John Treadway

So Jerry Yang has stepped down as CEO of Yahoo!  This is no surprise.  Yahoo! has been floundering for quite some time, and Jerry's much-vaunted return did not have the same results as the Steve Jobs or Michael Dell Parts Deux.

In many ways Yang had a much easier job than either Jobs or Dell, but he still punted it.  Dell hasn't lit the world on fire, but you don't see him getting creamed by the press at every turn.  Yang went mano a mano against a carnivorous Steve Ballmer and made just about every wrong move in the book.  Now, I never really understood the MSFT/YHOO merger idea at all anyway.  MSFT really should be focused on the cloud thing as the future of the platform and apps business and let the ad business swirl around them.  Steve's not listening to me anyway, but my gut tells me Microsoft should extend their value proposition along the lines of strenght.

So, here's my recommendation for Yahoo!  Hire someone who doesn't feel inferior about themselves.  Yahoo is arguably the most undervalued property on the web because they are too focused on competitors and not focused enough on customers.

Yahoo search is okay, pouring billions into competing with Google is just stupid.  Yahoo content – with their Sports, Finance and other great properties – is the crown jewel.  Partner for search if needed – and just keep sucking away at whatever value proposition is left in the newspaper business.  Who needs the Boston Globe if Yahoo can get better at local content.

Start with Yahoo! today, add a regional focus much like Craigslist (http://boston.yahoo.com anyone?), and hire local writers and editors to stoke the engine.  Sports, money (perhaps buy the bizjournals.com businesses?), jobs, news, culture, etc. 

Yahoo could pwn the Globe and all other regional properties.  They could even use some technology to allow people to create their own "morning paper" that can be assembled into a PDF and printed at home (for those who like to have the paper in their hands).

Okay, Yahoo – hire me for CEO!

With the enterprise IT marketing going to hell in a hand basket, many people are asking what they can do now to keep the wheels on the bus.  One way to make sure you stand out is to shift the efficiency vs. effectiveness formula in the direction of effectiveness.

That means that everything you do needs to be more about being effective than just being efficient.  A horizontal sales and marketing focus is efficient.  You can hit lots of companies in lots of markets with a horizontal technology message — bits, bytes, flops and all the rest.  But, you can’t be very effective in any one customer segment with this approach.

Verticalizing your sales force is pretty expensive, and depending on the size of your operation, may not bring you the effectiveness you’re looking for.  Before going that route, consider verticalizing your marketing.  What does that mean?

Let’s look at what marketing means.  In a classic sense, it’s the “four p’s” of product, pricing, placement and promotion.  Let’s take each one in turn.

Product
Even a horizontal product can be given some vertical content.  At Sybase we had an also-ran application server (Sybase EA Server) which had little or no chance against WebLogic, WebSphere and other app servers.  In 1998 we decided to add some vertical content in the form of financial messaging – FIX, SWIFT, OFX, etc.  Voila!  We now had something to sell to our customers in the financial vertical.  There is not a doubt in anybody’s mind who was involved with Sybase Financial Server that we had a big impact on moving the horizontal application server with this strategy.

There’s also the third-party add-ons to your product if you can find them.  Sybase made a lot of money being resold inside of trading and risk management systems on Wall Street.  These were database licenses that they would not have gotten otherwise.

Pricing
This one is harder.  It’s not easy to charge different groups of customers different prices for the same product.  In some markets it may even be illegal.  Skip pricing…

Placement
For enterprise tech, this means channel.  You can impact placement by recruiting vertically embedded channel partners – integrators with a focus on a key vertical such as healthcare or government.  Service partners with vertical specialties are incredibly valuable in penetrating markets.

Promotion
This is really the content and promotion section.

Most horizontal technology products and services vendors have some content on their site about their markets or “industries” they specialize in.  Most of it is crap.  It’s a throwaway that RBS uses your security solution, or that Verizon embeds your linux in their switches.  That they bought from you is no big deal.  What’s often missing is anything about your specific differentiation related to a customer’s market.

For example, if your columnwise database format makes realtime risk calculations 10x faster, driving more profitable algorithmic trading – that’s relevant!!  Or if your security products have been certified for standards specific to the target industry – fantastic!

The promotion side – programs such as PR, advertising, events, direct, web/emarketing, etc. – can be a big area of verticalization.  While your competitors spend money fighting their way into the same 5 CRM publications, you could be getting coverage in American Banker, or Securities Information News.  Instead of buying a booth at “Enterprise 2.0″ and other lame-o horizontal tech chose (ugh – LinuxWorld!), how about sponsoring a Wall Street CIO breakfast or showing up at the SIFMA conferences.  Be careful though!  Don’t bring your horizontal game to a vertical playing field.  You need to target your message in your programs too.

Being more effective at vertical marketing is more work than most people understand – and the results are predictable for those who do this halfway.  However, if you take a wholistic approach to vertical markets and do it right, perhaps you’ll establsh a leadership position in a key segment that helps you weather the downturn.

We all know that this economy really stinks (sorry John McCain, but the fundamentals are not strong).  As expected, layoffs are accelerating, with Sun, Fidelity, Citi and thousands of other companies shrinking their staffs.  In a booming economy, the people getting let go are often the ones with less value to add.  Marginal performers, no matter how people try to spin it, are the first to go in     any group.  Watch the next 10 days — a lot of layoffs are going to happen before Thanksgiving.  Then watch the first 2 weeks of December as more companies take headcount off the books.

When the economy falls off a cliff the cuts go deeper.  Goldman Sachs is projecting unemployment at 8.5% by the end of next year – and that number under-reports the real level of unemployment because a lot of people stop looking for work and don’t get counted.

Now you’re into muscle and bone – and even great talent starts finding themselves out of work.  Further, there are fewer great jobs for them to transition into.  Sure, really great people can almost always find a job.  But it might not be the kind of interesting, game-changing work that they had been doing previously.   Think about it — a whole lot more people will lose their jobs this year, and more still again in 2009.  So many of them will get frustrated in their searches and be looking for anything to keep them in the game.

This is when the creative ones start companies, or join others who are getting a new idea going.  If you can live without steady income for a few quarters while you build out your new thing – perhaps contracting (good luck finding projects) and doing the start-up in the evenings and on weekends – you might find that you both enjoy it more and potentially have a big payoff when the market recovers.

If  you  happen to be in a company that’s still growing and looking for people – raise your standards.  You no longer have to settle for someone else’s second best.  This is the time to build truly great teams.  In some cases you can even use the talent displacement to “upgrade” your team by letting go of the bottom tier of your company and hiring in the great ones looking for work.  It may sound harsh, but if you’re running a business, division or department, you have an obligation to make your team as strong as possible.  It’s getting a lot easier to make that change now and the window won’t last forever.

So, what can you do?  Get behind the wheel and drive if you have the the personality.   But fasten your seatbelts – it’s going to be a bumpy ride.

Last night I went to a reunion celebrating the 20th anniversary of the founding of Object Design, Inc. (now part of Progress Software).  I joined ODI as an intern in 1991 while at Babson because a friend at The Weber Group (Larry Weber's PR firm from the 90's) told me I should take a job there scrubbing the toilets if I had to because it was such an amazing company.  I only had to work in the mail room, (no, I'm not joking – I literally stuffed and mailed out collateral) but I got my high-tech start there and left in 1996 after product managing the launch of the ObjectStore ODBMS for Windows.

ODI, as we called it, was a rare company.  The intellectual talent across the company was as good as you'll ever find (and I've yet to find since).  Any one of the engineers at ODI would be the "guru" at 99.9% of other software companies out there.  The stuff they did was just mind-numbingly great.

More importantly, the culture there was just as amazing.  People would go out of their way to help each other be successful.  The sales people and engineers and marketers all worked together to build a great business.  While the management team was part of that, the culture at ODI was more from the bottom up than top down.  You saw it in the hallways, when people went into their colleagues' offices (we all had offices – very few were in cubes and often just temporarily), and in the lunch room.  Nobody was disrespected, and very few honest disagreements turned acrimonious.

The culture stayed that way until just after ODI was named as #1 on the INC 500 list of fastest growing private companies.  Oracle offered $100M or so to buy the company, but the management team turned it down (I was not on the mgt team).  We were going to crush Oracle, certainly!  Oh, the arrogance.  You know what happened next… we started missing our quarterly numbers.  Eventually the investors took over and kicked out the old management team, cut salaries and let go a good portion of the company.  The culture was gone then, but not forgotten.

Looking around last night I saw many familiar faces.  Sure, we all looked a bit older, but most were still looking great after all this time.  Funny how all of our stories to each other last night were about all the good times… the big early deals, the technical breakthroughs, the demos at OOPSLA, etc.  A lot of people came out last night – more than I expected.  One of the ODI Germany sales guys even tried to find a flight in but couldn't afford the 1,000 Euro airfare from Frankfurt.

The number one refrain I heard last night was how nobody had landed somewhere that special again in their careers.  Someday I hope to be in a situation where I'm surrounded by so many awesomely talented and truly great individuals.

I guess there are two such times.  Immediately after 9/11 when the country rallied, the stock market reopened, and the world realized that even attacks as big and disastrous as those perpetrated on that day would not, in the end, damage the idea that is the United States.  A few years later that feeling had been replaced by bewildering shame and fear of what we had become under George W. Bush.

The time before that was in the mid-1980s.  I was living in NYC less than a year out of college.  The "Reagan Revolution" was well underway and America was emerging from the 14-year cave that characterized the post-Vietnam War, post-Watergate era.  We were finally starting to feel good about being Americans.  Say what you will about Reagan, but he did give us this.

One memory of that time stands out above all others for me.  I was out with some friends at a microbrew pub called the Manhattan Brewing Company (if I recall correctly).  This was a great loft-style place somewhere in or near the Village, with picnic benches and huge bowls of peanuts in the shell.  It smelled of beer (naturally) and the crunch of peanut shells as people walked through the room was pretty loud. 

In any event, at one point someone stood up and started singing God Bless America, loudly enough that most in this cavernous room could hear him above the hubbub of 500 half-drunk "conversationalists."  By the middle of "Land, that I love…" most everybody in the room was standing.  And singing – or screaming – the rest of that wonderful song.  By the end of the second "home, sweet, home" most people – men and women – were crying openly.  The feeling was sort of a religious rapture.  Right then and there over 500 people resolved to relegate the self-hate of the 70's and early 80's to the dustbin of history.

That was how I felt at 11PM EDT last night.  I, along with countless millions across this great country and around the globe, remembered how it feels to be proud of America and to be inspired to be a better person.  Last night brought back the memory of that night in 1985 in NY, and relegated it to a footnote.  More than 200 years after the framers of our Constitution settled on a compromise that protected the rights of Southern landowners to own slaves in order to form a single country, we have finally moved to a world where "all men are [truly] created equal" and Americans have shown that they will value the quality of a person's character above the color of their skin.

Change, indeed!

Twas the night before election day, when all through the house,
Not a voter was stirring, not even an ACORN mouse.
The chads were hung by the Diebold machine with care,
In hopes that St. Obama soon would be there.

The democrats were nestled all snug in their beds,
While visions of super-majorities danced in their heads.
And Barrack in his 'kerchief and Michelle in her Change cap
Had just settled down for a 10 minute nap.

When out on CNN there arose such a clatter,
I sprang from my bed to see what was the matter.
Away to the laptop I flew like a flash,
Launched IE and Firefox and prayed for no crash.

The moon on the breast of the new Google logo
Gave a luster of payday to investors below.
When what to my wondering eyes should appear,
But a miniature poll and eight tiny pundits with beer.

With a snarky new striver, so lively and quick
That I knew in an instant this must be an RNC trick.
More rapid than cruise missiles her zingers they came,
And she whistled and and shouted and called them by name.

"Now, Plumber! now, Sixpack! now, Rush and The Right,

On Malkin, on Hannity, O'Reilly, let's all speak of Wright."

To the top of the polls, to the win for this Fall,

Now dash away, dash away, dash away all.

Okay… I've run out of time… Someone finish this for me!!!