Fear the middle manager

Today while pondering Microsoft's pending acquisition of Yammer, I came across another corporate acquisition story: how WinAmp went from the cusp of domination in the digital music market to where it is now -- basically forgotten in the continental U.S. -- because of interference and indifference from its corporate overlords at AOL.

Whenever a story like this comes along, it's tempting to rant and rave at just how stupid corporate leaders can be. I mean, they thought highly enough of the company to buy it, but not enough to give it any air to breathe. That explanation doesn't really hold water, though; the managers at AOL didn't wander in off the street, and neither did the ones at Yahoo, Microsoft, HP, or any other major corporation. They got where they are because they're hard-working and reasonably astute. So how is it that, time after time, small companies with momentum get sucked up by larger units only to be destroyed from within?

As I was reading the article, I kept thinking back to a post that Seth Godin made some time ago, on the "hierarchy of business to business needs." Seth makes the point that, with the exception of the CEO and anyone who holds a lot of stock, the people who work there are not immediately focused on growth or profits. Instead, their highest needs are largely personal: the reduction of hassle and the avoidance of risk.

I could be wrong, but this is what I think tends to happen: startup companies are purchased at the instigation (or at least with the approval) of company leaders, who see the company's potential and want to add that to their own company's bottom line. Once in the door, though, those companies become subject to mid-level managers whose primary drive is avoiding risk and trouble. Those are two completely irreconcilable goals: you can't grow or disrupt or evolve without creating trouble for somebody, and now you're reporting to someone whose primary intention is to stop that from happening within his neck of the woods. From that perspective, it's not surprising that fast-rising companies sometimes fail when they're bought out. It's surprising that sometimes they succeed.

The way out of this scenario would seem to be the one that Amazon took when they bought Zappos: they left it running as a quasi-independent company, and it seems to be working out OK. If Yammer was able to negotiate a similar relationship with their new insect corporate overlords, things might go similarly well. You do have to wonder, though -- considering that Microsoft bought the company because they were beginning to disrupt the market dominated by SharePoint, how much room for disruption is there going to be now?

Xobni Apocalypse

I just un-installed Xobni. Allow me a moment to explain why you should care.

I used to think Xobni was cool. Working under a freemium model, it offered an extension to Outlook that dramatically improved the email search experience. It also had some social elements that I never really used, but I thought there was some potential there.

Somewhere along the way Xobni disappeared from my machine, and by the time I noticed the change and went back to re-install it, something had changed. Now Xobni was annoying. It was a serious drag on my day, because Xobni actively interfered with the creation of email -- every time I opened a new message window and started to type an address, Xobni would try to upsell me to the Pro edition by showing that its address book was so much more effective than Outlook's. The window dropped down far enough to cover the CC and Subject lines, and, worst of all, if Outlook recognized the name and auto-filled it, the Xobni box would enter the name a second time if I tabbed out of the address field. I had to learn an entirely new action -- click to exit the field, rather than using the tab key -- to fix a problem created by an overzealous marketing effort.

Presumably Xobni's freemium model isn't working out too well, but I don't care. I wasn't inclined to pay for the Pro account before, because I didn't see enough value there. Now that I'm expanding my definition of "four-letter word" to include the occasional five-letter exception like "xobni," they have lost me for good.

Marketing is a delicate effort. On the business side, it's driven by the urgent need to make money, pay the bills, and satisfy the shareholders. The mandate is on the business, though, to put that aside and look at things from the customer's point of view. If your marketing effort makes things worse for your potential customers, even if you manage to convert some of them in the process, you are destroying your brand and sentencing your company to a long and lingering death. This is the road that Real Networks went down, and the outcome is not pretty.

Marketing is not about what you want, it's about what your customers want. Forget that at your peril.

Surfacing

Yesterday Microsoft announced their new tablet. This comes in two configurations, of course, because if Microsoft can't name a product "Personal Productivity Home Edition RT Preview," they don't feel like they've done a good day's work.

There are some strong ideas. The keyboard is an interesting concept, and there are a lot of people who are really excited with the design of Windows 8. Still, this announcement was well short of what it should have been:

• There's no availability date yet, and the rumors state that -- at the earliest -- the tablets will be available in October. That means that MS announced their product at least four months in advance, and possibly more. Feeling excited now? Well, sit on that feeling for four months, and then let's see how you feel. Apple makes billions by getting you excited within the same moment that you can whip out your credit card and make a purchase. Microsoft still struggles with this, so many years later.
• The keyboards didn't work at the unveiling event. Those who got their hands in display devices found that the hardware wasn't connected, which means that Microsoft unveiled hardware that doesn't work yet. Everyone who's worked on a project is familiar with the experience of assembling the airplane while it's speeding down the runway, but announcing what you've got before you've got it is foolish at best, disastrous at worst.
• The full-Windows-capable version comes with a stylus. Not to put too fine a point on it, but styluses suck. If you've got a touchscreen and still feel compelled to include a stylus, you're doing something wrong with your interface.
• It's complicated. The two versions have different specs, run on different hardware, and will have different software capabilities. It's a little confusing even if you know what you're talking about, and a lot of customers in the consumer space won't be so savvy. The strongest marketing messages are based on a simple, clear message, and Microsoft makes that difficult with its complicated product portfolios.
• No word on pricing. The enterprise market might not care about price so much, but consumers absolutely do. If the Surface costs more than $499, it will face severe challenges, and statements that the price will be competitive with Intel Ultrabooks is not a good sign: ultrabooks go for $700 and up. 
• It's a conventional design. The interface is innovative, sure, but everything else you get -- a rugged case, a keyboard, a mess of ports -- spells "scaled-down laptop." The iPad is successful in part because it redefined what a mobile device could and should be. By comparison, the Surface looks like a conservative reaction, rather than a bold step forward.

This device could succeed. I think it will be a pretty easy sell in the enterprise market, pitched as a lighter and more mobile solution than the clunky Dell laptop that employees would otherwise be using. If it makes much inroads into the consumer market, though, I will be surprised. This is a device designed to sustain Microsoft's profits in an exiting market, rather than an attempt to disrupt its way into new markets.