Runsmall

OSBC 2009

The Open Source in Business Conference is less important and interesting as time goes on.

Five years ago, there were real questions about using open source software in the enterprise. Corporate decision makers came to OSBC, and so did top-tier open source developers. There was tension in the air, and real judgments were forming. Serious thinkers gave keynotes.

This year, the big questions about open source are settled. The conference has devolved into part tutorial for late adopters, part infomercial for open source vendors targeting the enterprise.

Even so, this year's OSBC attracted a respectable bunch,and I don't feel my time there (I only went for the first day) was wasted.

I skip most keynotes at conferences. They are trailing indicators at best. None of the keynotes I went to at OSBC did anything to disprove that notion.

The venture capital panel renewed my faith in the resiliency of American enterprise - Peter Fenton of Benchmark predicted stock prices dropping well below current levels, hyperinflation, and excellent opportunities in cloud computing and other "air war" plays where the open source advantage of reduced marketing friction and low-touch high volume distribution come into play. 

Dries Buytaert, founder of Drupal, gave a superb tutorial on managing open source communities, marred only by the use of what were apparently his own photos for illustration. I wish he'd take a page from Steve Jobs or Edward Tufte.

High point: 

Dirk Riehle's rigorous research into applying open source principles to commercial software development. This sparsely attended session was a hidden gem, providing real insights into the nature of open source projects and a lot of food for thought.

Low point: 

In the Open Source Marketing panel, Roy Russo of LoopFuse saying "I yanked the open source ... there was no money in it." So what's he doing on an open source panel?

Using Web 2.0 to promote a small business

When we went to Kenya and southern Ethiopia for three weeks, we boarded our office dog at San Francisco's Pet Camp.

Pet Camp is a decidedly traditional small business - it's a boarding kennel for dogs and cats. But Pet Camp knows how to use Web 2.0 services to promote better customer communications while reinforcing their primary message.

Pet Camp's web site sports a clean, friendly design. Whimsical menu links remind us of Pet Camp's main value proposition: your pet will have fun at Pet Camp. The pages are clear, well written, and thorough without being overwhelming. They are illustrated with high-quality photographs. The overall mood suggests love of animals and enjoyment of their happiness - just the things to appeal to a guilty owner sending her pet to a boarding kennel.

This alone would be excellent marketing, but it's just the beginning. Through adroit use of digital cameras and free Web 2.0 services Pet Camp provides ongoing, individualized, targeted proof to pet owners that their pets do have fun.

Camper Cameos is Pet Camp's blog on Blogger.com. Pet camp employees post to this blog several times every week. The posts are all the same - a picture of a happy-looking pet and one sentence including the word "fun". Blogger allows limited photo storage, so the word "fun" links to a Flickr album of up to three hundred pictures of cats and dogs. The dogs are photographed during outdoor playtimes, so the animals are invariably upbeat and excited.

This is brilliant marketing and customer relations. The key unspoken fear of the pet owner - my pet will be neglected or mistreated while I'm away - is entirely refuted by a picture of her own animal in a happy situation, overflowing with excitement and enjoyment. And it's all done using mature, well-designed services that are simple to use and free - no special expertise needed.

Could Web 2.0 services help your business communicate better with your customers? You have to balance the benefits against the investment in time and any possible drawbacks. My own business is so fundamentally associated with the confidentiality of my clients' information I cannot conceive of communicating with them in a public or semi-public way. But for most businesses, these services could be dynamite as a way to stand out against competition that is often stuck in old ways of doing things.

There is no SMB market

Why do people who should know better continue to talk about an "SMB market"? The notion that all small and medium businesses taken together make up addressable market is ludicrous on its face. I won't even discuss the even sillier European notion of the "Small and Medium Enterprise".

The best definition of market I know comes from the indispensable Crossing the Chasm by Geoffrey Moore. He defines a market as:

• a set of actual or potential customers
• for a given set of products or services
• who have a common set of needs or wants, and
• who reference each other when making a buying decision.

Moore goes on:

Getting the last part - the notion that part of what defines a high-tech market is the tendency of its members to reference each other when making buying decisions - is absolutely key to successful high-tech marketing.

Moore acknowledges that people often use market to mean simply the aggregate sales of a product - and points out that this definition is useless for marketers:

Most importantly, market, when it is defined in this sense, ceases to be a single, isolable object of action ... and cannot, therefore, be the focus of marketing.

... Marketing professionals insist on market segmentation because they know no meaningful marketing program can be implemented across a set of customers who do not reference each other.

Does anyone seriously think that a decision maker at an aerospace manufacturer with over 400 employees references the owner of a pizza shop with 18 employees when looking for new equipment or services? That they even have a common set of needs or wants?

Enterprise-focused vendors know that the products, processes, and positioning they use for enterprise customers will not work for smaller customers. They use the term "SMB market" because they want to skate by with just one additional segment to manage. They don't understand the diverse nature of small businesses, nor do they want to. They don't recognize that small businesses are as different from medium businesses as medium businesses are different from enterprises. This intellectual laziness will cost them.

So get this: small is distinct from medium. They are sets that do not intersect. And small businesses are far more diverse than enterprise or medium businesses. They exist at every level of complexity and sophistication, have different sets of wants and needs, and form many separate reference groups.

There isn't even a single small business market. There definitely no such thing as an SMB market.