The difference between Apple and Microsoft

Here, in a nutshell, is the difference between Microsoft and Apple:

Apple’s products say, “You can’t do that because we think it would suck.” Microsoft’s products say, “We’ll let you try to do anything on anything if you really want to, even if it sucks.”

Quoted from Marco Arment's excellent post about Microsoft's Surface.

Failing Gracefully

Fred Wilson's Friendly Failing blog post reminded me of one of my favorite phrases: fail gracefully. I think I first heard this term when I worked at Yahoo. Engineers and product managers would talk about what would happen when users experienced an error on a web site and they always wanted to be sure that the site would "fail gracefully."

Failing gracefully in this context means that a site shouldn't just deliver a random error message, but should explain to the user, in plain language, what had happened and what their next steps should be. These days, you see this done frequently with good 404 pages and other types of error pages on sites.

Ideally, an application will fail so gracefully that a user won't even realize that a failure has taken place. At Palo Alto Software, our site search uses a custom Nutch and Solr configuration to regularly crawl and index our sites. But, as with all things, this solution sometimes fails. In that case, the system automatically fails over to a basic Google custom search. The Google solution is still quite serviceable and works well. Most importantly, end users won't even know that our preferred solution failed and is off-line. For me, this is the best way to fail gracefully and we strive to achieve this kind of seamless failure in all of our development.

The other context for failing gracefully is when you actually lose. You lose a contract, a game, whatever. You failed to win. My high school rowing coach drilled this into me and my teammates: that no matter the situation, if you lose you take the loss gracefully, always respect the winner, and learn from the situation.  Not that we lost often (my coach was excellent), but if we did, we needed to learn as much as we could from the situation so that we could compete better the next time. When we failed, we failed gracefully and were never the sore losers who blamed a loss on others.

Microsoft Surface: This was my computer...8 year ago

When Microsoft introduced their Surface tablets a few weeks ago, I had a deja-vu moment. Hadn't I already seen this computer? Hadn't I used it as my primary computer for nearly two years around 2004/2005?

What I was remembering was my trusty Motion Computing tablet running Windows XP Tablet Edition. Granted, the Motion tablet was nowhere near as slick as what the Surface looks to be, but it honestly doesn't seem like Microsoft has evolved too much in the meantime, either.

I used my Motion tablet as my primary computer. Because it ran full Windows XP, I could run any applications that I needed to. I could grab the tablet and take it to meetings and take notes using One Note (which had excellent handwriting recognition, by the way). When I got back to my desk, I would drop the tablet into it's docking station and it would instantly connect to an external monitor, keyboard, mouse, etc. Although the image to the left isn't my personal setup, it did look something like that.

Although I am now a truly converted Mac guy, this setup was really very good. No hassles syncing devices. No reduced set of applications on the tablet. No missing files. I always had my full computer with me and it could be easily converted from tablet, to desktop, to laptop (with a keyboard case not un-like the Logitech Keyboard Case for iPad).

So, while the Surface looks like a pretty cool device, it doesn't feel like Microsoft has innovated very much in the past 8+ years. We're still looking at a laptop replacement that runs a complete version of Windows (with the Pro version of Surface). Granted, Windows 8 is very different than XP, but has Microsoft actually evolved all that much?

But, regardless of whether Microsoft has evolved or not evolved, the concept of a "complete" OS on a tablet is a good one. For those in the enterprise, all your applications will still work, and you'll be able to work on them in some form from both a tablet interface or from a "normal" laptop-style interface. The situation I described above was a great working environment. And, while I do work mostly in the cloud these days, I would love to be able to dock my iPad to a large monitor and keyboard/mouse and have a solid desktop computing environment that could easily convert to tablet format at a moment's notice.

Some are raising the question of whether Microsoft will have an "app" ecosystem to rival the Apple app store. I believe this is almost a non issue in the short term. There is tons of Windows software still out there and there is plenty of custom software in the enterprise that will ONLY run on Windows computers or in Internet Explorer. Hard to believe, but true.

Most Windows developers will only have to do a little work to make their software work for Windows 8. Many won't have to do any work at all. Microsoft has an app ecosystem that they've been developing for over 2 decades and it's not quite dead...yet.

And, by the way, isn't it ironic that we are now talking about the availability of software for a Microsoft product? That the major problem with choosing a Mac for over a decade... not enough software. Now, it looks like the shoe is on the other foot. Funny how the world changes.

I'm looking forward to see how the Surface does in the market. I think it has a decent chance at stealing market share from traditional Windows laptop makers. Will it steal from the iPad? I don't think so. Surface will succeed in the enterprise, though.

Writing a one-page business plan

If you're like most people, writing a business plan is something that frequently gets pushed to the bottom of your to-do list. After all, who wants to write a 30-60 page paper?

Well, gone are the days of the long, draw-out business plan that does nothing more than site in a drawer. My latest blog post over on the Bplans.com Up & Running Blog details how to get a business plan done in one page.

Check it out and let me know what you think.

Including assumptions in your business plan

I just published a new post over at the Bplans.com Up & Running blog about including assumptions in business plans. Every business plan should document the core assumptions that drive the business and include a test plan for validating those assumptions. Not only will this make your business plan actionable but it will help guide you towards a successful business.

Read the full post here.

Do you deliver what you promise?

Seth Godin had a great post today about setting expectations in your marketing. He discusses the all-to-common fact that big companies advertise great customer experiences but rarely deliver. Under-delivering on a promise leads to customer disappointment. So, the choice is to either not promise anything and hope that you meet expectations OR promise something that you can deliver.

As serendipity would have it, I happened to have an interaction with Zappos.com customer service today. I’ve heard for years about Zappos’ legendary customer service, but, awash in advertising that promises great customer service and companies that rarely deliver, I certainly had my doubts. Could a company that processes billions of dollars of sales a year really provide great customer service? It turns out that they can. I was not only surprised, but totally blown away by the quality of service.

The fact is, most customers these days expect to be disappointed. They look at advertising that promises a great experience and instead of being inspired to try a new brand, question how it could possibly be true. Many customers, like me, doubt that any company will actually live up to (let alone exceed) their marketing.

Therefor, it does not take much to wow your customers. Even doing things as simple as showing up on time, returning calls promptly, keeping your job site clean, delivering more than was expected for your consulting contract, etc. - these are all enough to WOW your customer and generate loyalty. It’s these little things that keep customers coming back time and time again.

I see this every day here at Palo Alto Software. We’ve done away with our phone tree. Most customers can talk to a customer service agent with less than 1 minute of hold time. We let people download their software years after they purchased it - for free. It’s the little things that count and because customer service is so often bad, it’s easy to please.

Back to Seth’s post. His final word of advice is to invest the money you would have spent on advertising into actual customer satisfaction. Since great customer experiences are few and far between, a happy customer is bound to be a loyal one. And not just a loyal customer, but one that tells 10 of their friends to also use your services.

Is your brand a luxury brand?

As little as a 5-6 years ago, computers and cell phones were purely utilitarian devices. That is, they were used to get tasks done. They weren't always very pretty to look at and certainly not things that you necessarily craved - unless your inner geek needed whatever was the latest and greatest technology. "Sexy" was certainly not a word ever used to describe the latest Dell, Motorola phone, or the newest desktop from HP.

Then Apple managed to change the world. Most people think that Apple's great innovation was the invention of the portable mp3 player.  Far from it. Plenty of others existed when the iPod  came along. What Apple focused on was design - the design of the software that ran on the iPod, the industrial design of the actual device,  and the simplicity of a single ecosystem for managing your music and getting it onto your device.

Even at the time the iPod first launched, it did less than it's competitors. It had fewer features yet it was more expensive than almost anything else out there. Even today, the current crop of iPods still does much less in raw functionality than alternative players. And yet, they still cost more.

What Apple knew was that customers craved simplicity and would be willing to pay for a device that looked cool. People could show off the fact that they owned an iPod with the (now ubiquitous) white headphones even when the device was in their pocket. If it cost a little bit more, that would make it slightly exclusive as it would scare away the bargain hunters and the pure feature geeks.

Apple created an accessible luxury. Something that cost a little more, something that customers craved. This started  mostly in the form of iPods, but now comes  in the form of subsidized iPhones and is extending to the iPad (although the iPad is priced to be a little more exclusive and not as affordable to the general populace).

Apple's computers are truly heading into "luxury" territory. The least expensive MacBook is $1,000, yet I can go down to my local "big-box" store and get a reasonable laptop for $300. I know - these two computers can't be compared in terms of quality, bundled software, processor speed, etc. I'm simply pointing out that the price of admission into the cult-of-mac is quite a bit higher than the cost of entry into the general world of laptop computing. When you open up your MacBook in the local Starbucks, everyone knows that your computer is a "premium" computer and not just some run-of-the-mill Dell.

Which brings me to my real point: What's so great about being a luxury brand?

First of all, you're protected from feature or performance competition. To compete, you need better style, perhaps better quality, and certainly better customer service. The experience of purchasing a luxury brand needs to be top quality from your initial shopping experience to customer support, but you don't necessarily need to compete on core features. Often times, less is actually more.

Second, you don't have to compete on price so your margins can be big.  In fact, you better have a premium price to substantiate your premium brand. Not only do you have a premium price, but you need to make sure that your products aren't offered in discount locations that can't support your entire brand experience. What this generally means is that you get to command higher margins than your competition and hopefully reap the profits at the end of the day. Luxury products tend to be highly profitable.

Third, your market is slightly more affluent than the target markets of other brands. Your customer is able to spend a little more to get a product that they can show off. This segment of the market is a little more resilient to economic ups and downs and will be able to spend money with you even when the economy tightens up.

Here's where Apple has had a brilliant strategy: not everyone can afford their higher-end computers, but they have plenty of "affordable luxury" products so that you can get a piece of the brand without having to pay thousands of dollars. This is equivalent to Coach selling slightly less expensive handbags or Dolce & Gabbana selling sunglasses for around  $100. Customers get to get a taste of a luxury brand at a reasonable price. Everyone likes to spoil themselves now and again with a little luxury and affordable luxuries can have great appeal. Witness the explosion of cupcake shops that sell the tiny cakes for $3 and up at huge profits!

The one potential issue with being a luxury brand is that you might have to give up the low end of the market in order to succeed. Back again to Apple, it appears that they might do this with both the iPad and the iPhone as Android phones and tablets  take over in terms of sheer volume. My guess is that Apple will stick with their high-end, luxury strategy and let the rest of the market be owned by someone else. They'll stick to their high-margin products for the top end of the market and let others fight it out to claim the rest of the market with low margins and tough price competition.

So, how can you make your own brand a luxury brand? Can you update the experience of shopping in your store or on your website? How do you make your product or service worth paying a little extra for?

Here are a few tips:

1. Extraordinary customer service. Make doing business with you a better experience than anywhere else.

2. Extraordinary product quality. Your product doesn't need to do more than the next guy's. It just needs to do the basics better.

3. Exclusivity. An endless supply of your product usually means that anyone can get it. You need to figure out a way to make your product or your service slightly scarce. Make it worth lining up for.

Is your brand a luxury brand? Can it be one?