Whether it be consumer or enterprise, all companies should think about how they can utilize the Internet for delivering their product. The more you do over the web (market, sell, deliver product, run your service) the more you can scale your business with incredible efficiency. After all it only took Skype 2.5 years and $20mm of capital to create $2.5-4b of value while it took Siebel a whole heck of a lot more capital, effort, and time to do the same. While Vonage is doing quite well with its growth, it still requires an incredible deployment of capital and it still requires users to wait for hardware to be shipped to their house before using it. There is more friction in using the Vonage service as compared to Skype. And obviously there is more friction to implementing Siebel than Salesforce.com. In this day and age we are all use to instant gratification and demand fulfillment. Salesforce.com and Skype provide that for its customers.
Skype, Siebel and frictionless sales
What is clear to me is that companies that get it use the Internet in a big way as a sales and marketing channel and even a delivery mechanism for their products. Companies that don’t miss a huge opportunity. Siebel does not get it, Salesforce.com does. Skype gets it while Vonage does not. What I am talking about is reducing friction in your sales and implementation process. The less friction you have in your sales and delivery model, the easier it is to scale. The easier it is to scale the faster and more efficiently you can grow. Software as a service is the epitome of this-easy to sell, easy to deliver, and easy to use. Of course, the one concern is the easier it is to implement a technology or service, the easier it is to rip it out.
Of course, if you are selling an enterprise product with a high ticket price you have to be extremely cautious. It will only work if your product is easy to deliver (download, SaaS, etc.), install, and use. In theory, it sounds great to be able to generate great customer leads and revenue by offering your product over the web. However, this means that you will most likely be selling a product/service with a low ticket price which means you either need to have high volume to generate significant revenue or have an upselling machine which enables you to seed your customers with a lower price version and harvest them to get lots of repeat business from your initial sale. So as you are in your next strategy session thinking about how to get better leads and scale your business efficiently and quickly, do not forget to think about how you can leverage the web even more than you already do to market, sell, and deliver your product. You may not be able to do it all over the web but it is certainly worth taking an aggressive approach because if you don’t do it, someone else may.
Does anyone find that things get a bit messy when customner lock-in diappears?
I say lock-in sucks, but without it, every SaaS application has to have network effects built in, which turns the whole thing into a social networking play etc etc and no one wants that.
Is social soft the new lock-in?
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