Automotive industry trends

Automotive Industry is suffering changes, as other industries:

  • Speed of online purchases from other sectors (electronics, trips, retail, food…) is carrying over to car purchases. It’s very difficult to sell cars on-line and this requires to have car dealers around the geography.
  • More and more people research cars on-line as first step for buying, then they go to the store. This hybrid model is not enough to reduce costs.
  • The ‘Sharing economy’ is coming to the automobile sector in to main ways: car sharing and ride sharing.

There are so much reasons for the changes happening, being the main factors contributing to the reduction of car ownership these ones:

  • To own a car is expensive, so much expensive, specially in big cities.
  • Better public transport has improved a lot in the metropolis and less connections by car are required. You can use public transport plus ride/car sharing, so you satisfy all your needs without owning a car.
  • Socially, specially for young people, cars are less important than computers or mobiles.

So, a business model based on car sales growth is not possible anymore.

The solution? Diversify, how? I really don’t know, sorry I have not a crystal ball. What is clear is that:

  • The reduction of the automotive industry will continue,
  • The competition will be tougher and aspects as security, automation will be clear to enable the companies to compete.
  • Software companies will play an important role in the industry, partnerships on this area will be key to see how the competition evolves.

From USA to Europe, through Ireland

So many USA companies follow a common pattern when they want to start to compete in Europe: they basically do it starting their moves in Ireland.

From-USA-to-EMEAThe main reasons are :

  1. English, as common language so they can communicate well each other and start with UK as main market target. In the main cities there are too many immigrants from other European countries, so to find native employees from Germany, France, Easter countries, Italy or Spain is not difficult. To build a service center offering a multi-language capabilities is not a  big deal.
  2. Low taxes offered by the government: this is one of the attractive aspects offered and very criticized by other European countries.
  3. Competitive cost of living, which makes the investment to be lighter than in UK (specially London).
  4. IT capabilities: there are a good bunch of companies already there, which attracts people with so many different skills.

 

Zuora, subscription model as a service

The world is moving from a product based economy to a service based economy. Some companies born in the subscription model, but others need to transform from their existing model to the subscription based model.

So, well everybody knows already that Zuora is an emerging competitor in the market, creating and end to end solution for subscription models. Take care, they do not only take care of the billing activities (there are thousand of companies dedicated to managing billing activities), they do more.

Zuora’s solution:

  • Allows any business in any industry to launch or shift products to subscription.
  • Implement new pay-as-you-go pricing and packaging models.
  • Ways to play:
    • Freemium,
    • Packages model,
    • Promotional strategies,
    • Pay as you go,
    • Overall strategy,
    • Bundling strategy,
    • Segmentation strategy.
  • Gain new insights into subscriber behavior.
  • Open new revenue streams.
  • And disrupt market segments to gain competitive advantage.
  • 100% integrated with SalesForce.

I find specially interest on the documentation shared in the Zuora academy, where aspects as the financial metrics for a subscription company are defined, measured and analyzed. I read the Metrics white paper and it’s a worthy read.

The main concepts are:

  1. Churn rate: % of lost business, 10% churn is a healthy percentage. Small changes in your company’s churn rate can have a dramatic impact on growth over time.
  2. Recurring Profit Margins: the difference between your recurring revenues and your recurring costs.
    1. Cost of Goods Sold (COGS).
    2. General & Administrative (G&A).
    3. Research and Development (R&D)
  3. Growth Efficiency Index : How much new recurring revenue can you get out of a given investment in sales and marketing? If you spend $1 on sales and marketing, how many new recurring revenue dollars does that buy you?A healthy ratio for a b2b SaaS company with a direct sales force is 1:1. Invest $1 to book $1 in new recurring revenues.

Annual-recurring-revenueTo follow the competition:

  • Strong competitors: AMDocs, CGI Group, Oracle, CSC,
  • Prominent competitors:  Aria Systems, Chargify, AWS, SAP

Things to be improved:

  • VAT management,
  • Revenue recognition,
  • Multi-currency support outside of SalesForce,
  • Integration with other vendors: Microsoft Dynamics and Oracle.

 

Scenario planning

Scenario planning of a company, product, solution or organization is a tough work. You have to understand the landscape, competitors, your capabilities, inertia, common patterns, weak signals, anticipation & game-play. I face the situation on solutions (which is less complex) and an start-up company and the concentration to do it well is enormous.

To gather the information is relatively easy, the tough side is to define plan you want to put in place and be sure that it really is aligned with all these factors.

Scenario-PlanningImage from Bits or pieces?

 

Las Vegas

You travel to a new city and which you have seen in TV so much times and the exercise your mind does is to confirm or disregard the labels you created in your mind. All based in the small adjustments you do when you arrive there. In my case, these were the small adjustments my body did.

The temperature is similar to Sevilla, but without humidity, which makes the heat just a little bit more affordable. Well in Las Vegas you have so much months like this and in Sevilla just around 2 – 3 months.

The strength of the sun is much higher than in Sevilla, here you can burn easily, and I cannot be without sunglasses.

Here people can smoke almost in any place, so at the end of the day, all clothes smelled to tobacco. Hopefully this is not happening in Spain anymore.

Apart of these small adjustments, here all is around the entertainment, absolutely all, there is no space for other things. We came for a fashion fair, and we see, touch and smell the core business of this city: entertainment. They were able to diversify their business, the main 4 ones are:

  • Entertainment for adults,
  • Gambling,
  • Family friendly activities,
  • Convention business

They divide the week in 2 parts:

  • From Sunday night to Thursday night: families and conventions.
  • From Thursday night to Sunday night: gambling and adult entertainment.

All casinos compete to attract as much business as possible, but they have a common long term direction about where they want to drive the business. Apparently there is also a good collaboration between the state government, the gambling authority and the casinos. To me these synergies are the main difference to the Atlantic City business: they have not good collaborations between the state, the casinos and the gambling authority.

Las-Vegas

Strategy drives digital transformation

This is a nice article that talks about some myths about digital transformation.

I like the comments related to:

  • Maturity of your organization: not all organizations can start from the same start line, the level of current maturity is important to understand how drive it.
  • Talent challenge : as in the 90’s the companies wanted their people to know about WordPerfect, Lotus 123… now the people have to increase their skills (again). Nothing new, by the way.
  • Survey about how digital transformation is Today on a dashboard.
  • Taking Risks Becomes a Cultural Norm; why? The digital mature companies knows that today, the costs of inaction almost always exceed the costs of action.
  • It is a transformation, it requires leadership and involvement from leaders of the organization (surprise, surprise!).
  • Beth Israel Deaconess: “I have never seen a technology drive change on its own, culture leads the adoption of technology. Our ability to innovate depends on the impatience of our culture.”
  • Greater integration between online and offline experiences.

The goals of this transformations are not so different to the competitive challenges of the organizations 5, 10 or 15 years ago.

sbdigital4-01

OSCON Videos

I have enjoyed watching videos from the Open Source Convention. I like the visionary videos, and to learn from some very interesting people who prepared these nice speeches.

The videos have something good: they take 10 – 15 minutes, no more… well there are some exceptions.

The Making of a Cloud Native Application Platform – Sam Ramji

  • Capability driven framework is not the valid strategy framework: innovation is the right framework for competition on the marketplace.
  • www.docker.com
  • Continuous innovation, continuous deployment, continuous integration.
  • Majority of companies are not able to implement continuous deployment and continuous integration, they fall on: “waterascrumfall”.
  • “Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization’s communication structure.”
    Melvyn Conway, 1967
  • BNY Mellon, J.P. Morgan say Cloud Foundry prevents vendor lock-in

“How”, “why” and “what” Facebook Open Sources at Scale – James Pearce

Why does Facebook open source?

  1. It accelerates innovation
  2. We write better software
  3. We share our challenges

Qué hacer con tus miedos

Este libro lo descubrí cuando su autor lo estuvo presentando en la radio. Me atrajo la idea de los ejercicios prácticos y las técnicas comentadas para poder salir de la zona de confort y trabajar tus emociones.

Después de leerlo, me han convencido mucho más la primera parte donde se describen los tipos de miedo, como funcionamos, como reaccionamos, la influencia de las expectativas, los automatismos, las creencias, la zona de addicción al yo…

que-hacer-con-tus-miedos

Rudnitsky sales playbook

Business insider reminds us these useful rules that appear in the book behind the cloud; these are the 11 sales rules from David Rudnitsky:

  1. “Think BIG, Have Attitude”: Think big (dollars and scope), not just the immediate opportunity in front of you. Behave as if your company is big, even if it’s not. Salesforce’s average customer had 12 users when Rudnitsky started out.
  2. “No deal is won or lost alone”: Bring in the entire team to work on new deals, and brainstorm about how to do a better job. “I’m less impressed with someone who closes a $2 million deal alone than I am with someone who brought all of us in and still closed the same $2 million deal”.
  3. “Connect the dots”: Never cold-call — always call with a plan. Constantly reach out to contacts and find connections before engaging with a prospect.
  4. “Focus on ‘why not'”: Instead of thinking about why a deal will close, focus on why it might not. “Anticipating the ‘why nots’ gives you a significant advantage over [competitors]”.
  5. “Always take the deal off the table”: Make sure every deal is closed if it’s ready to close. Don’t waste any time, leaving a chance for the deal stalling and potentially getting away.
  6. “Get your face in the place”: Meet your customers in person. You won’t be able to learn anything about them by just talking on the phone. It also strengthens the customers’ confidence in you.
  7. “Fun facts build instant credibility”: Try to learn everything about your customer and collect ‘fun facts’ that could be used to build your credibility.
  8. “Be proactive on all paperwork”: Make sure all paperwork is in place. Otherwise, it will “come back to bite you.”
  9. “Always get quid pro quo in negotiations”: Don’t be afraid to ask for more and say no when needed. For example, make sure you’re allowed to announce the deal in the press because it gives huge publicity that could lead to other opportunities.
  10. “Share best practices”: Share great emails or proposals with the rest of the team and try to learn from them. And use them in other deals too.
  11. “Go after game changers”: Look for deals that can take the company to the next level. “These deals are revolutionary in a company’s evolution. Winning huge customers, such as Dell and Japan Post, was game changing for our company”.