Silvexis » Software Development

Withholding features as a Competitive Strategy

Erik — Tue, 21 Jul 2009 15:57:14 +0000

When Apple announced what was coming in it’s iPhone 3.0 software update it activated a hidden marketing weapon that it had deployed the day the iPhone was released. Was it a secret feature that had gone some how unnoticed? Actually quite the opposite, it was a missing feature that Apple had been very openly criticized for: No copy & paste.

When the iPhone first came out, many of my friends could not believe that the iPhone did not have copy & paste. What was Apple thinking they cried. How could they have left out such a simple feature? Personally I didn’t really miss it, but they did have a point, why leave out something so basic?

It certainly wasn’t the first time Apple has left features out of their products. Some see this as a relentless pursuit of minimalism, that’s true but I think there is more to it that that. Apple just doesn’t release features that are not ready, even if that feature is super important. If a good solution doesn’t exist, they wait until they find one.

As a consumer you might think this makes perfect sense, but having been on the other side I can tell you that it’s not easy for a company to hold features until they get them right. Customers are relentless in their demand of features and companies more often than not will do anything to make them happy. The pressure that sales & support teams and even CEO’s can exert on product teams to add that feature to the “list” can be unbelievable and your R&D team might even run off with the best intentions and just start building it. The pressure and good intentions would be great if it were not for one simple fact: the customer is seldom if ever right when it comes to talking about what they need.

If you are a customer and you are reading this, bear with me for a moment.

Customers know their problems and daily pains passionately and often in great detail (if you take the time to ask them, a lot of people don’t), but they almost never know what the right solution is. This is where good product managers can make a serious difference in the success of a business. They have to know their customers pain to the point where they feel it themselves and then take that pain and share it with R&D where the right solution can be developed (but not in a vacuum! You have got to get feedback from your customers during the design, but that’s a different blog post).

So what does this have to do with competitive strategy? Apple clearly understands their customers pains and what features they can and can’t live without. If they didn’t then the iPhone would not have been a blazing success but I think they revealed something even more powerful when entering into a highly competitive market – the strategic withholding of features.

When you are in a highly competitive market, either one that has become commoditized or one where the existing players are heavily entrenched and have already huge market share there is one word every product strategist has to focus on first – differentiation. Your product has to be better as well but if you can’t find a way to stand out in front of the crowd it’s pointless (for example why the Palm Pre is on the path to failure) . Now I used to think that only new, unique things that you could do that your competitors couldn’t was the only way to differentiate but Apple has proven otherwise. The features that you don’t have that your competitors do is just important and sometimes it’s best to withhold one or two that are obvious like copy & paste.

The withholding of features does more than just check the differentiation box, it takes advantage of several other important tactics in competitive strategy such as pushing competitors to react and anticipating their moves. If you can force them to react and you know how they are likely going to respond you have all the makings of a perfect trap.

When Apple withheld copy & paste (regardless if they knew this in advance or not) they found a way to differentiate that would generate a lot of attention, pushed their competitors to respond because they couldn’t resist pointing out they had this feature. Apple only needed to wait until the attention and demand for copy & paste reached the right level to spring the trap. What Apple’s competitors didn’t realize is that they were unknowingly building the market for Smart Phones that had copy & paste, making what was once a minor issue into a big deal, a must have feature. Everyone was talking about it, the reviewers were all pointing it out. Ask consumers everywhere why they hadn’t bought an iPhone and they would almost certainly mention the lack of copy & paste. Apples competitors were laughing to themselves “Ha ha! we got Apple right were we want them!”. Unfortunately for the competition, they had just set up the perfect “conditional close” for the iPhone and had walked into the trap totally unaware.

And then the 3Gs came out. It’s Apples most successful selling iPhone ever and it has copy & paste.

As a word of warning to any marketing team, never, ever, market a feature up that you can’t defend through at least 2 (maybe more depending on your market) of your competitors product release cycles. (one of Erik’s rules of competitive marketing – something for another blog post)

The takeaway here is that as a product strategist, marketer, product manager or program manager (whatever your company calls you), when you are competing there is always another box to be thinking outside of. Take a look at your product road map, pick a few features that you know your competitors already have and you know will make a big deal of but don’t stop your product from being instantly eliminated from the shortlist. Pick ones that you know are not addressing the top pains of your customers but you can quickly release when they become a sales issue and withhold them. If you are certain about how your competition will react you might even build them and hide them, waiting for them to fall into the trap.

Predictions on the upcoming Apple Tablet

Carbonite – Not Ready for the Real World

Erik — Thu, 18 Jun 2009 18:34:24 +0000

A few months ago I decided that I needed to add an offsite option to my backup plan (I use the amazing CrashPlan+ to backup everything to my home server but what if my server gets stolen or bursts into fire?). To solve my problems I went looking for an offsite “in the cloud” backup solution. I considered Mozy, Carbonite, DropBox, CrashPlan+offsite and iDrive. Right away I had to toss out DropBox, CrashPlan Offsite and iDrive, to backup the volume of data I had I would be paying in some cases more than $1000 dollars a year.

So this left Mozy and Carbonite and I decided to give Carbonite a try first.

The first week with Carbonite was great. The backup speed was awesome. Carbonite was installed on my laptop and plugged into a 10Mbps link, I had all of my data (about 30GB) backed up in a few days if not less (or so I thought, more on that later). I didn’t notice any issues and in general things just seemed to work. I’m a big fan of simplicity when it comes to backup software. I don’t need a lot of options, I just want it to backup everything I tell it to and not bother me. (CrashPlan does this really really well btw).

After about a week with Carbonite on my laptop I decided to install it on my home server. At home I had a 512KBps upload speed (Comcast) but that was still pretty good. Again no issues and it seemed like it was backing everything up so I was happy. By the time my trial was about to run out things were still flying along so I decided to buy Carbonite.

At this point I was traveling a lot so I didn’t get a chance to check out my home server for 2 weeks, I assumed when I got home I would find hopefully most of the backup finished. When I did finaly check my server I found that it had backed up about 170GB but now seemed to just barely moving along. Whats more, this time I looked a little closer and noticed that the amount waiting to back up didn’t add up to the amount of data I had on my drives.

Performance Issues Emerge

I started with the performance issue. It looked like I was uploading at about 128Kbps, I thought maybe my provider had throttled me down but other uploads flew at ~512Kbps. Next I thought maybe Comcast was specificly throttling Carbonite. I had AT&T DSL as a backup at the time which I switched over to but no luck, still the same speed issue. Not sure what was going on, I decided to put that issue on hold while I went and figured out why all my files were not in the backup queue. What I discovered started to really worry me.

Not all my files were being backed up!

I found that Carbonite has a file blacklist that blocks specific file types from being uploaded. No where does Carbonite tell you this, nor is this blacklist available in the UI, you have to go searching for it on the web. Carbonite does not release this information easily, you have to request it. Look closley at that list of excluded files BTW, you will notice that .key files are blocked. My server is a PC but my laptop is a Mac where I use Keynote, guess what file extension is used by Keynote? Yep, I found that none of my presentations (as of April 2009) had been backed up, this could have been a disaster.

So I decided this was a good time to try Carbonite support, I wanted to know how to turn off this blacklist and backup ALL of my files. This was an unlimited backup right? Unfortunately Carbonite support was not too helpful. There was no way to turn off the blacklist and if I wanted to backup my Keynote files, I would have to remember to right click on each one and mark it to be backed up. Thats strike #1.

I dug in more and found that none of my VMware images and ISO images were being backed up. (I don’t keep any CD’s or DVD’s, even data CD’s laying around, when I buy software I immeditly make a backup copy and put the orginal in storage) – Strike #2.

Back to the performance issues

Customer support is often the most overlooked yet the single most important thing a company can invest in. Unfortunately for Carbonite, this is where my experience with their customer support put the final nail in the coffin on Carbonite for me. Strike 3, your out.

So what happened? I started my conversation with Carbonite on 5/28, here is a rough summary and timeline. Check out how many different support people I talk with over 2 weeks, at no time during this exchange does anyone actually help me troubleshoot the real problem!

5/28: Me -> Carbonite: Backup is slow.

5/30: Carbonite (Shirley) -> Me: It’s your Internet connection, we benchmark against our competitors and we know we are the best

5/31: Me ->Carbonite: It’s not my connection, I have two, and they both won’t upload fast to Carbonite. In 47 days I’ve backed up 238 GB, but at the current rate it will take almost 60 days to backup the remaining 57 GB, WTF? I want a refund.

6/1: Carbonite (Shirley) -> Me: We don’t give refunds, you agreed to our terms of use, and you got to try before you bought, so it’s your fault.

6/1: Me -> Carbonite: Seriously? You are telling me this is all my fault because I agreed to the terms of service? How about actualy helping me with the problem I reported: It’s slow now, it was lightning fast during the trial! (I cc’d David Friend, CEO of Carbonite on this e-mail)

6/2: Carbonite (Thomas) -> Me: David asked me to contact you, please send us the Carbonite log files and we will try and help (This is done silently BTW when you submit a customer support request via the Carbonite application!)

6/2: Me->Carbonite: Here are my logs.

6/4: Me -> Carbonite: I sent you the logs a few days ago, did you get them yet?

6/5: Carbonite (Shane) -> Me: No, we didn’t get them, can you do it again?

6/5: Me->Carbonite: Here are my logs…again.

6/5: Carbonite (David R.) -> Me: We benchmark against our competitors, we know we are the best BUT we might make tradeoffs and allocate bandwidth differently across our customer base. (Um where did this response come from? Out of the loop David?)

6/13: Carbonite (Maggie) -> Me: We got your logs but there is no request, what help do you need? (I was instructed to only put the ticket number in my request)

6/13: Me->Carbonite: Are you guys a bunch of idiots? The ticket number is in the request, why don’t you go look it up?

6/15: Carbonite(Maggie) ->Me: “+ADw-html+AD4APA-head+AD4APA-style type+AD0AIg-text/css+ACIAPg-p +AHs-margin-bottom: 0+ADs- margin-top: 0+ADsAfQA8-/style+…” (this is the actual first line of a ~200 line e-mail I received from them)

6/15: Me->Carbonite: Wow, you guys are hopeless. You just sent me a bunch of jibberish. Any chance you might help me with my problem now?

6/15: Carbonite(Rosanne)->Me: Hi, Jeff Robison, VP of customer care asked me to contact you. Sorry about that e-mail, one of our senior Mac technicians will contact you (Ummm, yes, but the computer i’m having issues with is a PC?)

6/15: Carbonite(Marshall)->Me: It looks like yesterday things were working but have stopped. Are you using time machine? Do you use WiFi? I will be handling this case from here on out.

6/15: Me->Carbonite: Ummm, the computer i’m having issues with is my PC not my Mac and BTW, I just rebuilt that system from scratch and reinstalled everything to make sure you have a clean environment. Oh and it’s on Gigabit ethernet.

6/16: Carbonite(Marshall)->Me: Please restart your computer, Carbonite hasn’t established a connection since the 14th

6/16: Me->Carbonite: Are you SURE about that? It’s backed up 0.4 GB in the last 24 hours and Carbonite is reporting it’s backing up right now. I’ll restart, but I think the information you have is wrong. Again, I have a PC.

6/16: Carbonite(Marshall)->Me: Did you just upgrade to Mac OS 10.5.7 recently? I am still not seeing any connections.

6/16: Me->Carbonite: Seriously? Are you reading my e-mail? I said I HAVE A PC.

And that was the last I heard from them…I uninstalled Carbonite from all my computers today.

The Verdict

If you have a lot of data and consider yourself a “Power User” stay away from Carbonite. Seriously, would you trust a company like this with your data? Hidden restrictions and horrible customer service are bad enough if you are talking about regular software. When you are talking about a service that has all your data and manages it remotely it’s out of the question.

As a side note, I think the limitations that Carbonite has made to their service are likely acts of desperation to control their bandwidth costs and I doubt they saw bandwidth as gating issue when they put their business model together. With storage cheap and CPU perforamnce plentiful the one remaining bottleneck to the adoption of cloud computing and “in the cloud” services is bandwidth. If I’m right and cloud computing continues to grow the ramifications on the computing industry will be more far reaching than anyone has perdicted with ripples that could restart the telecom industry. This is deffinitly a topic for future research.

As for offsite backup, I just wish the price would come down on CrashPlan+ and their offsite option.

Update: I just received the following e-mail from Carbonite Support:

6/21:Carbonite(Pam) -> Me: “+ADw-html+AD4APA-head+AD4APA-style type+AD0AIg-text/css+ACIAPg-p +AHs-margin-bottom: 0+ADs- margin-top: 0+ADsAfQA8-/style+AD4APA-/head+AD4APA-body bgcolor+AD0AIgAj-ffffff+ACI- style+AD0AIg-background: +ACM-ffffff+ACIAPgA8-br+AD4- +ADw-font size+AD0AIg-2+ACIAPgA8-div style+AD0AIg-width:100+ACUAOw-word-wrap:break-…..”

It just keeps on getting better and better!