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This week saw inter­est­ing news com­ing out from User­voice: fund­ing and white-label solu­tions for enter­prises. Good direc­tion, but not far enough to reach the inter­nal enter­prise mar­ket: this is a com­mon strate­gic mis­take that hurts both enter­prises and start-ups with a poten­tial on this market.

User­voice pro­vides a quick, sim­ple and very effi­cient means for users of a ser­vice to feed­back their thoughts, both pos­i­tive and neg­a­tive, to ser­vice providers. Such appli­ca­tions are usu­ally designed only for the con­sumer mar­ket, but can be used as inter­nal IT appli­ca­tions as well—large com­pa­nies can be tar­geted, but only for their con­sumer fac­ing activ­i­ties. In this case, all IT func­tions could (should I would argue) use a sim­i­lar tool to mon­i­tor the pulse of the ser­vice and appli­ca­tions they’re pro­vid­ing to their end-users. Other uses are of course pos­si­ble, but this is the most obvi­ous one. Value is cre­ated at both ends: users can con­vey their wishes in 30 sec­onds instead of the usual 10 mins to fight with cor­po­rate legacy sys­tems; appli­ca­tion own­ers access an orga­nized and pri­or­i­tized list of requests.

Laser-focused, fluid and intu­itive appli­ca­tions like User­voice increase the veloc­ity of infor­ma­tion flows within orga­ni­za­tions, and max­i­mize the Return on Atten­tion for employ­ees. Ven­dors as well as IT func­tions often under­es­ti­mate this poten­tial value cre­ation and these tools tend to be used only for con­sumer, exter­nal fac­ing activ­i­ties. But change is com­ing. Cor­po­ra­tions are begin­ning to real­ize the need to opti­mize ROA and IT func­tions start to wake up to the neces­sity to treat their users as con­sumers who decide whether or not to use the ser­vices they pro­vide. One actor is still not chang­ing, as just illus­trated by User­voice: the startup vendor.

The rea­son is sim­ple: enter­prise sales are dif­fi­cult, long, risky, expen­sive, caught in pol­i­tics, etc. All this is true, but only in the clas­sic enter­prise sales approach. Star­tups need to shift their approach for a much bet­ter one, com­bin­ing prod­uct archi­tec­ture and pric­ing redesigns:

• Pro­vide behind-the-firewall appli­ances: don’t allow cus­tomiza­tions, ensure smooth deploy­ment, man­age your appli­ance. Easy to deploy by IT and secure. Mul­ti­tenant SAAS ver­sions are just not secure enough yet for the major­ity of prod­ucts: Sales­Force and sim­i­lar achieves an accept­able level, but the price points asso­ci­ated would negate the ben­e­fits of sim­ple, focused appli­ca­tions com­ing from the con­sumer market.
• Sup­port authen­ti­ca­tion and SSO: authen­ti­ca­tion is the first level of secu­rity, and SSO is needed to ensure usabil­ity (what’s the point of feed­back in 30s if I need to spend 15s to log-in?). LDAP/AD and Ker­beros or sim­i­lar are the key words here.
• Deploy at cost then charge for use: don’t try to reap all the ben­e­fits right-away through license fees, it won’t work. IT func­tions and orga­ni­za­tions are not yet mature enough to invest a lump sum in these prod­ucts. Instead, deploy the appli­ance at cost (at real costs: only hard­ware and time spent), and price based on the actual activ­ity which cre­ates value. For Feed­back 2.0 tools, it could be the num­ber of inde­pen­dent “forums” or the num­ber of feed­back items. You should also give away the first items for free. (I went in details in Enter­prise Social Com­put­ing pric­ing here.)

Fol­low­ing these steps will give you a prod­uct that is enterprise-ready, eas­ily deploy­able and attrac­tive for the IT func­tion in terms of both price and archi­tec­ture. It doesn’t deliver a lump sum right away, but as it is used more and more, the reg­u­lar cash flows are grow­ing and your total install base yields a grow­ing per­pe­tu­ity. The bet­ter your prod­uct is, the more it will spread inside the orga­ni­za­tion, the more you earn rev­enues. Price/revenue is much bet­ter cor­re­lated with value.

Archi­tect­ing prod­ucts and redesign­ing pric­ing schemes to achieve enter­prise sales is thus sim­ple. But the strate­gic impli­ca­tions are much deeper than it appears at first glance. First, I’ve writ­ten before about the increas­ing returns dynam­ics that are exploited when the con­sumer and enter­prise mar­kets are com­bined in a sin­gle strat­egy. Sec­ond, it is becom­ing increas­ingly impor­tant for our largest cor­po­ra­tions to adopt tools that will make employ­ees as effi­cient as they are as con­sumers. But ven­dors need to get there as well.

Photo credit: philippe leroyer