PC until today—alive and well for the fight with the latest pretender to their throne—Google. But more on Google later.

We’ve examined a couple of long time winners—now let’s look at one of those classic shooting stars—Netscape.

Formula for Losing

It looked like the next big thing—the Microsoft if the Internet Age. They were to be the successor to the throne. They were the darlings of High Tech, and Microsoft was shaking in its boots. It was one of those times where Bill, Steve and the Microsoft gang got caught napping a bit. They didn’t see the Tsunami of the Internet coming at them—until it was almost too late. But the boys from Redmond recovered in time, and put all hands on deck until they finally smothered the upstart Netscape. So what happened to Netscape?

Well, in large part, Microsoft happened to Netscape. Microsoft put together a Herculean effort to change their company to compete in the Internet Age. But they stumbled a bit a first, giving Netscape some breathing room. Early versions of Internet Explorer, like some much software out of Microsoft, were not very good. They were almost laughable, to be frank. But Microsoft is the Terminator of the software business. It just keeps throwing people and money at the problem, and version after version comes out until they get it right. Unfortunately, Netscape had never built a solid foundation to combat this onslaught, in my opinion. The browser was what they were about. But an early decision to use the browser as the “razor” in that classic razor/blades marketing strategy, turned ultimately into a flaw. Intending to make their money on Servers, I feel that they neglected to keep the Navigator Browser as the market leader. It was a tough battle, with Microsoft bundling IE into the OS. But they needed to find a way, through innovation, to keep Navigator in the forefront of the browser wars. It was a tough task—no doubt. But once that browser franchise began to erode, their reason for existence began to fade away. It was really their foundation—which began to crack when it wasn’t built to last. The other mistake, which compounded their plight, was fighting a multi-front war with Microsoft—much like Hitler in WWII. They didn’t have the corporate infrastructure or resources, but chose to compete head to head in every market Microsoft was in. Novell made the same mistake, both companies buying some second-rate competitors to Microsoft, just to get in the game. Instead, they should have focused their resources where they had a lead, and a chance to win—Netscape in Browsers, Novell in Networking. History tells us that the upstart must focus and win decisively in that first battlefield, before they move on. Or they almost certainly will be crushed.

How Will Google Do?

Which brings us back to Google. They are the current technology darling and high flier, next big thing, and the latest threat to Microsoft. Once again, Microsoft is treating this threat as real. Right now, we’re at that stage where it appears Google is winning. But I remember when Novell and Netscape were, too. It didn’t last. And I see some parallels emerging—Google is diversifying rapidly, even recently making noises about competing with Microsoft in office software. That would be a huge blunder, in my opinion. Eric Schmidt, the CEO of Google, is a veteran of mammoth battles with Microsoft from his time at both Sun and Novell. It will be interesting to see what he has learned from the past.

What do you think—is Google the next Microsoft, or will they end up as a footnote like Novell or Netscape? Post a comment and tell me what will happen—and why.

Phil Morettini
PJM Consulting
http://www.pjmconsult.com/