extreme business planning, again

Many years ago, in the heydays of WAP dreams I listened to many a telecoms executive gushing about the future of WAP.

And off they went spending much and many a dollar on infrastructure, hardware and advertising. Did you ever use it?

Then it was 3G.

Yet again the telecoms dreamt up huge numbers and plonked down 134 Billion $ for the licenses in Europe alone.

Know what, we did not go out and do what the telecoms marketing departments had planned for us to do.

Vodafone, the biggest spender in Europe spent 34 of those Billions on licenses and had last quarter 3.8% of their business from 3G. Of the current 720 mobile users in Europe only 5.4% uses 3G. (Source IHT)

That's extreme business planning the bad way.

When I started using the term "extreme business planning" I meant as in extreme programming, a strain of agile programming. Extremely agile. Not extremely stubborn.

This gets me to the point:

Perhaps the most dangerous part of a strategy is taking it too literally, too narrow too early - "What value am I going to deliver to what customers..."

"What's your target customer?"

"What problem are you going to solve?"

Guess you've heard it. Dangerous stuff. Very dangerous stuff. Ask the telecoms chaps!

To make it simple - there is no way you can outguess the market: How are they going to use your stuff? Who's going to be the first users? The biggest group of users? Are they going to use it all?

No way you'll know beforehand. Accept that fact and make your moves so reality can inform you as early as possible.

So what to do? Your product is ready and you just received five million in funding of which four are earmarked the "product launch":

One million goes into training the distribution channel, three into some amazing ads and TV slots precisely targeted your target market. Then you lean back and bite finger nails. Lotto style.

The telecoms can digest a miss, with pain, you cannot at all.

I wonder how many start-ups walked into this trap without the right "lottery ticket" and have never been heard from since?

Build what you think is some valuable stuff, get it out there as early as possible with no limits to who the user might be - listen attentively, find out how it's used, who uses it - tweak and repeat until it sticks in reality, then crank up, only then. That's where the funding should go, fund the time you need.

That's extreme business planning, extremely agile business planning.

In my view the only kind of planning with a reasonable chance of success. For big and small.

Comments

[John Dodds]

There you go again maligning the marketers ;O) - in the 3G auctions, the marketers didn't get close to being involved. It was strategic planners and techies arguing that because their products could do something then the people would think wow (though at the time of the licence auctions, a 3G "phone" didn't exist in any usable size). If some good marketers had been involved, they'd have questioned the financial asusmptions because they'd have known they'd be required to deliver them in the future.

[sig]

John, ouch, you're right.

Still, someone must have said "this is our market and this is how they shall use it". Even more, when the techies were in love with the new newness and tech power and the higly placed whatevers pushed - someone must have designed the "marketing package" including pricing levels etc. for the push after the fact.

And one may argue that it was at this stage many errors were made - like pricing for data transfer as a modem, which certainly leaves me cold to something I would have loved to use more (maybe the only sane use for the tech at the end of the day)!

Back to the "strategic planners" - don't you think they asked for input from the marketing department who again must have made assumptions as to who, how and for how much the tech was going to be used?

But at the end of the day - the argument that it is the strategy keepers who are at fault should hold (point of the post after all) whatever input they asked for and got from techies, marketers, support or fortune tellers...

*slapping own fingers* for maligning marketers. :D

[John Dodds]

You're right of course and, as you know, i'm not normally one to defend "marketers". The key is that the assumptions should be challenged.

But rather than evaluate the worst case scenario, it's usually a combination of yes-men trying to defend the wildest projections.

I probably went a little over the top because in mentioning the 3G auction, you hit a nerve with me. The situation in the UK was almost uniquely crazy and I remember at the time being appalled at what went on. Everything you say is right and logical but I'm really not sure that it did happen in this case.

An academic economist invented the auction process as the way to generate the best economic value for the bandwidth (and thus the Treasury) and the phone companies buoyed by their booming market fell for it. Other governments saw this and replicated the auction in their territories.

Even the phone companies' ridiculously optimistic predictions about when the phones would reach the street were couched in terms of a number of years ahead. So they really were guessing as to what demand would be, and yet they assumed people would be hungry for video etc and they didn't want to risk not owning some of the spectrum. Scarcity premium + overoptimistic bidders = bubble!

I was told by a techie at the time of the auctions that 3G technology technically existed but if you wanted to produce a "phone" you would need a flat bed truck on which to transport it. The whole thing was mind-blowing. Tech companies (that had done an astounding job of getting people to pay high prices for phone calls which they previously didn't make) suddenly decided that they knew about the content business and are still paying for it today!

[Dannie Jost]

Sig! I like your thinking, you know that, and I think we could agree and disagree on a few things, and perhaps even learn something of significance in the process. That said, I think that marketing is a fallacy, and that nobody can really predict business developments as long as they are using linear models of growth and dysfunctional assumptions as to how markets work.
I think that markets as such are not important, not really, they are just the place of exchange between what I have and what I want, irrespective of the motivation of my want, be it need, be it greed.

So, how do we know that we are on the right track?

You got me thinking.

[sig]

Dannie,

"how do we know we are on the right track?" - to which I would say "track?", does that not imply having something set, planned, budgeted?

As metaphors go I would rather see a football player working the ball towards the goal on the other side of the field!

No track, no long term plan, just being extremely aware for openings, possibilities and other players on their way into a position. Then dribbling the ball, trying openings, grabbing the bounce-back, trying something else over and over again.

All the time with the goal in mind, not afraid to punt the ball backwards if necessary.

In other words:
1) Goal is abundantly clear at all times for all.
2) All senses open for any openings and opportunity that could lead towards the goal.
3) Try all opportunities all the time but always in such a manner you can get the ball in a bounce back.

Something along those lines? :D

[Dannie Jost]

Touchée!

I like that field much better than the track. It is still about scoring the goals ain't it? But then, that is how to run a business.