Steve Blank

A few months into my tenure as the VP of Marketing, we now understood who our customers were.  We had thought really hard about “market type” and decided to reposition the company from a technology provider to a solutions provider. Now we needed to put the tactical programs in place to make this repositioning strategy happen. 74HGZA3MZ6SV

Just as an aside, over my career I must have interviewed scores of business school graduates (some from the very fine universities where I now teach) who would say, “I want to do strategy.”  Well yes, I understand that, but this is a startup, what else do you want to do?  “I just want to do strategy.”  Those were very short interviews.  The “strategy” of learning who SuperMac’s customers were, what solutions they needed and what our repositioning would be was a three month effort.

The tactical execution took three years.

Note, if you want to do “strategy” (which is a fine endeavor) and nothing else, you have just defined your career as one in large corporation or in a consulting firm.  Stay out of startups.  Tactics mean tenacious and relentless execution measured in years.

Metrics – Mine is Bigger Than Yours

The first thing SuperMac needed to do was to change how our potential color desktop publishing customers viewed our products versus our competitors’ products.  Over the years marketers have found that using numbers to compare yourself to other products works well.  We’ve all seen ads that say, “Now 30% more” or “Marked down 50%” or “5 times faster.”  As hokey as it is, when confronted with uncertainty or unknowns, human beings like to be reassured by comparative metrics.  But hardware metrics typically focused on raw speed and performance.  The key insight we had was that it wasn’t about raw speed − it was the speed of the applications that customers were using to get their work done.

Believe it or not, until that moment, there were no commonly agreed upon ways to measure the performance of graphics boards on real world applications.

So I was going to give our customers metrics neither they or anyone else had ever seen before.

First, by talking about solutions rather than hardware, we changed the way customers thought about graphics boards.  Now we were going to change the metrics that customers and the press used to evaluate product performance.

Objects in Our Mirror are Larger than they Appear

Our first goal was to set up benchmarks to measure the performance of our own graphics boards on the real applications our customers used (Photoshop, Quark, Illustrator and PageMaker.)  Then we were going to buy our competitors’ boards (think “secret shopper”) and compare them to ours.

Since no benchmarks existed, we enlisted our engineering department in a serious software development effort and wrote our own.  And we made sure that instead of some artificial numbers, the benchmarks truly measured performance on these four key applications our customers told us were important.  Then we ran the same benchmarks against our competitors’ boards.  When we found a subset of the tests on which we did worse than our competition, we … hmm, somehow that never happened.  The numbers were in.  We won.  Overwhelmingly. (What a surprise.) Any customer who used the four critical color publishing applications was going to be blown away by how much better the SuperMac boards were.

Finally, since no one would believe a set of benchmarks named after our company, we needed a façade of independence, so we named them after the street the company was headquartered on in Sunnyvale California – they became known as the Potrero Benchmarks.

Tell Me How to Find You

But having benchmarks in hand that showed us as the winner did us no good unless all our potential customers could see them.  Our first thought was to spread the news ourselves, perhaps in a press release or a “white paper,” (remember this was pre-Internet.)  But upon reflection I remembered that in our interviews with our existing customers they had told us how to get the news to them.  That told us which publications they relied on for news about graphics boards: the three publications that mattered, MacWorld, MacUser and MacWeek became marketing’s highest priority.  Inside the covers of these publications our customers had said that it was the product reviews that most influenced their buying decisions.  That by itself was a sobering challenge since our company had never come in first in any of the previous 14 reviews of graphics products that had been written to date.

Now this is worth stopping and thinking about for a second. We figured out how to reach our customers (through these three publications) because they told us how to do so. We figured out what was the most important criteria they used to evaluate which board to buy – product reviews – again because they told us how to do so.  These were two of the questions I had asked on purpose when we first did the initial customer surveys. Some of my staff had believed we were gathering extraneous customer data.  “Hey, we can make these surveys shorter.  We don’t need to know all this stuff.”  Yes you do.  You need to know the day-in-the-life of the customer.  From top to bottom. If you’re constantly correlating data and searching for patterns, all intelligence if properly integrated will give you insight.

The Chase

Then we began an educational blitz of these three critical publications.  We set up a series of meetings with the editor-in chiefs and the key writers who reviewed graphics products.  We had one story to tell and surprisingly it wasn’t about our company or our product.  It was an educational mission to tell the story of who our customers were (and by inference who all the graphics board customers were) and why the current reviews of these graphics boards weren’t adequately measuring what was important to this large market.

(Now as VP of Marketing, I could have sat back and let my PR agency handle the press.  Theoretically, that’s why I hired them.  But these meetings were life and death in our struggle for market share.  You don’t delegate life and death. The head of the PR agency agreed that we would work together as a team.  We both met often and went to all of the press meetings together.)

Why did we believe that these magazines would care?  At the time desktop publishing was one of the mainstays of the Macintosh market, and therefore the readership of these magazines reflected the demographics of the Mac.  For these magazines to find out that they didn’t truly understand what their customers cared about got their full attention.

I knew with a high probability before the meeting started what the end of the meeting would be like since there was no other way to go.  My staff didn’t believe it when I told them it would happen this way, but in meetings with all three magazines they said, “Ok, you convinced us these four applications are critical for the color publishing market, but how can we measure the performance of these applications?”

The Trojan Horse

“Well…” I said hesitantly, “I’m not sure we should share this with you but we have a set of benchmarks that we use to measure performance….” You can imagine the rest of the conversation; my sounding reluctant to let our own tests outside our building, the magazines begging us to let them have them, and finally a deal gets struck where we let the benchmarks out to the test labs of these magazines under their own name “The Potrero Benchmark Suite” without attribution to us.

Our benchmark had just become the standard test suite for all magazine reviews that our potential customers would read.  Our benchmarks, which were tuned for our boards, had just become the standard test suite for all our competitors’ graphics boards.

Relentless Execution

Once the education and benchmarks were in place, we then worked with each magazine writer as their product review deadline approached.  We provided customer references and testimonials supporting the key features we were promoting.  Focused on winning these reviews, I left nothing to chance.  My rule was no magazine could review our boards without us present.  The magazines’ rules were that no company could be in their labs when they reviewed the boards.  So we would always wait to the last minute to provide our boards for testing and then “forget” to ship the cables to connect the board to a computer monitor.  When the panicked manager of the magazine test lab would call under a last minute deadline, we would apologize profusely as we sent the cables over – with beer, pizza, and our product manager to help them through any testing “issues”.

My PR agency, my head of marketing communications and I set up a wall-sized chart (in my office where I had to close my eyes not to see it) of the editorial calendars of these publications. We listed the editors, writers, what they had previously had written, deadlines, what the competitive products were, how our benchmarks stacked up, what “upgrades” our boards needed from engineering to win, etc.  This was upfront and center for anyone who walked into my office could see what I thought was important.

In parallel, we educated the rest of our own company how essential winning these product reviews were to our customer and our financial success. What used to be an exercise in teeth-pulling frustration to get help from our own manufacturing or engineering departments turned into a well-oiled process as everyone stopped what they were doing to help us win.

None of this was an accident.  It was all part of a strategy.  But its successful execution would take a focused set of tactics and a great group of marketers working with me.  And I now had both.

From a company that never won a benchmark review with its graphics boards, we want on to win twenty-one of them in a row.  It was two and a half years before our competitors even realized that the Potrero benchmarks and SuperMac having its building on Potrero Street had any connection.

By then it was too late.

Our market share was starting to climb.

And we were just getting started.

What did I learn so far?
• Strategy points you to the goal
• Relentless tactical execution gets you to the goal
• Keep the tactics simple and focused
• Tactical execution needs to be managed at the highest level – you can’t delegate success in a startup

Filed under: Customer Development, Marketing, SuperMac | Tagged: Steve Blank | 8 Comments »

After my first month we knew a lot, we knew more about our customers than anyone in the company.  In this one month we had learned more about desktop publishing on the Mac than any one of our competitors.  Now the question was what to do with it.  First I need to make sure what we really learned was information we could base a company strategy on. 74HGZA3MZ6SV

Our first question was, did the total number of customers that had already bought products from our competitors and us represent a saturated market or the tip of the iceberg?  In other words what was the Total Available Market (TAM) and how much of the market had been already served?  Since our competitors were also small privately held companies, none of their data was readily available.

But we knew something they didn’t; the total available market for color graphics boards was measurable by looking at an adjacent market, the color desktop publishing software market.  As it happened there were quite a few industry analysts following software companies like Adobe, Aldus, and Quark, who happened to be the suppliers of the four key applications our customers said they used.  These analysts not only told us that the market had plenty of room to grow, they took an interest in us, since we were going to be a hardware company going after this growing market.

Since I was heading a marketing department, not acting as an individual contributor, I needed to teach all of marketing the importance of customer data.  First, I presented what I had learned.  You could sense the skepticism in my staff meeting as I described what I found.  But no one was prepared when I said, “These facts are now old, but since we are going to be changing customer perceptions we need to get new customer data weekly.  All of you are now part of the customer discovery collection team.”  Then I handed out the questionnaire to all of marketing and made two customer calls a week mandatory for everyone, including my secretary.  At first people couldn’t believe they were actually going to have to call a customer.  Some took cajoling to make the calls, other took me sitting by their elbow, but eventually everyone started dialing.  The first part of my weekly department staff meeting was dedicated to hearing everyone going around the room and talking about their customers.

Within a month the change inside the marketing department was palpable.  Customers were no longer some theoretical entities that existed only in data sheets, they were real people you talked to, understood, and connected with.  Soon marketing was talking about the needs of our customers with first-hand knowledge, passion, and conviction.  And without knowing it, the quality of marketing department’s work changed.  Instead of spec’s and technical features, our literature and interaction with customers shifted to how we could solve their problems.

Within a year we had called over 1,000 customers, and every year after that another 1,000.  Marketing, which had been unsure or unaware of what their jobs, were now had weekly reinforcement of who they were selling to and became a formidable force in the Macintosh graphics market.

Now we could execute a relentless come-from-behind strategy off of the information we had learned and discovered from our customers.  Now what was the strategy?

What did I learn so far?

• Facts are the rock on which you build your strategy and tactics
• In a startup second-hand facts are almost as useless as opinions.  Decision makers need to hear the facts first hand

Listen to the podcast here
Download the podcast here

Filed under: Customer Development, Marketing, SuperMac | Tagged: Steve Blank | 12 Comments »