What hackers don’t know about business

http://blog.filepicker.io/post/28881520162/what-hackers-dont-know-about-business

by tagx • 14 years ago

122 50 14 years ago

blog.filepicker.io

ananddass6• 14 years ago

The easiest way to grasp the difference is to think of the Attention-Interest-Desire-Action paradigm.

This link has a basic primer http://en.wikipedia.org/wiki/AIDA_(marketing)

pizza• 14 years ago

Theoretically (and likely), this could be applied to anything that involves convincing: politics, debate, etc., of course with different media of action e.g. voting. This is basically all you need to know about marketing, the science of interest.

fredsters_s• 14 years ago

Very true.

mindcrime4• 14 years ago

Marketing is about getting the word out. Think about ads and blog posts.

That just sounds like advertising & PR. There is a lot more to marketing. To crib the definition from Wikipedia (which sounds pretty close to the one I learned):

  Marketing is "the activity, set of institutions, and 
  processes for creating, communicating, delivering, and 
  exchanging offerings that have value for customers, 
  clients, partners, and society at large."[1]

From the same page, another way of looking at it is:

  Marketing is used to identify the customer, satisfy the 
  customer, and keep the customer.

"Getting the word out" is important, yes, but that's not all there is to marketing.

[1] http://en.wikipedia.org/wiki/Marketing

ananddass6• 14 years ago

Agree that marketing is not just about getting the word out. But the hard thing about the definition you quoted is that it doesn't lend itself to focus. Its too all emcompassing and things like "satisfy the customer" could include awesome product development and customer support.

stfu2• 14 years ago

Well, that is probably core to marketing. It is not just an isolated instance but only if all parts are up to par it can make its optimum effect. A shitty product and a shitty customer support will (almost) always sabotage a brand to such a degree that even the most wonderful ads won't help. Even if it succeeds in the short term, somebody else who is taking a more holistic approach should be able to gain significantly on marketshare.

jgamman• 14 years ago

School of Henry Ford Advertising: Model T for less than a $1000 Marketing: If I can figure out how to make a car for less than $1000 I'll sell millions

hartleybrody• 14 years ago

I've found that there are generally two definitions of what "marketing" really entails:

1. Generate brand awareness, get people interested in your product and bring in leads/customers (depending whether you're B2B of B2C)

2. One that includes all that, plus the market research necessary to figure out how to do all that stuff

For lots of startups, the second part is really part of the entire product/customer development cycle, where product managers figure out what the customers need and how to talk about it in their language. This leaves the "marketing" people to really just focus on the more narrow definition. But in more traditional businesses, lots of that market research falls under the label of "marketing."

As a guide for hackers, the most important two marketing activites are "getting the word out" and optimizing your funnel from visitor to lead to customer.

stfu2• 14 years ago

I can't resist referencing here: http://en.wikipedia.org/wiki/Outline_of_marketing#General_ma...

There is so much more what falls under the label marketing. From Pricing, Distribution all the way to Data Analysis. I really like the definition posted by mindcrime/AMA's.

dglassan2• 14 years ago

Getting the word out is only a fraction of what marketing actually is. Marketing involves:

- defining who your customer is (demographics, income, etc.)

- gathering feedback from the customer through surveys

- using that information to iterate on products/launch new products that solve your customers pain points (if half your customers are left handed this will tell you that you need to design your product for left handed people as well)

- packaging and designing how your product will look on the shelves

- defining price points based on the data you gathered from your surveys

Not to be a jerk but it sounds like the author of this post hasn't even taken a Marketing 101 course if he's defining marketing as writing blog posts...

ananddass6• 14 years ago

So traditional marketing 101 is geared towards larger companies with lesser operating uncertainity and more resources.

As a startup, the key question that helps prioritize between everything you mentioned is "what activities are hygiene activities, versus what are growth enhancers?". Defining your customer, gathering feedback, iterating on product and packaging all fall under hygiene activities. Meaning-if you dont get them right they will hurt your ability to grow. Pricing the product right and the rest of biz dev, marketing and sales activities are focused on enhancing growth. In a startup, the center of gravity for the hygiene activity is the product team (of course this depends on the type of startups). Thus, the job of the non product folks is getting the product found and getting folks to use the product.

tfb• 14 years ago

As a hacker, I've never taken a marketing class (or even a business class) and this all just seems like common sense to me. Pardon my arrogance, but it does seem to me like we hackers/coders are inherently better equipped for branching out into other areas of business than MBAs are at branching out into technical areas. That's not to say there aren't a high number of MBAs who can hack; it's just that a hacker's ability to quickly recognize patterns and manipulate systems to their will makes it a bit easier, whether it's code or the flow of information/relationships between people required for business/marketing.

yobbobandana• 14 years ago

Under a section labelled "Not understanding the differences", too.

saraid216• 14 years ago

PR is different from Marketing; PR, as I understand it, is meant for when people already know who you are and Marketing is meant for when people don't. In early stages, this is basically indistinguishable, so Marketing handles it.

riams• 14 years ago

Doesn't LTV stand for "[customer] life time value," i.e. the amount of money you'll be able to generate from a customer during his/her time with your business, and not "long term value"?

tagx2• 14 years ago

Typo. Thanks.

jmduke• 14 years ago

I've always seen customer lifetime value abbreviated as CLV. That being said, I've never heard of 'long term value', and I think the author is mistaking this term for CLV.

Customer lifetime value is something calculable, even if crudely -- its amortized revenue per customer as retention approaches zero. "Long term value" is more of a concept.

caw• 14 years ago

I picked up on that as well. Wikipedia seems to agree with us: http://en.wikipedia.org/wiki/Lifetime_value

I agree with their points, but overall the article is just a little bit "off". Maybe it's the bit about the integral. If you had a customer pay you $1 every month, and they on average stayed for one month, your LTV is $1, not the integral of 1*x (1/2).

nihonjon• 14 years ago

It really depends who you talk to. At Groupon EU, Japan, Korea and USA we called customer life time value "LTV".

Also, Avinash Kaushik, author of one of the best books on Web Analytic and previous Google Evangelist, uses LTV as well.

http://www.kaushik.net/avinash/analytics-tip-calculate-ltv-c...

bazookaBen• 14 years ago

when marketing Filepicker to enterprise users, how successful was referrals/friends/valley connections vs coldcalling, percentage-wise?

oinksoft• 14 years ago

Maybe somebody can translate the last paragraph into English for me. I read the preceding paragraph several times and I'm coming up empty:

  Based on our experiences at Filepicker.io we learned that 
  it is important to delineate the differences when
  planning initiatives that drive growth, the amount of
  resources needed and the profile of team members required
  to drive the initiatives.

While we're going for pompous titles, how about "What newly minted MBAs don't know about writing"?

brettcvz• 14 years ago

Sorry, I agree probably not the best-written paragraph.

Essentially:

* There are distinct focus-areas on the business side, just as there are on the coding side

* Identifying the differences helps us figure out what to do, when, and how

robertpateii• 14 years ago

"Understand the differences between these things, and don't mash them all together. They each have unique requirements."

ananddass6• 14 years ago

Very true. As startups with limited time and resources I tend to stick everything into the "lets figure out how to grow-lets do blogs, sell to larger customers, plan distribution hacks etc." It is important to decompose the business bucket and pick things that matter to my specific kind of business.

statictype2• 14 years ago

Translation: You need to figure out which demographic your business is targeting (large business, small business, consumers) and plan your marketing/sales according to that and have the correct people on your team depending on what your marketing/sales plan is.

I agree that it isn't very well worded but it does make sense.

rmserror• 14 years ago

a complexity theory error: "Just as you can reduce all NP hard problems to 3-SAT..."

you can reduce all NP problems to 3-SAT because 3-SAT is NP complete. you cannot reduce all NP hard problems to 3-SAT. for example, all problems in NP reduce to SUCCINCT-SAT, an NEXP-complete (and therefore NP-hard) set. good luck reducing SUCCINCT-SAT to 3-SAT (despite how little progress in separation of classes we've made, the time hierarchy theorem still indicates this is impossible)

xmpir• 14 years ago

great response! NP-problem discussions make me happy. for those not understanding a word: http://en.wikipedia.org/wiki/Boolean_satisfiability_problem#...

rkaplan• 14 years ago

I think the name "Filepicker.io" is severely limiting. When I hear "Filepicker.io", I think "easy-to-use library for handling user file uploads." That is rather narrower than their description of the service on their blog: "Filepicker.io helps developers connect to their users' content."

Don't get me wrong, I very much enjoy the Filepicker.io blog. I have never used their product, but from their website, API docs, and blog they seem like a well-run startup with a value-adding service.

Nonetheless, they are hurting themselves with such a specific name. It creates the negative perception of "Feature, Not A Company" that Mark Suster talked about on his blog: http://www.bothsidesofthetable.com/2011/08/22/fnac-feature-n...

tagx2• 14 years ago

We've realized that now and are in the process of changing our name. I'd love to chat with you about what you think of some of our ideas

kephra• 14 years ago

I'm not your customer (because I prefer own root servers over cloud services, and even prefer housing over hosting) - but I think you might stick with your name, because:

1. its a known (brand) name 2. it tells where your product is strong

But I suggest to change the Enterprise pricing tag:

1. Don't tell a price for enterprise. Enterprise customers have a high COCA, so price is always negotiation. 2. Offer enterprise features = Your services runs at their servers, under their control, not as a SaaS, but as a normal enterprise software that comes with installation support, consulting, ...

drivebyacct2• 14 years ago

This is why some schools are taking new approaches to integrating business and computer science curriculum. Their graduates leave understanding business basics, have worked in teams and even for clients on contracted projects.

allstruck• 14 years ago

I couldn't get past this sentence: "If it costs you more to get a customer then you can possible make from them, your business is going to fail."

Seriously learn some English man.

The worst part about this is you're arguing that programmers should learn business directly after stating that you argue about business managers not needing to learn programming... Seriously where is your logic sir?

Maybe you can write an article about why you think business managers do not need to learn programming (something I would agree with as a programmer), and make sure you have it edited before posting.

greghinch2• 14 years ago

I'll tell you what, I'd much rather be working amongst a team of engineers who are learning to run a business than a team of MBA types who are learning the ins and outs of software development. I'd put my money on a team of engineers every time too. But I also steer clear of anyone who describes themself as a "hacker". Code is a craft, MacGuyvering something together is no way to build a sustainable business.

tatsuke95• 14 years ago

And I'd put my money on a team of good people that doesn't involve members who are willing to type-cast a person based on his or her degree.

greghinch2• 14 years ago

Didn't say anything about degrees. Ultimately it's about people who know how to make things vs people who know how to talk about things. More often than not, in the software world that equates to engineers vs MBAs. I'd much rather work with people who can make and need to learn how to talk than people who know how to talk and need to learn how to make

nikcub• 14 years ago

Most hackers I know understand all this, but minus the fancy business school acronyms.

statictype2• 14 years ago

I would say there are many that don't ( I was in this pool until very recently). This is especially true of selling to big companies. Hand holding, dealing with RFPs, getting through to the right person inside to support you and getting involved in internal politics are mind-bogglingly frustrating and often not built on logic or rationality so it often doesn't make any sense at all to hackers.

guynamedloren• 14 years ago

> ...many in the software community don’t understand the differences between Marketing, Distribution, Sales, or Business Development.

Many in the 'business community' don't understand the differences as well. Not being an ass or making assumptions - I'm speaking from first hand experience here.

james1071• 14 years ago

Part of wisdom is knowing that the typical hacker and the typical customer are alien species, who cannot speak each other's language.

mindcrime4• 14 years ago

No they aren't. I wish people would quit perpetuating such nonsense. Promoting this belief just makes the problem that much worse and adds to the adversarial / antagonistic relationship between hackers and the rest of the firm (and the customers).

vilcans3• 14 years ago

So this is what business people mean when they say programmers need to understand business?

Apart from not knowing the exact nomenclature, it's embarrassing if programmers don't know these things. It's pretty much common sense.

But now we know.

So, when will business people understand software development?

mindcrime4• 14 years ago

So this is what business people mean when they say programmers need to understand business?

No. This is the thinnest sliver of a fraction of what business people think hackers should know about business. See the link above to the "outline of marketing," for example. Just marketing is a huge discipline with a very large body of knowledge... add in distribution, support, finance, business development, sales, etc., and there's a whole world of knowledge that a lot of programmers don't generally have.

Apart from not knowing the exact nomenclature, it's embarrassing if programmers don't know these things. It's pretty much common sense.

Sure, at the 60,000 foot level. But the devil is in the details.

Seriously, as popular as it is for hackers to mock "business people" and MBAs and business school, do you really think that business school doesn't exist for a reason? You think these guys just sit around and spew bullshit at each other all day, graduate, then go on to run successful, real-world businesses?

Business, especially at scale, is fracking complicated. And a successful technology company can't be all about just technology OR just "the business." You really need a holistic approach (which means somebody, or multiple somebodies have to understand the big picture) where technology and the "business side" complement each other.

So, when will business people understand software development?

Ya know, it would almost be fair for the business people to ask "when will software developers understand software development?" We, as a group, still don't do a good job of giving good estimates and delivering things that work reliably without constant hand-holding and patching. But, to be fair, that's often back to ill-defined requirements and unreasonable schedule pressure, which still - IMO - argues for the need for a holistic understanding of what's going on - that is, a shared understanding that's common to the "business people" and the hackers.

In fact, I almost wish we could get away from making the distinction "business people" and "technology people" (or "hackers") and drop the antagonistic, adversarial atmosphere that often seems to exist.

vilcans3• 14 years ago

> This is the thinnest sliver of a fraction of what business people think hackers should know about business.

This sounds like programmers need to know a lot about business. Of course knowledge is a light burden and all that, but do really programmers need to know that much outside their area of expertise? Isn't a shallow understanding enough? Otherwise, what would you need dedicated business people for?

> Ya know, it would almost be fair for the business people to ask "when will software developers understand software development?"

Good point! But then again, software development is difficult. It is hard if not impossible to estimate the schedule and cost of creating something that nobody has ever done before. And perhaps that is what the business folks need to understand. The tricky thing as a developer is explaining this without sounding like you're coming up with excuses for being late.

iblaine• 14 years ago

And the death of the word 'hacker' continues...

What hackers don’t know about business

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