Quovis Consulting

Funding Development and Driving Demand

Speedier Data Analytics is Not a Panacea

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Flash memory is rapidly moving into the data center market as was recently reported in BusinessWeek. Now that it is possible to collect more data, more analyses can be performed. In a continuously changing world, it means the data is continuously changing as well. And we can’t be looking at the same data forever, because it is sure to become stale and lose its value. So companies are anxious to process that data faster. And so we are seeing quite a rapid migration of flash memory into data centers, in order to serve up that data faster.

The Hadoop platform has brought distributed computing power for faster number crunching with all of the parallel cores being put to work. And CDNs have enabled providers to minimize the number of network hops that data streams have to travel through in order to serve up web pages with minimal latency. But now we have bottlenecks that may be arising just in pulling large data sets off those spinning disks. So there is a move to Flash memory, despite the premium price.

This really underscores how markets are working today. We need data to support operational decisions. But that data is changing. So we need to make our calculations on what happened and measure what changes we are seeing. It is always about trying to understand, “Why is this happening” and “How should we respond”. If the context of what is happening can be isolated, our understanding will improve. So whether you need to make decisions about: inventory management, production orders, sales support staff, product mix, sales promotions, geographic hot pots, or correlate results to outside events, you need to analyze the data to understand.

But, are you a scientist or engineer? This is about the mindset you bring to how you go about identifying, gathering and acting on data. Following the science path, you may indeed end up with an insatiable desire for data. And you clearly don’t want to end up in a state of paralysis-by-analysis. You really need to follow an engineering approach, where you need to build a process that is good enough, and can give you actionable information. Approximations and assumptions are what make this possible.

One thing that history has taught us is that it is all about adapting to change. Those who adapt successfully will be those who are in a position to prosper. The absolute key here is that you acknowledge the need to analyze the results and changes that are happening in your business. It is then vital to determine the measures that matter to your business, and act on them.

But, no data set is perfect. And, no model is perfect. You can continue to arm yourself with more data and more data analytics tools. But you need to assess to what extent you are improving. Just as the high frequency trading industry is coming to understand, front running will only get you so far. At some point, you have to revisit how you are creating value in your business, and whether you are still doing the right things. Just digesting data faster is not a panacea.

“Lolly Wolly Doodle”

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As playful as this phrase sounds, it is the name of a company. And it is anything but fun and games when you listen to Lolly Wolly Doodle’s story. Lolly Wolly Doodle is an e-commerce business that offers customizable children’s clothing on-demand. But the real story is now what they do, but how they do it. It makes for a great case study on both business model development and demand generation model creation. Inc. Magazine recently provided a full history and profile on the company and its founder, where you can enjoy the serendipity of how it all came together.  It will no doubt leave you cheering.

Figuring out your business model and figuring out your demand generation model have a key commonality. In both cases, you don’t know what is going to work until you actually do it. In the case of the Lolly Wolly Doodle’s demand generation model, it uses Facebook to gauge the real demand for new styles. And then scales up its efforts around the popular designs.

The great irony of the situation is that the company had only sold its ware on eBay while working out of the home garage. But faced with a batch of dresses that were subpar in quality, and not wanting negative feedback on eBay, the dresses needed to be offered at clearance pricing through a different channel. So they were offered up to a small lot of Facebook fans (153 of them in total) who had signed up at local Junior League events. Amazingly, the dresses sold out within minutes. The channel was then tested again with various designs that could be made to order, and the pace of sales continued. This was not a fluke. Within a couple of months, eBay was no longer a channel.

From a demand generation perspective, the eBay channel was doing just fine. The reputation was deemed the key metric, and the entrepreneur only turned to an alternate channel so as not to damage this reputation. But that alternate channel, Facebook, even with a small number of fans, leveraged itself by the sharing effect that occurred. And this is what moved Lolly Wolly Doodle to the next level. It had inadvertently found a way to match its products in the ideal context, the Facebook News Feed. This became like Tupperware parties on steroids. I can’t get over the irony of how it occurred. But the fact of the matter is that finding the right channel, where the context matches your offering, and people will give up their attention span, is the real nirvana of a demand generation model.

From a business model perspective, the company had effectively hit the fashion industry where it was weakest. It found a way to offer customizable children’s clothing on-demand. Whereas, the fashion business is all tied to high volumes, with lags in the ability to adjust to changing preferences. Again, the company’s on-demand model, the supply-chain model, and the manufacturing model, all evolved from the roots of business. That is, don’t waste material, but find a way to repurpose it. And organize the production by the type of process (i.e. similar cuts, or similar sewing), rather than by specific garment batches. And it all evolved from the genuine need to do things efficiently, economically, and have fast turn-around, while not being stuck with conventional processes.

This story can serve to inspire us all. You need to experiment with your demand generation techniques in order to know how it really is going to turn out. And you need to look for ways to do business that may not have been considered. If your offering has a solid value proposition, getting that message out in the right context can be truly transformational.

“Our goal is to supply everything to rebuild civilization” – Amazon.

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Can you be all things to all people?

Conventional wisdom says “No”. But with AmazonSupply, there appears to be no adherence to conventional wisdom. AmazonSupply is Amazon’s foray into the B2B distribution marketplace. It serves as one of the more recent examples of Amazon using its logistics behemoth, along with troves of data, to change how things are done. Forbes has an excellent article providing full insight into all the key numbers which are sure to get your attention. But, it is not too hard to imagine that they will make more than a dent. Just take a look at the book distribution business, or where SaaS companies are hosting.

There is no question that the quoted statement is brash, and their ambitions are as bold as they come. None-the-less, if you are in business, it should force you to re-think your own business model. Amazon is a great example of a company that is effectively using technology to transform how things are done. So it is best that you not get too cozy in your current position. Unless you own the customer, you do not have a lock on the future.

Think about one of Steve Balmer’s famous quotes in 2007: “There is no chance that the iPhone is going to get any significant market share”. We all know how helpful that mindset turned out. I would much rather think along the lines of the former Intel CEO, Andy Grove, and his mindset and the title of his book “Only the Paranoid Survive”.

So when it comes to your business, what should you be doing? Where is your next pivot point? Or is it time for a transformation? The key underpinning technologies that seem to touch everything are: widespread wireless connectivity, increasingly fast data networks, increasing portable computing power, and increasing information sharing. There is no question that they will touch your business as well. Either in how you operate your business, how you serve your customer.

We are not in the age of maintaining the status quo. This is an age where new technology is giving rise to new business models on a continual basis. No time to sit idly by, or just be following the Kaizen principles of continuous improvement. It is not enough to just be going to the next level.  It is much more an era where you need to be exploring which innovations to adopt, or which customer behaviors you need to adapt to.

Where to start? You need to give yourself a report card. How good of a job are you doing in solving your customer’s problem? And how can you do this differently? You can be sure that there are others out there who are giving these questions a lot of thought. Get inspired by the growth of new technologies and harness them to introduce your own innovation and creativity. Change is good. Your customers will welcome fresh perspectives and they will become better customers. Don’t allow the Amazon to wash over you.