Martech Conversations: Episode 5
Dorai Thodla: No, I think, what you said is exactly the way to summarize it. There is technology intelligence, there is competitive technology intelligence and as a corporate, you know, looking at some of the literature, it says, it is three levels, one is at a global level, where the whole world is moving in certain direction, like, you know, to mobile to cloud, you know, now to, you know, to AI, that kind of stuff, it's a global, you know, it's not very specific to any organization kind of thing, then your particular industry adoption rate, which may not be the same as the global one, you know, like, certain industries absorb certain technologies faster than certain other technologies. For example, retail will do prediction, you know, predictive engines and those kinds of things much faster, because they are, that will help them a lot in that business, like how much the stock all that. And they've been doing it in and some rule basis 7 year now long, so and then there are very product specific and technology specific ones, which are, like more for this product. How does technology help and all this sort of stuff? So technology intelligence is the act of gathering information, gathering data, for example, and converting it to information, the usual pyramid in our data information, I live the wisdom out of it. And, you know, insights, basically inferences that you draw from it. And the whole stack is the, so data gathering and some amount of, so technology can be used for getting technology intelligence. That's not a big surprise, it's kind of a recursive thing. Right? And it's a huge community here for technology intelligence professionals. And that role is kind of distributed in organizations, when I've looked at the jobs and things like that in the technology intelligence role is played in the product teams, some member of the product team will say, Hey, you know, who are all there in this field? What is being done? What is it called the absorption rate? What technologies are being absorbed from the past?
Pravin Shekar: Dorai, just to interrupt how it happens in my company, and those I'm interacting with: whoever is the tech geek, it is given out to him saying, hey, you go to the analysis and, and come back, which is not necessarily the right way. But that's an interlude back to you, Dorai.
Dorai Thodla: Yeah, yeah. That maybe true in all the cases, because I think people focus on big problems, right. And they also focus on immediate problems kind of stuff. So the bigger the organization, the role has to be slightly different. But I think what they call the literacy, technology literacy is important at all levels in the organization. Because if some geek gets excited, saying that Pravin I found this new way of, you know, doing this survey and blah, you know, you will say, “Really? Prove it to me, show me a prototype, a correct thing, and how long will it take? You know, why not three days, why not one week?” and so, I think some amount of literacy has to be there from top. So, you know, many of these cases, you go and educate the management and they don't have the time. And so you have to give them in a very small, hey, this is what is happening. And the best way to kind of convince management is, it's what your competitors are doing. You know, and if you don't do it, okay. That is one method. Another is that, hey, this is what people are doing, and that may disrupt our business. And those are all things that people listen to because, I mean, they have an intuitive feel that saying, the old way of doing things is always going to change. You know, there's always going to be a new way. Sometimes the new way may take a while. Look at Microsoft, they ignored internet for a long time, to their own peril. And then all of a sudden, I think there are a couple of guys inside Microsoft, not Bill Gates, who wrote a note to Bill Gates saying that, hey, if you're not going to be in this, we are toast. And for a long time, you know, same thing happened with under Steve Ballmer, who would be ignoring open source. But look at Satya now embracing open source. Even big technology companies, certain shifts in technology in the users in Digital Equipment Corporation, the mini computer company, I used to love and I used to work for a sub, you know, kind of subsidiary dealer of that. And they just, they were bought by Compact, which is like a tiny PC clone company. You know what, at the time these guys were, you know, the kings of, you know, mini computers. They ignored a lot of trends, right? They ignored Intel coming up, they ignored the PC Operating System, first version of PC, DOS, or something terrible, you know, they can also just put this whole Unix business and all that. So I think even big companies, technology companies are, you know, sometimes blindsided by their own conviction of what is currently going in the market? And they don't see the stuff.
Pravin Shekar: I have a practical question here. Because new, new things keep coming up on the technology landscape. For example, the latest one, that's the buzz going around is clubhouse, which is an audio based engagement platform with a very unique and innovative marketing strategy. We had to beg for invitations, I got one invitation, got in. But how much of that to take in? How much of it is high on which is reality? How many such new things should I as a marketer invest in or as an entrepreneur invest the time and resources in, Dorai? That's a classic question.
Dorai Thodla: Yeah. So this is basically the, you know, the internet has enabled in use to travel really, really fast. This clubhouse would have taken probably like two or three years to penetrate, and come up on your radar a long time back, right? Because of the nature of technology, the TIK TOKs of the world and the, you know, clubs of the world, they just bring up like WeChats. So the answer is it's, uh, at this point in time, I would watch for the simple reason is that, what does it really make? Does it affect my core business? Right? In the case of marketing: Yes, probably. But what is the equivalent of a clubhouse, that is, technologically one generation behind? What is it? What do you think it is? It's zoom call, right?
Pravin Shekar: Yes. Technically, yes.
Dorai Thodla: Technically, right? In the sense that clubhouse is audio, and you know, of course, there may be a lot of other kinds of things in them. Zoom itself, adoption rate is very slow, and then only because of COVID, Zoom got adopted. Right! Shot up. But if you look at the collaborative, you know, learning systems have been struggling for decades. And then something happens. That is an external event or the technology event. Either technology becomes so cheap, so easy, it's on the phones, it's everywhere and all that kind of thing and it takes off. Or if it is some external event, like you can't step out and go to office like you don't, what are you going to do now? You better you know, like, imagine what would have been if the same COVID hit us 20 years ago, two decades ago, before the internet became what it became right? Speeds were not there. Imagine the amount of, you know, the gigabits. YouTube was not there at the time. So the way I would look at the clubhouse or any other kind of thing is that who are the major ones adopting the technology. And this happened to me in 1998, where I was looking at XML, I said you know, I was in relational databases for two decades, and I said, “Wow, this is going to go.” But after some time, it reaches a kind of self. So when once Geoffrey Moore has this curve, right, you know, technology adoption curve, right? There are all these gaps and all that. Once the laggards also follow suit grudgingly. So that technology is gone to stabilisation state. Then suddenly there's no SQL came and then of course, the SQL came back to some extent. So basically what happens is, the market drives the needs. Actually needs drive technology. And technology drives new needs and technology comes in, then it creates new needs and create new possibilities. For example, I'll tell you, my stories are old. But in 1991, Windows came out early 90s, Windows came out 89,91 kind of thing. And it was crappy. Because every time we resize the window, all windows will resize. It's like a tiled windows stuff that Microsoft adopted, then by I think it took almost like a couple of years before the Windows 3 came in. And that completely changed the way people moved from DOS to Windows. When people move from DOS to Windows, there is a big problem. The problem was there’s no applications on windows at that point of time. Right. And I’ll draw parallels of this in every generation of technology. And people said, a lot of people took advantage. And there was this guy by named Charles Pritchard, who wrote a like a 500 page book on how to write Windows application. It was a hot seller. And the first application saying “Hello World” on Windows was about something like what 70 lines of code in C code. It was a different style. It's called Event Driven Programming. And this is another kind of thing. And then suddenly, in 93 I think, sorry, 91 - 92 timeframe, Visual Basic came out, and Visual Basic, it was one line of code to write a “Hello World” application. So I ran up to my partner and said, “Hey, we have to do something about it.” Because we were in the beta at that time. And then he said, “Okay, what do you want?” And the usual stuff, “and why should we do it? We have this other product that is still not selling, why don't we take it out?” I said, “No, no, there's an opportunity we should take.” and [he] said, “Okay, I'll give you two interns go do a prototype.” So I did a prototype, went back to him. And then he said,” Okay, fine, this is great. Now, what are you going to do?” And I said, “I want to go to Microsoft launch event.” [He] said, “What that is damn expensive, like $7,500?” or something like that. We all went to Atlanta at that time in Windows VB was launched.
Dorai Thodla: And then we had a booth and all the others were all having VB all kinds of things. And we had a database engine that we already developed, connected to VB and every Microsoft product manager, was it or good, saying this is cool, this the first application you're like, there's nobody like this among the 19 vendors who are there in the room, that when can we get it? I said “It's not ready. This what I'm showing.” [They] said, “It doesn't matter. You give the documentation. Doesn't matter, whatever you have, you give it to us, give us a right to copy it, we'll give it.” They gave it to the salesforce 100,000 people that went around. And then they bought about 1500 copies. And they said the only thing is you go print the manual, here is your money. But just make sure it's the same size as the VB manual, we put in elastic band. And all of a sudden, within a couple of iterations of that, you know, third product in that series, we did like $3 million in one years time. And we marketing spend was less than $100,000. We just used to show up to these in this shows with booth, Microsoft guys used to come and every time I gave a demo, a bunch of people came with me and said, “We want the product.” We will say, “We're not ready.” Then, “We don't care. Do it to us.” Because people were rapidly building. So sometimes what happens is just these gaps, you know, wherever a new tool or new technology is introduced, it creates a gap, right? And it creates a gap and a bunch of innovators, outliers think of new ways of using it. Happened with WhatsApp. Happened with Facebook. And for a long time people couldn't figure out. And suddenly people figured out Facebook is a great advertising platform, which is an alternative to Google, for example. Sometimes it takes time to sink in, but if you watch the outliers, so if you're one of those early adopters, okay, or innovators, you know, these are first two people in the Geoffrey Moore's [curve]. You would watch the technology and you'll just see who's adopting. And the corporation will come later. Because, you know, the banks and all these guys will say it has to be stable, it has to be secure. They can't, you know, mess around with the technologies. But are they doing pilots you know, who are attending these conferences? Who are the speakers in these conferences? Who are on the standards bodies? Who are, you know, the big licensees kind of thing and when you start watching them for a business one, you know, it's not an answer to your clubhouse question.
Pravin Shekar: No, no, but you know, where our conversation is in? We started with influencers, moved into which were individuals to associations to the landscape, in terms of watching. End of the day, it comes down to this information. So carry on, Dorai.
Dorai Thodla: So what happens is, you keep an eye on technology. So that means not a lot of these are like, great story. But they're also like, Microsoft had this thing called Ollie 2.0. I mean, the entire industry, there is also another 500 page book for that completely unreadable. But the huge industry money was spent on it, a lot of things, you know, it just didn't turn out to be anything. Similarly, there are a couple of other products that Microsoft had, they all went completely zeroed out by the advent of internet. And, you know, we know about Wikipedia, it was Encyclopedia and all this kind of stuff. So, let us look at it from a business point of view. The thing is, you look at the technology, and then when you look at the technology, can you think of different ways of using it. In the way we use it is, you know, does it take some amount of my work and automate it for me? That way, removing the tedium, you know, like, or making it qualitatively better did not necessarily cost wise better, right. The second thing is, does it save me money, you know, which is a big debate, you know, humans versus machines can bring, but we'll come to that, you know, does it make humans operate more efficiently? You know, with the help of technology. So does it augment my team, you know, productivity of this kind of stuff. So, that is one. Does it change something fundamentally? Does it enable something that was never possible before? Like, in the case of internet, eBay wouldn't have been a company at all without internet. I mean, Amazon couldn't have been born without internet. Amazon couldn't have built a better book house, and he competed with Barnes and Noble or any of the biggies at that point in time. The initial Amazon advertisement, if you saw in mid 90s, and late 90s, they were saying that, you know, they'll talk about these huge ships carrying books and said that much of books, we have at the tip of your finger, I mean, like they had this variation of this 1000 songs in your pocket thing of Steve Jobs. At that time they were just a bookseller, but it won't take a lot of time for people to say that if you can sell their books, what are all the other things you can sell the same way that you sell books? Not the same customers? Okay, can you sell cameras? Can you sell you know, gadgets? Can you sell, you know, things that you can recommend to others, you know, based on the purchases? Can you sell clothes? For a long time clothes were, “No, no.” Everybody had to go, touch, feel them, wear them. It took a long time. But all those companies they started with you know, automating selling clothes, they had you know, very small markets, like there is a company in India called eShakthi that was doing it. And they finally went to mid east market. Because, you know, people said, I have to go touch it, I want to feel it. But now today you buy in Amazon shoes, clothes, shoes, Zappos, for example. Yeah. So I think you start thinking about what are the adjacencies? But what is it? How can you take this technology and do that? And then the Uberization of various things. Right? You know, like we talked about, and I don't have this particular, how can I disrupt this business? And it's also be, you know, I don't know the original Uber story. But Airbnb story is that, you know, hotels were too expensive, and too impersonal and they're pushing, you know, whenever things are bundled, they pushup across the same argument like CD where you have to buy 14 songs to listen to one song versus selling by song, which is basically in the digital music, mp4. But a lot of things have to mp4 and mp3 in this particular case had to happen, digitization of music had to happen and the quality had to be good before this technology could come into place. So what are those the generally watch the marketplace, but you pay attention to things that can directly affect your business, or that can impact your business in some positive way or negative way in the sense that if I don't do it, somebody else is doing it.
Pravin Shekar: Right and even here, we have the standard curve of early adopters, and then the core. And then the laggards, Dorai. We are talking about the unknown here. And it is pretty much a gamble as an entrepreneur. I mean today it's clubhouse, and we're still trying to figure out what it is. It could be something else tomorrow. One is, of course, where all do I invest in. The second, of course, is the hesitation that comes over, as to well which horse do I bet on and if it's the wrong horse, then I'm already behind.
Dorai Thodla: Yeah, no, I think you take small bets. You know, actually, there's a book called Small Bets. So there is a really interesting idea is that no, you don't bet on it immediately, watch. You watch for the second or third generation of that technology. The Signal has been around forever, forever. It was a geek's truth.
Dorai Thodla: It is Signal’s core protocols, infrastructure is what is used by WhatsApp and others kind of thing. WhatsApp because of this, you know, the recent license, you know, funny thing that the Facebook game. People are switching to an older technology in grows. Okay. So it's not as the technology but they never become popular. WhatsApp has obviously had a much simpler user interface and all that. But WhatsApp took a long time to become a business tool. But I was talking to this friend of mine, he's in the realty industry. And he says, you know, what is my biggest problem? All my realtors talk to their customers and WhatsApp them in their personal phones. And I don't have any sales data or customer data, or anything in there. So Business WhatsApp would have been, you know, like, very, very different, you know, production curve. But they should have opened up the API, they should have given it. They made it so hard. We know that right? You know how difficult it is. You have to go through somebody. Why do you take so much of time, it's not as your technology kind of stuff. There must be something else that is holding it up until they become natural. Once businesses are adopted it, they don't switch, you know, they take a long time to switch.
Pravin Shekar: So I'm going to throw a completely different question to you, Dorai, because I know you have the answer. How big is this market? And how do we figure out this technology intelligence market? Is it really big? Is it important? You didn't mention you had some statistics to share? Yeah.
Dorai Thodla: So the technology intelligence market that itself is like a function in a company, right? So it is as big as the businesses. See, let's think about it. Every business has an IT spend, and the IT spend varies. Nowadays, the IT spend is increasing, like, you know, about almost four or five years ago, Suresh Samandham from Orangescape told me that, “Hey, we don't have computers servers anymore in Orangescape. We all subscribe to the cloud.” I mean, they are like one of the early cloud companies in Chennai, right? They used to do right ones cloud anywhere kind of thing. And they were on. So they're like the biggest experts in cloud. He was saying that they all gave Wi-Fi laptops, and everything is on cloud. And people can just walk in and do it completely change the infrastructure of the company for doing it kind of thing, right. So depending on company they use technology or not, the IT spend is much, it's a different ratio. In some cases, technology is very small, then you know, only for payroll, ledger's, inventory and supply chain management and all that. So if you take part of the IT spend, you know, how much money do people spend on marketing? What is the percentage spend number you have? You know, I have one, I just want since you're the marketing expert, I want to put you on the line here. What do you think is the average spending on marketing?
Pravin Shekar: If it is a startup to growth stage, an easy 30 - 40%. And as it goes a bigger it's a mix between marketing and sales of 12-20% mandatory and then it slowly comes down as the company increases, but if it's going to be fully on growth, where the focus is more on top line, Dorai, then 20 - 25% is absolutely normal.
Dorai Thodla: That's fantastic. Because I think certainly growing companies, this must have been in older period, the record is 8-12% kind of stuff is the number number that I heard but you're right in the beginning, you do need to spend a lot of money on marketing. In fact, if you take a startup, if there are two major functions, one is to produce, another is to market and sell. We again came back to the martial business right. So somebody has to go and describe it to the customers and you know sell it and then we have this, you know, people who produce it, maintain it, improve the quality. This is the two major things. Others are all like support functions, but these are core functions to the company, you know. And the way you do it is slightly different in each given cases. So, you take the IT spend, and you take the marketing spend, and then you see the strategy, you know, how, you know, how much where does it fit in? Is that part of it marketing, part of it, you know, because the IT part of any technology adoption is not the major expense. It is the training of the people, changing the mindset, adopting it smoothly, so that existing operations continue on all themselves. So many of the companies use the small, start small pilot groups to take one non trivial, but non critical area of the company, and then go and say, Okay, what I'm going to do, and you know, where I'm going with this micro products, right, you go build a micro product. And then you've got, you know, my favorite example, again, is HubSpot’s website graders. Website grader is just a way for them to assess how many people are interested in improving their websites. That’s a market, right? And they give it away for free. You know, almost 5-6 years ago, it was more than 5 million users. And it acts as a lead-gen. So they'll say, Okay, if you're on your website, we'll send you this report, give me an email address, got the email address? And then they give the report and said, Do you want us to improve it? We'll do these kind of things, got more details, you know, incrementally, lead generation mechanism for them. And so would you have thought of some tool that analyzes the website and gives you some stats as a tool for lead generation, or a company, for example. And so it's not even just the technology, it's actually what the technology enables for your company. I think that is basically what we need to impact.
Pravin Shekar: Beautiful, and I think that wraps up this episode in terms of technology intelligence. There's quite a lot that all of us have learnt and a few things that I’m taking back to my company, Dorai, is to go and check what is the tech literacy in my company top to bottom, how literate are there in the technology that is available? And then to look for adjacencies in my market of research, analytics and consulting and then of course, look at the small bets that we would need to continuously place specific to the technology intelligence. Oh, lovely Dorai that wraps up today's episode thanks a lot for sharing your gyan with us.
Dorai Thodla: Thank you Pravin, This is pretty interesting topic for me. So if you get me talking, I never stop.
Pravin Shekar: Lovely. Looking forward to the next episode.
Dorai Thodla: Okay, thank you. Same here.