Washers, dryers and secret sauce – why naming your technology is important

Our washer and dryer was on the fritz today, and as I started to do some research on large capacity stackable units I started to get overwhelmed with all of the new terminology and features.  After all, isn’t a washer a washer and a dryer a dryer.  How many different combinations and features could there be?  As I dug deeper I found myself thinking about these appliances less from a consumer’s viewpoint and more from a marketing one and appreciating how these various companies could make a commodity product sound so exciting and differentiated.  Sure, all of the competing products had to check off performance, speed, and low energy but what really struck me was the marketing terminology they used to differentiate themselves.  Rather than just sell a steam washer or dryer LG had TrueSteam technology while Electrolux offered PerfectSteam on their site.  These appliances didn’t just balance well but LG used TrueBalance AntiVibration System versus the Perfect Balance System from Electrolux.  Other features included the Direct Drive motor from LG for better performance while the Electrolux offered WaveTouch Controls.  What this really helped me think about was how these various companies prioritized the features for their given market and how they differentiated themselves through their proprietary technology or secret sauce.  And yes, I immediately began to think about how looking at marketing in the washer and dryer world would apply to startups.

Researching washers and dryers reminded me of several meetings I had years ago with a marketing expert named Richard Currier.  His big thing was to take a basic technology, break it out into a few parts, and to give them sexy names.  For example when Sybase the database company was on the market it was fighting with Oracle and others and ended up capturing a big chunk of the financial services market because it leveraged an innovation it called Two-Phase commit.  Every sales person would lead in with the benefits of Two-phase commit and while other competitors may have had something like it, if it wasn't Two-Phase commit it wasn't good enough.  What Sybase did was take one of its secret sauce technologies (innovative at the time, standard now), named it, and leveraged the crap out of it with its sales force.  While the technology performed as advertised, naming it definitely gave it some cache.  

Coming back full circle, I had a conversation this morning with an entrepreneur who was going after an interesting segment in the online video and marketing world.  The company had some nice revenue for a bootstrapped operation.  However I mentioned to the CEO that it seemed more like a one-off consulting or agency shop versus a scalable VC-backable market opportunity.  As we dug into his technology deeper and as I started to understand some of the magic behind his platform, I recommended to him that he think long and hard about figuring out what the secret sauce in the backend was and how to name it so he could better market his services and compete against others.  While naming it won't in and of itself help him land more customers, I can guarantee that it will help his company sound more exciting and innovative versus companies that do not.  And in the end whether the deal is closed the sales prospect will certainly remember and question how important TrueBalance Antivibration and WaveTouch controls are to his purchasing decision.
Read full story Comments { 4 }

Future of television advertising (continued again!)

My first post about portfolio company Visible World and the future of television advertising was in October 2004 (see here).  In the post, I wrote about how television advertising needed to change and how the advertisers and those with inventory had to adapt to the rising online threat and offer new technology to make their […]

Read full story Comments { 3 }

Lessons from Joost

I am not going to rehash Om Malik's excellent summary of "What went wrong with Joost" but I did want to dive deeper into a few points.  As I have always said, raising too much money can be a curse and not a blessing.  Here is an excerpt from my post in 2006Trust me, I […]

Read full story Comments { 7 }

I want it NOW, I want it REAL TIME

I was recently asked by a friend if he should get his son the new Nintendo DSi.  This would be an upgrade from the current DS and also add the photo capability.  As I thought about my own son's usage of the device, I said no.  Once my son got an IPod Touch for music […]

Read full story Comments { 1 }

Occam's Razor and the current state of venture

I have made many posts in the past about focus and doing more with less, and as I continued on this path it reminded me of Occam's Razor, the idea that the simplest explanation to any problem is the best explanation.  Of course Occam's Razor can get more complex but over the years it has […]

Read full story Comments { 1 }

Inspirational video for entrepreneurs

Jonathan Kay from Grasshopper sent me a great video on entrepreneurship.  First I love the inspirational message.  Secondly, I like the use of a viral video to cleverly promote his virtual PBX numbers for entrepreneurs.  Take a look and hopefully it will brighten up your day. What I love about the message is that entrepreneurship […]

Read full story Comments { 4 }

Pioneers get arrows in their backs

Pioneers get arrows in their backs – I have experienced it firsthand from an active investor's viewpoint and written about it in the past.  Being early in a market is great but being too early can be deadly.  Just like the settlers in the westward migration, entrepreneurs who are too early will get arrows in […]

Read full story Comments { 6 }

Growing your business in a recession

I read a great article by James Surowiecki in the New Yorker the other day titled "Hanging Tough."  In the piece, James gives a historical perspective on companies that thrived and grew during previous recessions by increasing spending on on advertising and R&D.  While I am not advocating that companies go out and blow their […]

Read full story Comments { 8 }

Cover the basics before you raise capital

No matter how many times I told my friend that he needed to get a deck together for a potential capital raise and model out some thoughts on market sizing and financials, I ran into resistance.  It was not because he didn't think it was important or that it mattered.  It was because he was […]

Read full story Comments { 4 }

Hybrid clouds are coming

Amazon has taken off with its cloud compute infrastructure but there still have been some limitations from an enterprise perspective.  Mainly, some enterprises are concerned about keeping their data private, about reliability, and storage costs over time.  Any enterprise looking at potentially leveraging the cloud would love to have a hybrid solution which allows them […]

Read full story Comments { 5 }