Report: State of Community Management

The Community Roundtable, founded in 2009 by Jim Storer and Rachel Happe, has deep expertise in advancing the business of community. This week The Community Roundtable has released the 2014 State of Community Management report, with three key findings:

1. Community maturity delivers business value.
2. Advocacy programs increase engagement.
3. Executive participation impacts success.

To download the full report, click here.

Startup Hacks: 10 Ways to Increase Your Startup's Valuation When Pitching VCs

Being on either the pitching or receiving end of over 200 venture capital presentations has left me examples of a long list of things that do not work. Unfortunately however, rarely do I get asked what does not work, more frequently I get asked what works.

And precisely, I get asked, what works in supporting valuations. Thank you to all those who have pitched me, or listened to me pitch enabling the 10 items below.
 

1. Have a killer brand and image before you pitch -- investors know that commerce happens because of influence, influence is the currency of customers making a decision to buy. A good brand and a killer visual identity help investors "see the cognitive leap" customers will take to drive sales. I learned this from Chris Walsh in 2001.
    
2. Do not overstate your total addressable market (TAM) -- overstating TAM is the easiest way to say to an investor, "I barely know anything about how businesses work, and will not spend your capital wisely." Pick a TAM that you can nail, and show an evolution to an increasing TAM, this way your valuation is solid and difficult to negotiate down, instead of inflated and a target for negotiation.
    
3. Have a well-documented sales process in your pitch -- most investors ran businesses before and know that no matter what you build customers will not come rushing to your doors. You must demonstrate a well thought out sales process, one that shows you already understand customer's objections, resistance to your value proposition, and a commitment to making customers satisfied.
    
4. Know where you are on the hype cycles -- nothing says to an investor "invest in me the founder" like a founder demonstrating deep and immersive understanding of their invention on the Gartner Hype Cycle, and an appreciation for how adoption of their invention will perform under the lenses of the theory of diffusion of innovation.
    
5. Show that you prioritize with a focus -- while cash is king, focus is queen (thank you for teaching me this). Investors want to know that you will prioritize a client meeting over an investor meeting, or you will prioritize a partner/reseller meeting over a press opportunity. Don't chase the shiny objects, show focus and investors will believe in your value.
    
6. Leave the CEO role open -- investors value companies that will grow to be successful over companies that have great ideas but may never get out of the gates. When an investor sees the CEO role open and vacant, they know that the founders will be willing to bring in talent to "grow the business" and hence they respect the valuation. If the CEO seat is filled, investors see a "battle ahead" of replacing the CEO, which says "RISK" and the default reaction is to negotiate the value of the company down to reflect the risk of the "battle ahead". This lesson came from Atul Chowdhry recently.
    
7. Have a list of "BTDT" advisers -- I learned the phrase BTDT from the Irish Angels, a VC group in South Bend Indiana associated with Notre Dame in 2002. Been There, Done That; investors want to see advisers that have built successful companies before on your advisory board. Pick them wisely.
    
8. Get more than press relations -- Companies succeed because influential people want them to. Show investors that influencers and analysts (this is your influencer relations and analyst relations) believe in our concept enough to write about it, and hence you have "IR and AR" credibility. PR, is not the same as IR and AR.
    
9. Plan for pivots -- the best businesses in the word learn to pivot as a part of the plan. Investors want to invest in companies that will "pivot into the opportunity" instead of staying the course on ego. You pitch should show to investors that you have thought through alternative pivots, and... you are willing to spend their money wisely on opportunistic pivots over staying the course of your ego. This lesson came from Ray Wang, one of the best in advising pivots.
    
10. React like a pro -- the last thing that helps your valuation is the way you react when an investor says "I think your valuation is too high." Don't defend your valuation, and for heaven's sake don't ask them why they think so; just keep a poker face and wait in silence. You will know the numbers better than any investor being pitched, let them voluntarily go down the dangerous road of trying to poke holes into your valuation. You have the upper hand in this debate because if your immersion in the numbers; don't give that away by speaking first.

Go raise money, and don't sabotage your valuation by not thinking through the 10 items above.

-- Richie

Musings - What is the future of recruiting?

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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With one of the leading recruiting conferences starting this week, it was time to spend some thought cycles on the future of recruiting. And the purpose of this blog post is purposefully slanted in the direction of provoking some new thoughts on the subject – more than nailing what will happen in 2015 or even easier what is today’s state of the industry.


 

If you step away for a moment from the rush of multiple releases per year and look over the last decades on what has happened in enterprise applications overall, a major trend becomes pretty clear: 

Transitioning Your Marketing and Customer Experience Strategies to Digital Webinar Recording

"Marketing is the first line of customer engagement." What does that even mean? Watch this webinar to find out.

It's no secret that the proliferation of digital consumer and enterprise technology is driving dramatic disruption of traditional business models. Roles are changing, responsibilities are changing, and expectations are changing. Position yourself and your organization to take advantage of these technology-driven paradigm shifts.  

Speakers:

• R "Ray" Wang
• Paul Greenberg
• Natalie Petouhoff
• Peter Kim

Transitioning Your Marketing and Customer Experience Strategies to Digital

Discussed in this webinar:

• digital is disrupting traditional customer experience and marketing
• customer departments and marketing are becoming more interconnected--we discuss the changes your organization needs to make now
• how revelations at Adobe Summit 2014 impact customer experience, digital marketing, and matrix commerce
• lightning round: how Adobe's positioning will affect CX and marketing

Digital Transformation advice from our speakers:

Video: Interview at SAP CRM 2014

12 minutes of me talking about marketing, data, analytics and customer relationship management.

Site Visit - ADP's new Innovation Lab in Chelsea

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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So when you are – rightly or wrongly – perceived as a vendor that struggles with innovation – what do you do? A proven page from the corporate strategy playbook is to open up an innovation center or a lab in places of high innovation density. Silicon Valley used to be the location, but increasingly vendors chose the up and coming Manhattan area, that is popular with young professionals and offers a wide mix of previous employer background.

So ADP decided to do the same, picked a historic landmark building, rented first one then two floors (as hiring was revised up) and is now tackling the challenges of New York real estate development. But that does not faze the current 80+ employees working on the new ADP user experience.

So here are a few of the most notable takeaways from my visit:

• Deciding to have an innovation lab is easy – funding it when you are ADP is, too – but then how to design and divide the space is a creative challenge. Good to see ADP partnered with proven architect bureau Gensler, and even better to see that ADP challenged them to create something special, even for them.
   
• There is a strong emphasis in the floor layout to not only collaborate, but get work done as an individual. Many innovation labs cater primarily to foster collaboration, ADP is also expecting employees to be able to perform significant quiet tasks. And that is maybe needed as ADP plans to collocate not only the creative employees, but also those who will have to do the actual coding of the new technologies.
   
• Obviously ADP will use the center to host clients and prospects so one floor offers a multi-functional area, that can host up to 150 attendees, but if not used can be transformed in smaller workgroup areas. And in a common move of innovation centers, ADP also plans to become part of the New York creative community, hosting various community meetings and gatherings. Not only the meeting area but also the planned roof area will make ADP’s innovation center a popular location for events of this nature.
   
• It was nice to see that ADP will conserve the nature of the 130+ year old building, preserving as much as possible of the original wall structure to the original wooden floors. High tech meets late 19th century.


• And ADP is already doing productive work at the center. We had the chance to see some usability testing being done on the new Benefits layout that was presented at Meeting of the Minds last week. And while already a very good user interface, it is good to see that ADP is not resting on its laurels and continuously working on further improving the design. We also had the chance to see some UI design work being done around the Pay Lens, centered around bringing the paycheck to life. And lastly we saw work in the employee profile area, a key asset of any HCM system, as being one of the most frequented properties in the overall user interface. 

• As a testament to the rich talent pool New York offers, ADP recruited usability experts with such diverse backgrounds as advertising agencies, consumer devices, defense and financial services.

 

Not a garage in Palo Alto - but an equal sotto voce start in Chelsea

 

Finally it was good to see that ADP has developed its own design methodology for its usability projects, and is using all the proven best practices of recent user experience design. So the very attractive new user interface is no coincidence, but the result of method based hard work. The good news for ADP customers – it looks like a repeatable process, so more good work should be coming down the product innovation pipeline.

Data-Driven Marketing Campaign Optimization

Vice President and Principal Analyst, Constellation Research
Constellation Research

Role: Vice President and Principal Analyst focusing on the IOT of Customer Experience and how the cloud is driving more flexible, agile, and robust customer service and customer experiences. In-app or in device customer service is the future. Coverage Areas: Next Generation Customer, Digital Marketing Transformation Bio: As a Vice President and Principal Analyst at Constellation Research, Inc, Petouhoff works with Fortune 100 and 500’s Senior Leadership teams to create strategic customer experience (marketing, sales and service) solutions which engage customers, build brands and grow businesses. Combining her experience as a former Forrester software analyst, PWC systems integrator and change management consultant, Petouhoff leads executive workshops to discuss to not only…...

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My report is about how CMOs can use big data and analytics to transform marketing decision-making and advance corporate innovation by using big data to optimize your marketing efforts.  The way I went about writing this report was I interviewed both vendors and CMOs to understand where the marketplace is with respect to actually using marketing automation software / platforms.

There is a lot of software that delivers on the promise, unlike 25 years ago when CRM- Marketing, Sales and Customer Service vendors (either point or suites) had the right ideas and desire to provide this type of business impact, but the software really wasn’t not as advanced as the marketing brochureware (sales pitch and slides) was.

In addition, from working with CMOs when I was in the agency world and throughout my career, the story has been very similar. Software has the potential to create and drive revenue when it’s attached to the right strategy. Technology without the right strategy just means we do more of the wrong things faster. That’s not such a good idea, though it happens every day.

Level Self-Identification Leads to Marketing Transformation

You can’t change what you “don’t know, you don’t know.” In the report, I provide a picture for Marketers so that they can self identify where they are in the various levels of using marketing automation and then to identify what they’d like to be doing. In consulting or advisory work, this is often known as a “gap analysis.” It helps people see the present as well as the possible future state.

What we found in the research is that many Marketers learned that the way they were using marketing automation software as at Level 1 &2. They do not realize there’s more they could do. Others found that they have not chosen software that help them advance their Marketing capabilities to Levels 3, 4, and 5. In the report, I describe some ideas on what those other levels are and what it might look like.

The Five Levels Seek To Drive Marketers To Become Chief Intelligence And Revenue Officers

In theory, let’s say that Marketing really drove revenue in your company. The idea I’m really aiming for in this report is to provoke CMOs and Marketers to think about becoming chief intelligence and revenue officers.

When they are able to show that they can repeatedly and consistently contribute to bottom-line, the senior leadership team will give them respect they want. Long gone will be the days of suffering from what I lovingly call the “Rodney Dangerfield Affect” – i.e., the day of “they just don’t get enough respect” won’t exist anymore. And that would only be a good thing.

Because Marketing software has changed over the last 25 years and can deliver on may more of the promises it aspired to, Marketers must also change. But there is a gap in the talent pool of CMO’s and Marketers that understand how to use marketing automation and customer experience platforms to get to Level 4 and Level 5 activity (see the report). And that’s what I really want to see happen and why I wrote the report. It’s time that we use all this big data revolution and new technology and transform old roles into new roles where respect for the contribution is earned and acknowledged.

 What This Means to You

What may not be obvious is the “so what?” What does this mean to you? Here’s some brain candy to think about, As a CMO or Marketer, you need to:

• Understand how marketing automation platforms have transformed and how big data plays a larger part in today’s CMO role
• Know where your personal skill level are as well as those of people in your organization
• Be able to pick technology that can provide these more advanced capabilities; often times buying technology was the role of IT, now CMOs are responsible for this
• Understand requirements definition documents, capability lists (features and functions), business case justification along with bottom-line benefits — when it comes to choosing technology
• Fill the skill sets in your organization so that you are able to truly justify to your senior leadership team why you want a larger budget and new technology.

I don’t think you can wait to do this. I think it will only going to get worse, not easier to pick the right technology for today’s CMO and Marketer. Make sure you are prepared by educating yourself on your options and learn how to choose technology so that you can show your contribution to the bottom-line.

I’d love to hear from some folks who have mastered some or all of :choosing technology and business justification capabilities”— how you did it! You never know, you might become part of my disruptive case studies library!

@DrNatalie

How Companies are Building the Green Internet: GreenPeace Report

Vice President and Principal Analyst, Constellation Research
Constellation Research

Role: Vice President and Principal Analyst focusing on the IOT of Customer Experience and how the cloud is driving more flexible, agile, and robust customer service and customer experiences. In-app or in device customer service is the future. Coverage Areas: Next Generation Customer, Digital Marketing Transformation Bio: As a Vice President and Principal Analyst at Constellation Research, Inc, Petouhoff works with Fortune 100 and 500’s Senior Leadership teams to create strategic customer experience (marketing, sales and service) solutions which engage customers, build brands and grow businesses. Combining her experience as a former Forrester software analyst, PWC systems integrator and change management consultant, Petouhoff leads executive workshops to discuss to not only…...

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The GreenPeace Report puts technology companies into groups of energy use: Dirty Energy, Middle Of The Road and Green Innovators. As an analyst, we talk a lot about the newest types of software, computers and gadgets of which need energy to run. And there is real resurgence of entrepreneurial spirit, where people are looking to feel satisfaction from the work they do and make the world a better place, rather than just tolerating brain-numbing work for the sake a of paycheck, only to find enjoy somewhere else. With all the enthusiasm also comes a great deal of energy use that we may or may not be aware of.

According to the Kaufman Index of Entrepreneurial Activity (KIEA), the entrepreneurial rate in the U.S. is already well above the dot.com bubble of 15 years ago. From social media to music, streaming video, email and commerce, we are increasingly moving much of our lives online. But which companies are storing all of that data, and how are they getting the energy? Here’s who hosts some of the internet’s most popular sites and services in their data centers – and whether those companies are using dirty or clean energy. Find out how you can participate by following the hashtags #clickclean and download the full report and take action for a green internet.

Three Types of Energy As the expansion of technology is continuously accelerating, we are also creating a world where more and more energy is be required. There’s a term called Dirty Energy, which means the focus is only on efficiency and the company has taken few or no steps to switch to renewables. And the there’s the Middle of the Road, which are the companies that are taking steps toward a greener internet, buy not leading the way. And then Green Internet Innovators are the groups that are committed to 100% renewable energy. Their leadership is helping to make our lives, online and offline, greener.

Clicking Clean How Companies are Building The Green Internet

The Green Internet Innovators Here’s one of the companies that is on the side of the green internet innovators.  Apple’s aggressive pursuit of its commitment to power the iCloud with 100% renewable energy has given the company the inside track among the IT sector’s leaders in building a green Internet. Apple has made good on its pledge by building the largest privately owned solar farms at its North Carolina data center, working with its utility in Nevada to power its upcoming data center there with solar and geothermal energy, and purchasing wind energy for its Oregon and California data centers. Apple’s commitment to renewable energy has helped set a new bar for the industry, illustrating in very concrete terms that a 100% renewable internet is within its reach, and providing several models of intervention for other companies that want to build a sustainable Internet. Download the full report. (Full disclosure: I have a relative that works at Apple.)

Apple Energy Source 2013

How Facebook Uses Energy    Facebook continues to grow and dominate the global social media landscape with 1.23 billion monthly active users. Facebook has made huge strides forward since 2012 to become one of the clear green internet leaders. Radical improvements in transparency and efforts to deliver significant wind energy investment in Iowa have helped drive Facebook into the top tier of companies creating the green internet. By building on the advocacy it has started with energy utilities to drive more clean energy investment, and continuing to find ways to bring renewable energy to scale to power its data centers in North Carolina and Iowa, Facebook is setting a clear bar for other major social media networks and internet companies to follow.

How Facebook Uses Energy

How Google Uses Energy Google has continued to lead the major internet brands in purchasing renewable energy at scale to power its massive online ecosystem. The company is now reporting electricity consumption of 3,315 GWh, with 34% of its operations powered by clean energy. Google’s use of power purchase agreements to procure clean energy has been adopted by others in the sector, like Microsoft, and it has successfully influenced utilities in Oklahoma and North Carolina to offer new renewable energy options by using its immense business clout. As Google expands its footprint to Latin America and Asia, it will need to maintain its innovative edge to make sure that it continues to source clean energy even in countries that feature dirty electric grids.

Google Energy Sources 2013

Twitter falls between the types of companies that are clearly innovating in their use of energy sources and those that fall into the dirty energy collection. Twitter’s has changed the way people around the world communicate. Twitter does not yet own any data centers of its own, instead renting data center space from others. The microblogging platform has remained silent about the type and amount of electricity that is powering those data centers. Twitter remains at the bottom of the industry for energy transparency, disclosing no information about its energy footprint. Twitter lags behind its competitors in social media, Facebook, which took significant steps to increase transparency and increase its use of clean energy soon after it went public.

And on the side of the spectrum are copies that fall into the Stuck in dirty energy past ways of providing and using energy. One example is Digital Realty Trust (DRT)  which is the largest digital landlord in the world, with 131 data centers worldwide, roughly three-fourths of which are located in the US. Digital Realty operates on the wholesale end of the colocation spectrum, providing both entire data center properties to large customers like Equinix and Amazon Web Services, and also renting portions of facilities to meet the needs of large online properties such as Facebook, Rackspace, Salesforce, Google, Microsoft and Yahoo.

So the question really is – as we build all this technology, are we really making the world a better place? We need / want technology to scale. But at what cost? CEO’s need to consider not only their new innovations in products and services, but also how they are leaving the environment. Are they leaving it in a better or worse state and at the end of the day, what’s the cost in the long run to these decisions.

@DrNatalie