Modern software development is going through a massive change. Cloud computing, big data, new methods of developing products — the convergence of these factors (and others) has put the world of development into one of the most significant evolutions in how software gets designed, developed and managed.
A central part of this change is the DevOps revolution — new methodologies and tools to deal with the massively complex computing environments we live in today. At the same time, we are seeing the emergence of a game-changing technology, Docker, which is sweeping the development community with breathtaking speed.
Just google these terms yourself and you’ll see what I mean.
Disruption is occurring, and yet the tools are barely keeping up. Companies like Puppet Labs, Chef and SaltStack were unheard of a few years ago. They are now mainstream, successful companies.
Back in 1993, I was at the birth of the modern internet and this feels just like that — the tools are often rough, difficult, and buggy. And those companies (including mine) that got in and made it all work did very well indeed.
So, I have assembled some of the finest developers I know to help me create a new company, Meros, focused on tools for DevOps. Our first product will be specifically for Docker and will release later this year.
We are currently in stealth mode, with the company being funded by my founding team and me. (We are starting initial discussions with a small group of select early stage investors and if you’d like to know more, email me directly.)
I have had fun working with and consulting dozens of companies over the past several years, doing several turnarounds and, generally, having a blast. But it’s time for me to go back to doing what I do best — running software companies.
I’ve been meaning to write something along this line for quite some time, but never seem to have the time to do it. As someone who currently sits on four boards, plus more advisory boards than I can count, there’s lots to fix in how board meetings are run.
Fortunately, my friend Mike Rogers did the work for me (thank you, Mike!).
Jason Heller hired a company to clear out some poison ivy, and got horrible service. He was pissed.
Unfortunately for the vendor, Best Poison Ivy Removal, Jason is a weapon’s grade expert on web SEO. And he is out to make sure that other consumers don’t get ripped-off. Another SEO expert, Kevin Lee, has piled on (bro code in action). This is just the beginning.
It’s what drives us to create better products, and stay on top of our game.
But how do you find out the skinny on your competitors? You could hire a private detective to fish around, but most likely, they’ll find the stuff that’s publicly available anyway. Yawn.
You can do it illegally, and that’s a really bad idea.
However, there are plenty of ways to find out about a competitor, using perfectly legal methods.
Let’s start with a few tricks.
Glassdoor is a bit of a cesspool, since it allows anyone to anonymously comment on their employer. And, while the intent is good, that is one of the great dangers of the platform: anyone could gang up on a company and write horrible reviews.
However, it’s still a very useful tool to get an understanding of the internal dynamics of a company. Put on a BS filter and read through the reviews and interview comments. You’ll often be surprised at how much you can learn.
Google dorks and advanced search operators
Get to really know Google’s advanced operators to turn search into a powerful intelligence tool. You can also use a number of Google dorks to find things like price lists and other interesting intelligence. It’s not necessarily that hard: I can’t tell you how many times I’ve just typed in the name of a company with the words “price list” and gotten great intel.
I’ve done this with great success: Survey customers of competitors to get valuable information. Or, here’s a tip: you can simply create an inexpensive Google survey and get a quick NPS score on your competitors, and then track your NPS against theirs. Makes for a heck of a game.
Similarweb and Alexa
Unfortunately, you can’t find out what a competitor’s actual web traffic is without hacking into their system (again, no illegal stuff here!). However, you can get a feel as to how popular their sites are by using services like Similarweb and Alexa. And, if you have the bucks, pony up for ComScore.
Always set up a Google alert on a competitor to stay on top of what they’re doing.
Keep an eye on their keywords
Use tools like SpyFu or KeywordSpy to find out what keywords they’re buying.
Track your competitors through Yelp, their Facebook pages, Twitter and Citysearch.
Customers and suppliers
Customers and shared suppliers are amazing sources of information. In fact, some of the most valuable intel I’ve learned is from customers. Pricing, product plans, release schedules… the works.
Watch who they’re hiring
You can learn crazy amounts about a competitor by watching who they’re hiring.
Yup, you can actually call your competitors and you’ll be surprised at how much you’ll learn. For example, call their tech support with a question, and then perhaps ask innocently “how many people do you guys have in support, anyway”. You get the picture.
Google Trends is useful to see what’s trending, whether in your industry, or with your competitor.
LinkedIn, of course, is a weapons-grade intel system. Not only can you find who works somewhere, but you can also get a feel for employee counts, etc. Employee count alone can give you a feel for revenue.
Ex-employee interviews and hires
Ex-employees sure seem to like to talk… ANd nothing is a better source of intel than a disgruntled former employee. This is sometimes a gray area; you don’t want to be in a position where you’re compromising the ethics of an employee’s own confidentiality. But a lot of what they will tell you is not confidential and very useful.
It’s lame to even write this, since everyone knows it and does it. But tradeshows and conferences are cesspools of leaked information. If you want it, chances are you can get it by just chatting away with people. Buying drinks helps.
It’s surprising that competitive “booth busting” is not done by more people. And sometimes, your competitors will do astonishingly stupid things. Be on the lookout for these rare opportunities. For example, many years ago, I was a product manager for a disk utility. A competitor was coming out with a new version, and we were dying to know what features were in it. So I went to a trade show, and they were demonstrating the beta version at the booth. That was somewhat useful, but I really needed to (legally) obtain a copy of the product.
And then something amazing happened: Over the PA system, they announced that they were raffling off a beta version of the software. I couldn’t believe my ears. I ran to an ATM machine, took out $200 in cash and then waited. Soon, a winner of the raffle was announced. I walked up to him and bought it off of him for $200 and we had a beta copy of the company’s software. We were able to run it and find out what features were planned. Needless to say, it didn’t end well for them.
However, keep in mind the Golden Rule. Compete fairly and ethically.
But that doesn’t mean that getting out there and doing some basic reasearch won’t drive tremendous results. You might be surprised at what you’ll discover.
Recently, an executive coach was advising a CEO I work with on building teamwork in his company, and encouraged him to do “ra-ra” type activities (group outings, that kind of thing).
That’s meaningless. While it’s always nice to get people together for a bit of fun, the real way to build teams is to get people working together on actual business problems.
Team-based budgeting is the method I have used for many years to perform the budget process and build teamwork, and it makes a lot more sense than what is often done.
In most companies, budgets are done by each manager turning in a budget to the CFO, the CFO puts it together for the CEO, the CEO cuts out expenses and adds additional revenue, and poof! – the budget is presented to the board.
Not really a workable process.
This brings me to the subject of team-based budgeting.
I’ll start with a story: Many years ago, I started as the president of a software company and found several things wrong with the accounting and finance functions:
– No one had responsibility for a budget.
– The VP of Sales was in a heated deadlock on commissions.
– Forecasting was done on a hope and a prayer.
At the time, the company was small — about $15 million in revenue — and so, at that size, it had largely been run on a sort of “financial dictatorship” by the major investor. Well, considering that this shareholder was dealing with a management team that didn’t really understand finance, his point of view was understandable.
However, it’s important to develop a team-oriented approach to forecasting and budgeting. By implementing this approach, I rapidly had the whole senior management team working together smoothly on the finance functions. Better yet, we were able to grow very fast, to nearly $50 million in revenue, without any outside capital. Because we responsibly controlled costs, as a team, we were able to do great things, without a lot of money.
But it really wasn’t that hard. All I did was:
– Rework the financials to make them clear and understandable.
– Make the managers responsible and accountable for their budgets.
– Implement team budgeting
Reworking the financials Of the three financial statements required to run a business (P&L/income statement, cash flow and the balance sheet), the one that managers must have a good grasp of is the P&L. The other two can be worried over by the CEO and the CFO.
And there we run into a problem: GAAP accounting, which can muddy the scene. Revenue recognition, accruals, depreciation and amortization can make it like a company is bleeding money hand over fist, but when you really look into it, it’s actually doing just fine. Or, a company can look wildly profitable, but is a toxic mess (anyone ever heard of the old Computer Associates?). Reading a modern financial statement, especially for a software company, is a bit of an art in itself.
So first I pivoted the focus onto billings as the topline focus. Billings is what sales guys go for, what they see “on the board”. They closed a deal, and it was for $100k. That’s what they see, and that’s what motivates them, and that’s what you want them to get.
There are fine nuances to get into here, that aren’t worth cluttering up this article with. It’s different in a SaaS environment (where you typically compensate on MRR/ARR and make that your target), and yes, there are cases where you may not compensate on billings. But the bigger point is, get a number that’s real to the sales people, that they can go fight for.
So the first thing I got everyone around was the concept of one topline number. And it was the billings number. This was in direct contradiction to what the CFO had been doing earlier (bizarrely, paying commissions on recognized revenue).
Now to the expenses: there are expenses that managers have control over, and ones they don’t. They go out and buy something for $10,000, it’s $10,000. It’s not some amount amortized over a period of time.
I wanted the managers to know that if they bought something, it didn’t matter how we would book it from an accounting perspective: they bought it. Business live on cash flow, and the impact of cash decisions is vitally important for managers to understand.
So I went a step further, creating a “modified EBITDA”. Basically, I turned the P&L into a cash-based accounting system (we still maintained a separate set of standard GAAP financials for the board, investors and other external parties).
To create my modified EBITDA, I simply added back in certain capital expenditures to my EBITDA figure to get an income statement that reflected actual cash spend, making it easier for everyone to understand.
And then I got them all in room and we budgeted as a team.
Now, depending on your business, you can probably ignore the other pieces of advice here, but this last one is important.
The way you do team based budgeting is to you set the goals in advance of the meeting — a realistic target. Like: “20% operating income, 25% increase in sales.”, and so on.
You then give all the managers enough time to pull their numbers together. Each has a departmental spreadsheet for their own area.
For the sales forecasting side, I would work between the product teams and the sales teams to get our product launch dates figured out, new versions, etc. I would take the teams off-site and we would work through the product planning. (Product planning is a huge driver for revenue, and something to spend quite a bit of time on).
And then I got all of the management team in the same room. We sat with a large-screen projector, and our spreadsheet was built with links where I would have all of their files loaded at the same time. Then, we would go through every manager’s area, and they would have to account for their expenses. As we made changes to each department’s budget, the main P&L forecast was automatically updated, giving a very quick view of the impact of each little change.
Now, peer pressure is a powerful motivator. We’re all on the same team, so when the sales person says “I can’t get sales without more leads”, the marketing person is right there to answer him, and the CEO is right there to work with the team.
When I first loaded that spreadsheet, it was comical, as a first-pass budget always is. Everything was in the red, because sales people sandbag and managers ask for more money than they need. But after a marathon two or three-hour session, we started to get to reality.
The CEO is driving the process. But the CEO is letting the team work on the heavy lifting of figuring out where to get the money.
I’ve literally been in a situation where I said “not enough money for a Christmas party”. R&D and sales then began to horse-trade expenses back and forth to get the money for the Christmas party. We got our Christmas party. (I really doubt I would have killed the party, but it was the idea that counted — that we had to work out a way to cut more costs so that we could earn the luxuries.)
After one marathon session, managers are given homework, to go back and figure out ways to get the costs worked down more (or get the sales up). Department heads have individual break-out sessions with other department heads to work on the budget. And then we have another team meeting a week later.
After that, the budget is pretty much a wrap.
Getting to the target number becomes a game. And when you have a game where everyone works together, you have a team.
Key is that the managers own their budget. They are given leeway to execute on their plan, although I still had in place basic cost controls to ensure that costs were still being managed.
Pushing responsibility down into the organization is the way that company’s succeed. And team-based budgeting is the first step to correctly delegating and managing authority.
Yesterday, Kaspersky announced that some of its internal systems had been breached. While this may have created a sense of Schadenfreude in some parts of the security community, Kaspersky has handled the situation quite well. Instead of other companies that have suffered a breach, Kaspersky worked straight from the crisis management playbook — full disclosure, plenty of information and a plan. Kudos.
As Graham Clulely says: “In short, it handled what could have been a corporate crisis well – and reassured customers and partners that their data was safe, and the integrity of its security products had not been compromised.”
(Although one can’t help but wonder at the timing. According to the press release, the malware was found in “early spring 2015”, but the announcement is coming on June 10th — just a few weeks away from the official start of summer…)
Kaspersky is being up-front, but they are also spinning this as a research item. And that’s okay, because it is some fascinating research. This is a very interesting new malware variant, and quite sophisticated, quite likely tied to state-sponsored activities.
But they just can’t help being Kasperskyish:
From a threat actor point of view, the decision to target a world-class security company must be quite difficult. On one hand, it almost surely means the attack will be exposed – it’s very unlikely that the attack will go unnoticed. So the targeting of security companies indicates that either they are very confident they won’t get caught, or perhaps they don’t care much if they are discovered and exposed. By targeting Kaspersky Lab, the Duqu attackers probably took a huge bet hoping they’d remain undiscovered; and lost.
(Yeah, that explains the Schadenfreude part.)
Anyway, the bigger story is the state of the antivirus detections on the day following Kaspersky’s announcement.
Considering that most antivirus vendors practice what I call “hash-whoring”, where hash detections from VirusTotal or internal scans are dumped wholesale into their databases (explaining the massive size of today’s antivirus engine), the poor detection state of this variant is surprising. (Incidentally, I’m not condemning this practice — it’s a very useful stop-gap until a detection team can make a good detection — nevertheless, it’s abused way too much, especially by poorer quality, also-ran engines.)
We know what this piece of malware looks like, because Kaspersk published the complete Indicators of Compromise (IOCs). So, we can just go to VirusTotal and check the detection status:
And so on.
So, just for fun, I’ve published the hashes below, hyperlinked to VirusTotal. You can click on them as the week progresses to see the state of detection of your antivirus product.
BlueStripe has the mission to help IT operations teams map, monitor, and fix their distributed applications.
BlueStripe’s software, FactFinder, is a type of Application Performance Management (APM) product that is very unique, and very powerful. (The use of the APM label for BlueStripe is admittedly sloppy — it’s technically, per Gartner, Application-Aware Infrastructure Performance Monitoring, or AA-IPM. Nevertheless, the label “APM” sticks and even I can’t stop using it.)
Classic APM solutions help developers and IT managers spot and resolve problems with applications. Typically, this is done in the form of some code that is inserted into an app (kind of like a “barium trace”). This is what a company like New Relic does.
The problem with the code-centric solution is that it’s great for developers to debug their apps, but it doesn’t help IT or DevOps folks. So, the typical solution to an application problem is for enterprises to hold large “bridge” calls, where IT, DevOps, and app developers all get on long and often painful conference calls to determine where the fault lies.
FactFinder doesn’t rely on any code, and is a different type of APM. Instead of code, it relies on lightweight and intelligent agents (called “collectors”) directly installed on servers and desktop systems to monitor a broad set of applications. These agents then feed up into a map of all major applications, allowing an IT executive to immediately spot (and dig down to) where the problems are.
For example, let’s imagine an application in banking. When a person inserts their ATM card, a series of actions occur behind the simple ATM transaction, often involving a series of applications residing on various servers. And, let’s say that ATM transactions typically take under 30 seconds, but suddenly, start taking over 2 minutes. Something is wrong. It could be a failed connection, a configuration issue, bad code, DNS issues, rogue applications, mis-matched bandwidth, memory or storage — whatever. With FactFinder, the IT executive gets an immediate alert, and can visually determine where the problem is, dig down and fix it.
It’s wickedly cool stuff.
FactFinder can monitor pretty much anything. Windows, Linux, Solaris, and AIX servers, and even using containers like Docker. It can even monitor response times from other servers (mainframes, 3rd party services) that are part of an application. And, it monitors both packaged applications (SAP, PeopleSoft, Exchange, etc.) and custom-built applications.
Environments are becoming insanely complex
The problem of managing complex application environments is even more difficult because of two trends: virtualization (massively multiplying the number of servers and the complexity of the environment) and the move to the cloud.
It’s not unusual for a server to have 12, 20, 50 virtual machines — on one server. And the cloud… well, it’s not “the cloud”, it’s almost always hybrid deployments in enterprises. So you have a multiplication of complexity, because you have apps and data residing on the private cloud, and apps and data on the public cloud. You get the picture. Sucks to be an IT ops person.
And this is where FactFinder becomes intensely interesting. Because it can monitor the apps in these complex environments.
Which brings me to…
Where Microsoft fits in.
In my opinion, BlueStripe is a perfect fit for Microsoft. In fact, I can’t think of a fit more perfect.
To explain, Microsoft’s centerpiece in its systems management strategy is Systems Center Operations Manager (SCOM). SCOM provides IT managers with a total view of network operations.
FactFinder provides many advantages to SCOM environments, by discovering, managing and measuring application and platform dependencies.
IT managers can have FactFinder automatically build topology diagrams (not possible now in SCOM), map a dynamic application architecture, monitor dependencies and provide full coverage of dependency failures (you can see a 30 second demo at TechEd by Nick Burling to get a quick idea of how it integrates).
Simply stated, it “turns the light on” for IT, development and DevOps as to what is happening to with applications on their network.
In addition, BlueStripe Performance Center for Windows Azure Pack adds application management – and a single view for managing application service delivery, all tied directly into the Windows Azure Pack service management workflow.
Oh, that’s cool.
Well done, BlueStripe team (and the competent banking group over at Pac Crest).
Revenue: It’s what CEOs are judged by. But all too often CEOs give white lies about revenue to themselves, their staff and investors.
I’m not talking about criminal stuff. It’s just, well, not being totally honest about the state of the numbers.
Let’s look at a few that I’ve seen.
Reporting new license revenue and recurring revenue as one number.
This is so common, it’s almost a joke. I routinely talk to CEOs who say “our numbers are up”, and then I ask the question: “Is the new license revenue up?” and get the real answer.
New license revenue is what’s new. A new customer, and it is the single most important revenue number.
Recurring revenue is from customers renewing a subscription or a software maintenance plan.
Recurring revenue is driven by three things, in order of importance:
product quality, price and relevance,
quality of technical/customer support and
renewal sales activities.
If you focus on these three key drivers, recurring revenue chugs along happily. For enterprise software companies, typically 75–90% of your customers will renew their subscription (or buy a maintenance plan). 85% is a good goal. I’ve experienced as high as 100%. But that’s an outlier, and if you have 100% renewal rates, you’re not as smart as you’re lucky. Customers do drop off in a normal world.
In consumer software companies, the number is typically lower, perhaps in the 65%–70% range.
(Of course, if you’re a pure SaaS/subscription business, you’ll focus on churn.)
The biggest mistake a sales manager can make is to confuse these two revenue sources. Recurring revenue reps should not be compensated as highly as new license reps (and they often are, because the numbers are so large). They should be compensated on a good base plan, with commission tiers or bonuses tied to the percentage of existing customers who renew their license subscription, with the total dollars booked being less important.
That’s not to minimize the revenue role of a renewal rep, as they should be compensated for aggressively selling add-on licenses, additional plans, and other revenue opportunities. The point here is to put the picture into perspective.
Focus on your new license billings as your number one priority. Have that number as a KPI that everyone knows.
Then have a separate KPI for total recurring revenue dollars and the percentage of customers renewing.
Don’t hide poor new license billings by merging the number with recurring. That’s just lying to yourself and your investors.
But again, we’re looking at an honest number to run your business. In the above link, Carbonite is a company that has a good approach.
To make it simple, keep two statistics:
How many customers are up for renewal in a given period? (a)
How many of those renewed? (b)
And you get:
It doesn’t matter if they renew in that month, or in a different month. One simply keeps track of the rolling average of renewal rates.
What is the dollar value of the renewals in a given period? (a)
What were the renewal dollars (including upsells, crossells, additional licenses, etc.) in that period (b)
And you get:
b/a=renewal dollar rate
The point is to separate thinking in the organization from existing customers and new customers.
Incorrectly calculated subscription revenue
Subscription-based revenue is another method that’s often incorrectly calculated, often completely innocently.
As you probably know, there are two key calculations in subscription revenue: MRR (Monthly Recurring Revenue) and ARR (Annual Recurring Revenue).
The formula for MRR is dead simple = Total # of Paying Customers x Average Revenue Per User.
Now, MRR/ARR metrics are commonly used in reporting, but they are not included in GAAP or other reporting schemes. But they are very important to investors, and to the management of a SaaS company.
So here are some common errors in SaaS reporting. Some of these are surpassingly common.
Including quarterly or annual contracts at full value in a single month. Even if someone pays you a lump-sum quarterly or annually, you still need to divide the numbers up to match the MRR figure. (I know, it seems obvious, but I’ve seen this mistake done all too often). Bookings are different than MRR.
Underreporting by including fees in the MRR number. Don’t under-report the number by discounting, from the MRR number, credit card charges, delinquency, etc. It will throw off the true number. Instead, break those out separately.
Including one-time payments. Don’t bundle in one-time payments into your MRR. These are just that: one time payments, whether NREs, or license fees, or whatever. Report them separately.
Including free trials. Don’t include free trails in your MRR numbers. It’s fairly idiotic, but it does happen surprisingly more than one would expect.
Not netting out discounts. Net out your MRR net of discounts. In other words, if a customer gets 20% off per month for prepaying, then report the number net of discounts.
Under-reporting can be almost as bad as over-reporting. Under-reporting revenue (to be “conservative”) can also really kick you in the teeth, as I’ve learned first-hand.
Just get the right number, don’t play games and be completely honest with yourself and with your team and investors. You may not be popular in the short-term, but in the long-run, you’ll be running a better business.
Every once in a while, someone writes a blog post about the genius of Claude Hopkins. Well, since I am not feeling particularly original today, I’ll tag along and do exactly the same thing, but perhaps with a different twist. After all, one can’t talk about Hopkins enough.
Despite what Bill Gross says (the success of startups is largely timing), you can control your destiny, and it comes down to not only the right product, but the right marketing.
There are three marketing legends, that if you read their books and apply their methods, will considerably impact your chances of success: Claude Hopkins, David Ogilvy and Al Ries.
Most anybody who has worked in marketing or advertising knows of Claude Hopkins. The ones, however, who take his words to heart, are the successful ones.
Hopkins was a rock star in his day. In 1907, he earned several million a year (in today’s dollars) at Lord and Thomas. He was the genius behind many of the biggest brands, and most are still here with us today. Heck, you can blame the fact that people use toothpaste on this guy. He made it popular.
David Ogilvy famously said “Nobody should be allowed to have anything to do with advertising until he has read this book seven times. It changed the course of my life.”
Timeless The free trial model, the freemium model, coupons, campaign tracking… so much came from Hopkins and other greats like him.
The reason? Despite what anyone thinks, what motivates people are the same factors today as they were 100 years ago. Or 2,000 years ago, for that matter. Now, obviously, tastes, technology and styles change. But the fundamental drivers of humanity are still there.
I’ll give you an example: Many years ago, I was a young product manager who had recently read some of David Ogilvy’s works. Now, if you’ve ever read Ogilvy (who came from the Hopkins school), he repeats one thing tirelessly: use plenty of copy.
I met with our agency and they presented some design for an ad. Very light on copy, with a big headline. So, I asked the question: “Why not use more copy?”
The answer: “People don’t read these days. It’s a visual world”.
Oh really? People don’t read? Nah. They read blogs, magazine articles, trade publications, emails, Facebook posts, etc., etc. People read.
Claude Hopkins, 100 years ago, ran into the same thing. Here’s what he wrote:
Some say “Be very brief. People will read for little.” Would you say that to a salesman? With a prospect standing before him, would you confine him to any certain number of words? That would be an unthinkable handicap.
Like I said, some things never change. Once you get a person to read the headline, why not have some copy to finish off the sales message? (Now, I’m not actually in favor of the landing pages with endless, schlocky copy. Creating good landing pages and web sites with an artful mix of headlines, subheads and copy is, itself, a fine craft. But don’t worry about writing a bit. You might find that people actually read it.)
Hopkins in his own words Let’s look at some classic Claude Hopkins quotes:
Advertising is salesmanship. Its principles are the principles of salesmanship…The only purpose of advertising is to make sales.
People don’t buy from clowns.
Don’t think of people in the mass. That gives you a blurred view. Think of a typical individual, man or women, who is likely to want what you sell.
People can be coaxed but not driven. Whatever they do they do to please themselves. The best ads ask no one to buy…The ads are based entirely on service. They offer wanted information. They site advantages to users.
Human nature is perpetual. In most respects it is the same today as in the time of Caesar.
The product itself should be its own best salesman.
Almost any questions can be answered, cheaply, quickly and finally, by a test campaign. That is the way to answer them, not by arguments around a table.
A person who desires to make an impression must stand out in some way. Being eccentric, being abnormal is not a distinction to covet. But doing admirable things in a different way gives one a great advantage.
Show a bright side, the happy and attractive side, and not the dark and uninviting side of things. Show beauty, not homeliness; health, not sickness. Don’t show the wrinkles you propose to remove, but the face as it will appear. Your customers know all about the wrinkles…We are attracted by sunshine, beauty, happiness, health, and success.
…the love of work can be cultivated, just like the love of play. The terms are interchangeable. What others call work I call play, and vice versa.
I know of nothing more ridiculous than gray-haired boards of directors deciding on what housewives want…We must never judge humanity by ourselves. The things we want, the things we like, may appeal to a small minority.
The greatest two faults in advertising lie in boasts and in selfishness. The natural instinct of a successful man is to tell what he has accomplished. He may do that to a dinner partner who cannot get away. But he cannot do that in print. Nor can he put over, at a reasonable cost, any selfish, undertaking. People will listen if you talk service to them. They will turn their backs, and always, when you seek to impress an advantage for yourself. This is important. I believe that nine-tenths of the money spent in advertising is lost because of selfish purposes blazonly presented.
Here are some example ads. Yes, they are dated, but in their day, they were very powerful and were behind the success of so many major brands, it’s a bit mind-blowing. And the fundamentals, again, are timeless.
Schlitz Beer This is a famous example Hopkins used to catapult Schlitz from 5th position in the market to #1. Before he came out with this campaign, Hopkins did an enormous amount of research, even going to brewery school to teach himself how beer is brewed. Nothing was clicking.
Then, he actually went to the Schlitz brewery, and found some amazing things: Schlitz was using water from ancient artesian wells, and going to great lengths to insure its purity.
When he asked the folks at Schlitz why they had never told anyone about these advances, they answered that “everyone in our industry does this”. But Claude realized that no one outside of the beer business knew these things. The irony is that every beer brewer advertised “purity” but, since everyone was saying it, it had zero impact on the public.
So, he simply highlighted what Schlitz was doing (again, that everyone else was doing as well).
As Hopkins says (relevant today in technology marketing), “The situation occurs in many, many lines. The maker is too close to his own product. He sees in his methods only the ordinary….That is a situation which occurs in most advertising problems. The article is not unique. It embodies no great advantages. There are few advertised products which can’t be imitated. Few who dominate a field have any exclusive advantage. They were simply the first to tell convincing facts.”
Good old Claude convinced women to wash their faces with soap before their applying makeup.
Sunkist Hopkins’ employer, Lord and Thomas (of Albert Lasker fame), landed the Southern California Fruit Grower’s Association account for oranges grown in California (“sunkissed”, later changed to “Sunkist”). Back then, people didn’t drink orange juice. They just ate the orange.
Homeboy Claude changed that. He marketed drinking an orange, and included a coupon for an inexpensive squeezer. Huge success. We now drink our oranges.
Thanks for the OJ, Claude!
Van Camps beans
Do you know that before Claude got involved, people didn’t buy canned beans? They cooked them themselves. Claude changed all of that.
I started a campaign to argue against home baking….I told of the sixteen hours required to bake beans at home. I told why home baking could never make beans digestible. I pictured home-baked beans, with the crisped beans on top, the mushy beans below. I told how we selected our beans, of the soft water we used, of our stream ovens where we baked beans for hours at 245 degrees. Then I offered a free sample for comparison. The result was an enormous success.
He told people to buy his competitor’s product. And it was wildly successful.
After a while, when others followed us, we suffered substitution. Our rivals tried to meet it by insisting on their brand. They said in effect, “Give me the money which you give to others.” And such appeals fell on deaf ears.
I came out with headlines, “Try Our Rivals, Too.” I urged people to buy the brands suggested and compare them with Van Camp’s. That appeal won over others. If we were certain enough of our advantage to invite such comparisons, people were certain enough to buy.
That’s another big point to consider. Argue anything for your own advantage, and people will resist to the limit. But seem unselfishly to consider your customers’ desires, and they will naturally flock to you.
You can google around and find other great examples of Claude Hopkins’ genius.
The key point is that a lot of companies waste money on branding and marketing that doesn’t succeed. And while print advertising is largely dead, the principles of good advertising and marketing are timeless and are ignored at one’s peril. I have certainly used them to great success myself in every company I’ve been at.
So, the next time you’re eating a breakfast of Quaker Oats, having a nice glass of orange juice, while reading the Wall Street Journal, then brushing your teeth, then driving a car with Goodyear tires, then coming home and having a Schlitz beer with baked beans, while shopping online at Sears (well, the last three were a stretch, unless you live in a, err, certain part of the country), you can give a hat tip to Claude, the original dude. Because he was the marketer behind all of these ideas and brands, and many more.
It’s no news to anyone who downloads software. Most download sites are awful. Misleading practices. Over-indulgence in advertising.
It’s all over the board. One can barely find a good download site anymore.
The best place to find a trustworthy download is directly from the developer. And even that is fraught with peril, since many developers use, well, download sites to propagate their software.
In response, many developers are using Github to provide downloads. But Github, at least for inexperienced users, is daunting.
But the most depressing is SourceForge. Made all the more pathetic by its once-proud past, SourceForge has become a sad and pitiable site. Apparently pushed mercilessly by its parent company, Dice Holdings, to make quarterly targets, the company has lost its way and is now the butt of jokes.
Once the darling of open source, SourceForge has been eclipsed by GitHub and package managers, leaving it with a long, thin tail of (mostly consumer) software. It has used increasingly desperate measures to monetize the service through questionable advertising, SEO, and adware injectors.
Couldn’t have said it better myself.
And Google seems to agree, as I tried to download Ccleaner portable today:
And then there’s the confusing advertising. What button do I click?
First, we are mislead. “An ad-supported installer” which “might provide you with an ad during the install process”.
Oh well, then we have to get through this warning screen. Ooops!
Anyway, we finally get to the installer and this is what you get (you are defaulted to “Quick (Recommended) which will change your default search to Yahoo). The “Internet Browser” is Chromium, defaulted to search to Yahoo, and defaulted as your primary browser. Irritating.
Of course, Yahoo is safe, but there has been all kinds of crapware installed in the past.
And then it continues. At least you’re opted-out of this software:
Whatever. The problems of SourceForge are well documented and it’s not worth getting into in more detail.
It’s enough to say: stay the hell away from this joke of a site.