Only the Paranoid Survive

There are 2 posts tagged Only the Paranoid Survive (this is page 1 of 1).

#69/111: Marketing High Technology

What is it about?

We are in 1986. Windows 1.0 will be released in a year and high technology is mostly the  semiconductor industry. William H. Davidow worked for Intel and fought several wars. He explains what is important and why marketing is civilized war.

What can I learn?

Go for defensible market segments: Unbelievable important principle which executives/entrepreneurs often don’t get. What does defensible mean? Firstly, just releasing a product isn’t entering the market. You have to gain customers and establishing your product. Davidow estimated that it takes about 0.7 times the sales volume of the market leader to enter a market. Visualize this. If the market leader in your market segment makes $25mio in sales, you will need approx. a $17m investment just to enter the market. Secondly, you have to defend your position. In the mid- to long-term the two or three leaders dominate a market. If you can gather at least 20% of the market, you will probably vanish in the mid- to long-term. In conclusion, look for an appropriate market segment (i.e. which you can enter), gain enough customers and fight the war!

Create great products, not just great devices: Devices are your fundamental offering, e.g. the code for your software. However, a product is your device plus its marketing (positioning, usability, UX, etc.). What does this mean? If you know a techie, you probably had a discussion over the iPhone/iPod. He says that they are inferior to product X because they don’t have feature Y and Z. This is device stuff. Does the mass care about that? No. They care about the product. It is easy to use? It is trendy? Who else uses it? This takes us back to Baked in. You’re device and marketing have to work together and create a whole product.

Install Marketing Quality Management: If you read the previous paragraph you know how important marketing is. Therefore you should assure the quality of it. It begins which checking the positioning of each product to helping internal cooperation. Only if your marketing and device development are working hand in hand, you can create a great product.

Conclusion

Marketing High Technology was written in 1986. Yes, it about 25 years old and kicks ass of most books released today. This book showed how awesome Intel works like in Only the Paranoid Survive. If your business creates product, this is a must read. There is so much insight which is seldom used today. Recommendation!

#26/111: Only the Paranoid Survive

What is it about?

How do you change a company? And how do you avoid being overrun by new forces? Andrew S. Grove explains how Intel changed from a semiconductor company to a microcomputing company.

Key points?

Strategic inflection point: Grove defines a strategic inflection point as a point or period in which a force (see Porter five forces analysis) gets 10X stronger. For example, in the 80s, the Japanese memory industry grew very fast and got very cheap. This was a gruesome experience for Intel because they were known as the memory company in the USA.

Always observe your environment: To avoid being overrun by such changes, you should always observe your environment, i.e. your customers, competition, new technology, your suppliers, etc. Only if you can see emerging 10Xs you can act fast enough.

Is it a 10X or isn’t it? There are a lot of changes but which are important? Ask your employees, customers or vendors. Often the CEO is the last one to see a change. If you think that one of these 10X forces isn’t really one, don’t discard it. Observe if it changes and then valuate it again.

Change from top and bottom: You can’t force a change from the top, but also can’t form a cooperate strategy from the bottom. It is important that you use both forces to carry out the essential modifications.

Conclusion

This is a excellent book on changing a company. Andrew Grove recounts his own experiences and don’t try to please everybody. Half of the managers quit the company because they don’t wanted to change. The other 50% had to reeducate themselves. Changing a company isn’t easy and there will be casualties but it’s better than completely vanishing. Clear recommendation!