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Here’s the Web 2.0 business opportunity in a nutshell

larry — Tue, 08 Aug 2006 13:21:27 +0000

Do you wonder what all the Web 2.0 hype is?

Do you want to read an article that explains it in business terms, rather than technology terms?

Well honestly the technology is way more fun than the business view in this discussion, but it’s not that the business view isn’t cool. It’s just that it’s not nearly as different as the tech.

Paul Graham totally demystifies this topic in his excellent article on his website. He has a real gift for writing about technology. For months I’ve been trying to figure out how to explain the business opportunity to some folks, and he does it in one sentence.

If you can figure out a way to turn a billion dollar industry into a fifty million dollar industry, so much the better, if all fifty million go to you.

That’s pretty much all the business mind needs to know about Web 2.0. Obviously there’s much more about how to do that, but there you are.

I highly recommend you read the whole article.

What’s different about a custom application development projects, a primer for small businesses

larry — Fri, 04 Aug 2006 20:07:27 +0000

Last week I talked about how small businesses couldn’t afford to invest in technology projects that didn’t show immediate returns. I offered that 30 days is the outer limit of acceptable time to implementation.

So how does a small business get anything meaningful done within 30 days?

Automate a specific business activity that you already do and understand. Automate just that activity. This will help you get something that can show an immediate return for your business because it will have a clearly defined purpose. This may seem kind of hard to understand, or confusing. If it does it’s probably because we’re so used to buying packaged software, which is commonly referred to as “Commercial Off the Shelf Software”.

Naturally this becomes an acronym COTS because computer concepts seem to get acronyms quicker than, well, anything I can think of.

COTS is targeted to many customers in many different business environments. Most small businesses only have experience buying this kind of prepackaged software, and so really struggle with purchasing custom developed software. For many business applications COTS software is just fine because the costs of buying it and deploying it can be very low compared to custom application development.

Custom application development is completely different from buying software off the shelf and implementing it. In this post I’ll talk about the three biggest mistakes that small businesses make when they approach custom application development projects as if they were buying off the shelf software.

These three mistakes are based on approaching custom software developers with these questions:

We’re used to buying software from a catalog and making it work, why can’t we just treat this like that?
We can’t decide what features are really going to be useful so why don’t we just ask for everything and then see what we can afford?
Finally the biggest mistake everyone makes. We don’t want to spend alot of time on this internally so can you just build for us what everyone else in our business asks you to build so we can spend as little time on it as possible?

The three mistakes, expanded on

We’re used to buying software from a catalog and making it work, why can’t we just treat this like that?

If you pay custom application development prices to build a system that works and acts like an off the shelf solution, you will be paying for a lot more development than you need to automate a specific business process. Custom Application development is more expensive than off the shelf software precisely because it’s only used by the business that pays for it’s development. The problem with approaching custom application development shops with this question is that you are asking them to build you a custom solution as if it was an off the shelf product.

If you continually find yourself asking this question you might want to consider why you need custom application development at all. Most startups and small businesses do use off the shelf software for almost all their information management needs. It works fine because these businesses are trying to figure out what to do to become profitable enough to survive.

Eventually you will find that specific business processes just can’t be as effective as they should be without custom application development. You could come up with a metric and develop a measurement tool to figure out which processes are good candidates for custom application development, but most business managers can tell, just based on their own intuition, which processes would offer the most value if they were automated. This will occur when your off the shelf software starts to feel specific business process:

They will say things like:

We’re using (Insert COTS software here) and it’s working ok, but..:

We need something that works exactly the way our business works
We are getting it done now but it takes too long
We only have one person in the office that can get it to work

If you find yourself saying these things, you are well advised to getting a quote on custom software development for your business.

If you need more specific, measurable reasons to describe why those processes should be automated with custom application development, well consider your project important enough to track. That’s a good thing! Here’s how I translate the feelings above to business objectives that can be mapped to an overall strategy for the business.

We could automate this specific business processes with Off the Shelf software but we’d rather build our own solution, because custom software development:

will make it harder for our competitors to copy our automation, so it provides sustainable growth opportunities
will make it much more cost effective to optimize the business process to a large number of transactions
will lower the learning curve while allowing more people to participate in managing this process for both current and new employees

We can’t decide what features are really going to be useful so why don’t we just ask for everything and then see what we can afford?

Custom Developed Software is purpose built so it requires you to have a clearly defined purpose. Software developers can make computers do pretty much anything you want them to do. If they couldn’t, they wouldn’t be very good software developers. Asking your software development vendors to quote you “everything” produces confusion and delay.

We don’t want to spend a lot of time on this internally so can you just build for us what everyone else in our business asks you to build so we can spend as little time on it as possible?

This is the biggest mistake you can make. It’s also the most insidious which is why i’ve saved it for last. If you spend money on building a custom software solution that just does what everyone else in your business is doing.. you are spending money implementing automation that doesn’t make your business more effective than your competitors. In fact by not describing a specific process that is unique to your business, you are almost guaranteed to spend money making your business less effective than your competitors. I’m going to repeat that, becuase it bears repeating.

You are almost guaranteed to spend money making your business less effective than your competitors

Your competitors are not going to show you exactly how their internal processes complement and augment their offline processes if they represent a competitive advantage. Any automated system must complement and augment an offline business processes that exists in the configuration of the business. This relationship may be something structured and described, like a general policies and procedures manual. More likely it’s an oral tradition that is passed from experienced employees to new hires through training and business practice adjustments. Without knowing how the automated system and the configuration of the business match up, your chances of getting both sides of this right are extremely low. So low your probably going to waste all of your money if you just do it anyway.

If you can’t spend the time describing the whole process to your software development vendor, either in writing or during prototype and development status updates, you will, at a minimum, fail to create a growth opportunity. Make the commitment to do that, or don’t bother starting the project.

Agile Software Development and your small business

larry — Wed, 02 Aug 2006 18:16:26 +0000

Businesses are focused on a pretty discrete set of activities, based on their size

Startups and small businesses should focus all their efforts on finding new customers.
Medium Sized Businesses should focus their efforts on growing their organization by solving their cashflow challenges by streamlining their accounting and investing in growth for their most profitable lines of business (as indicated by their accounting)
Above medium size, investing in internal IT staff and infrastructure starts to make sense. This means that below 10M in annual revenue you have to execute your growth strategies while using outside consultants or vendors for your technology projects.

For the last two years I’ve been looking for ways to serve the needs of startups, small businesses, and even some medium sized businesses. I’ve been focusing on those businesses that are looking for technology, specifically web/internet based technology to provide a growth opportunity.

I’ve come to the following conclusions

If all you need is a simple web site. Don’t go out looking for a “web shop” that can implement a simple website, rather start blogging about your business. A simple online journal, that you regularly post to, will deliver both a simple website and provide you much, much more visibility than an online brochure ever could.
If you’re looking for technology to provide you a growth opportunity, you have to invest in creating something really unique and easy to explain. You should be able to easily describe your repeatable, profitable business process. If you can do that, then quantifying how much to invest in automating that process becomes very easy.
You must implement your solution and get it in front of it’s intended audience in no more than 30 days

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One simple thing to improve your requirements - Categorize your User Stories

larry — Thu, 04 May 2006 18:48:58 +0000

Managing a software projects is, to a large degree, about managing your requirements.

The one simple thing every project can benefit from in managing their requirements is understanding how to categorize your requirements.

I often see projects that have requirements at all sorts of different levels of detail mixed together. Often these different levels confuse the team because one high level requirement actually contains many lower level requirements, yet they are not explicitly associated together that way.

4 Categories of Requirements

I like to use the more agile User Stories approach to hold a project’s requirements but you substitute Use Cases if you prefer.

The 4 categories of Requirments are easiest to classify if you think of them in terms of altitude above the projects deliverables. I learned this technique from Alistair Cockburn’s excellent book Writing Effective Use Cases. They are Sky Level, Kite Level, Sea Level, Fish Level and in this entry I’ll introduce these catagories and give you an idea when to apply a category.

The 4 Categories Described

Why the Altitude Metaphor?

The more astute reader will notice that these categories relate very strongly to the familiar Goal, Strategy, Objective and Tactic approach to classifying work efforts. So why not just use those?

The short answer is simply, the Altitude Metaphor is less confusing and friendlier for the team. For example many people will discuss at length whether something is a Strategy or an Objective. These same people can very easily agree if a requirement is at Kite Level or Sea Level. These means they can get to work completing the project quicker.

1 Sky Level / 10,000 ft. view

This is usually one requirement and it is concerned with what the overall Goal of the project.

2 Kite Level

These requirements are concerned with the Strategies that will be used to achieve the Goal of the project.

Sea Level

These requirements are focused on the Objectives that must be met to succesfully complete the project. At this level you start to see user interactions with the system.

I like to think of these types of requirements as “Black Box�? user stories, so that it’s easy to remember that at this level we are not describing how the system will internally operate to complete the interaction. So the system is attributed the ability to do something but the requirement does not specifically call out the way the system does it.

Fish Level

These requirements are where you spend most of your time as a developer and a project manager. These requirements capture the detailed Tactics that will be used.

I like to think of this level as the “White Box�? user stories. Where at the Kite Level, we did not describe how the system operaties interally, here we must describe the systems internal operations.

Two major types of Requirements

One of the other things that is helpful at the Kite Level and below is to make sure you know when you are talking about Functional and Non-Functioanl requirements.

Functional Requirements

These are what you normally think about when you think about what you need to do build. The system does this, the system does that, kind of requirements.

Non-Functional Requirements

These are sometimes mixed in with the other requirements or not captured at all. They can be critically important for the success of a project and should be seperated from the Functional Requirements.

Non-Functional requirements are often called the �?ities�? as they most often relate to qualitative metrics like: security, usability, reliability etc.

Got API reference site a great utility!

larry — Thu, 27 Apr 2006 18:36:48 +0000

Good Technologists look things up so they can use their brains for the hard work. Got API? is there to help.

Every now and then I meet a technologist that can rattle off detailed arcane minutae relating to obscure JavaScript functions or obscure foundation classes in Java. I usually don’t think much of it. Most of the guys I’ve worked with that I would consider “top 10%ers” don’t memorize framework functions, they look them up when they need them.

Sure, while you are learning how to use them, you end up memorizing bunches of them. But after you’ve mastered them, you just figure out where to go to find the details when you need them and remember the higher level utility they provide so you know when you will need them. The problem with using API references all the time, at least for Web Application development, is you wind up using 4 or 5 different references and they all have their own cross references so it’s easy to go down a rabbit hole and get distracted from solving the problem that lead you into the reference to begin with. Books that collect these are great, but usually bit parts are out of date by the time they come off the press. GotAPI is great utility because it provides an easy “help interface” presentation of just about any Web Technologiy API reference all in one easy to use interface. And since I’m obviously in a “help” style inteface, I’m hoping that provides the gentle reminder to get back to the task at hand once I’ve found what I don’t need to waste brain cells remembering.

So far, I love it!

Sharing your marketing and communications plan with your technologists

larry — Wed, 19 Apr 2006 23:09:31 +0000

Lots of times I have customers share their marketing and communications plan with me. As I focus my work on using technology to create growth opportunities for my customers, this is pretty much expected. I need to understand what their marketing and communications efforts are saying.

I actually recommend doing this whenever your including technologists in a project that relates directly to marketing and communcations.

I would offer this caution however: The key phrase here is Understanding your plan. If they think your plan is wrong, think you should do more with technology, or think your goals, objectives or tactics are out of scale with reality, remind them that this is not their area of expertise, and that you want them to understand the plan so they can adjust their efforts accordingly.[1]

The important thing though, is to share the information. Many times technologists can suggest good ideas if they understand what the messages are that are most important for the intended audience. At the very least they will be able to review their progress with a little more insight before they show you what they have for you.

If reminding them that marketing and communications is not their area of expertise doesn’t work, and i’m amazed how many technologists consider themselves marketing gurus, ask them if they want to take responsibility for the marketing on a future project, and remind them they will have to get funding for the project as well.

What small businesses and non profits need to know about building awareness for their organization

larry — Wed, 19 Apr 2006 20:32:10 +0000

There is no royal road to getting the world aware of your organization. Technology can help, but only when you already have a good plan for your business and/or product development.

I was recently poking around the internet, while waiting for a large file to download and I found a thread that led me to a conversation that seems to be an open debate.

What’s the single best way to promote or build awareness for your business?

Is it Advertising?

Well no, it’s too expensive by itself.

Is it Public Relations?

Well no, not by itself either.. as you can’t control who will pick up “your” stories, and you can get into a “wag the dog” situation if you key off just what the media is interested in.

Is it Direct Marketing?

Well, for small businesses and startups it’s not, cause they don’t have enough relationships to directly market through.

Is it Interactive / Viral marketing?

Well, as a technologist there is a tendency to shout “Yes it is, hire me to do it!” but it’s really not enough for a small business/startup. Most small businesses and startups need to find and meet the needs of their first clients to survive. These first clients won’t do the viral marketing for you if you’re just doing whatever they tell you to do. Doing exactly what your client asked you to do is not interesting enough, or to quote Seth Godin, remarkable enough, to comment to others about.

So the short answer is, there is no single best way to promote your business.What is required is an intelligently integrated mix of advertising, Public Relations, direct, interactive and viral marketing. You can certainly hire someone to do that for you. But it’s not cheap, and it needs to be done by someone who knows your business at a very intimate level.

I can’t stress enough that to do this well, you must have a very strong, in fact intimate is a better word here, working knowledge of your short term and long term business plan. Armed with this knowledge, you, or your Marketing and Communications consultant, create a marketing and communications plan for the next year, and especially for the next two quarters. (I’m assuming here that you know what a successful one looks like.) Armed with this plan, you are now have one of the three core building blocks require to create growth opportunities for your business.

So here’s what you need to do.

Figure out if you have time and the skill to create and execute a successful Marketing and Communications Plan on your own.
Create a Marketing Communications Plan with realistic costs and financial expectations
Figure out what to measure and start measuring it right away
Include your technologists in understanding your Marketing and Communications plan

This balanced Marketing and Communications plan alone isn’t enough

This marketing and communications plan should be complemented by two other plans.The Business Plan (ideally with both a short term and long term view of goals, objectives, tactics, and measurements). And an operations and fulfillment plan. We’ll cover both of these in a future post.