Online Marketplaces ...Back To The Future

InformationWeek has a very interesting article on Red Hat's move to having an online marketplace. This is consistent with the IQ strategy and certainly highlights that our approach and positioning are on the leading edge of the market. Other notable early movers include SugarCRM (SugarExchange), Joomla (Joomla Exchange) and Salesforce.com (AppExchange). Each of these companies have identified the value of leveraging their brands and user communities for growth - sort of like judo for nenw technology companies. I expect that we will see a lot more companies launching these types of initiatives. Having an Exchange is almost a requirement for Open Source companies but I also expect others such as Quickbase, Basecamp and even heavyweights like SAP to enter the fray.

Red Hat Talks Up Online Open Source Marketplace
Linux leader looks to certify the growing number of open source programs for its operating system and middleware platform. http://www.informationweek.com/story/showArticle.jhtml?articleID=198001606

Developing an Exchange / Marketplace strategy is one thing, being able to fund, execute and deliver on that strategy is quite another (sounds very late 90s .bomb) . So, what are the critical success factors? I believe that there are at least 5 :

1. Strategic Positioning - how does the marketplace contribute to making customer's existing investments even more valuable? how will the "owner" company benefit from the Exchange? Salesforce, SugarCRM and F5 have all done great jobs of launching Exchanges that are complementary to their core products. From what I have seen of the Red Hat Marketplace, they are missing the mark. Their marketplace is a venue to purchase a limited number of products that you can purchase directly or download for free with an extra click or two. Without value to the end customer, I don't forsee much traction.
2. User Base -the larger the user and partner base, the higher the probability of success. It stands to reason that the more consumers there are, the more developers are inclined to spend time building solutions that they can profit from.
3. Community - I draw a distinction between User Base and Community since one does not imply the other. To be successful there needs to be a vibrant Community which can add new applications (free and for a fee), post answers to user questions and most importantly refer others to the product / service / marketplace.
4. Ease of Engagement - ease of engagement is probably the most important aspect of building a dynamic community and network. If it is difficult to "engage" - customers and partners won't. In a world of distractions and countless alternatives, engaging and captivating customers and partners is critical. From sign-up through documentation to online chat and user forums, engaging customers and partners is the critical challenge.

Will there be a first mover advantage? Will established players such as Microsoft, SAP and Google enter the market and provide superior alternatives? We are in the early stages of an exciting time - traditional software, open source software and SaaS business models are colliding, business models are evolving and revolutionary new players are entering the marketplace (lousy pun...couldn't be avoided). I look forward to seeing how the first crop of Exchanges 2.0 take-off and evovle.

Why managers need leadership and leaders need management in indivisible, mutual partnership

I am a big fan of Robert Heller and Edward de Bono - two management, strategy and leadership "wonks". The following article is thought provoking. My comments are in Yellow.

From Robert Heller: The Leading Manager
The sovereign truth about leadership and management is that the key to success lies in choice [and the ability to play to your natural strengths]. Choose an an activity which is not the most apt for your talents - innate or acquired - and you will fail, either relatively or absolutely. By the same token, so will all those unfortunates who work under your leadership. For that is where leadership and management join hands. Both depend on the ability to persuade others to deploy their own talents and know-how to achieve the goals of the organisation. Good managers have long known that failure, properly studied and exploited, can lead to exceptional success. Indeed, trial and error - one of the major engines of progress - very obviously embodies failure, as a possibility and an experience. But that perception is hard to build into a systematic, scientific programme that can be taught and replicated. Defects of personality mean that leader/managers often find human relations extremely difficult to manage. Nothing is more basic to effective leadership than the ability to relate tellingly to others, from one's close colleagues to the most distant new employee. [I wholeheartedly agree - communication and dialog, (scheduled or informal) is so important. When teams are virtual and separated by timezones and cultures, it becomes even more so.] Yet I've dealt with leaders who fail the most elementary human tests - like one individual who told me that he didn't know how to say thank you, that most useful of all verbal pairings. But he was still a great success. Had he been a better communicator and man manager, though, he might well have been more successful still.

The great leader needs to judge his or her performance more rigorously than anybody else. Try the following eight questions on yourself:
* Leadership: do I lead effectively myself and enable others to lead just as effectively in their spheres?
* Challenge: do I continuously scan myself, my colleagues and the organisation to identify and exploit areas of significant potential improvement?
* Decisiveness: do issues get identified speedily and resolved as fast as possible and with due diligence?
* Actions: do decisions get converted into deeds and feedback with no undue delay?
* Communication: does everybody know what I am doing and why - and do I know the same about them?
* Change: have I created a climate in which everybody welcomes change and knows how to implement it?
* Basics: have I identified the key success factors and do I know for certain that they are working well?
* Objectives: have we formed high and potentially rewarding ambitions that govern all our work?
* Credibility: do I have the credibility by leading from the front and setting an example that others value and want to emulate?

Never forget that nothing stands still. The revision of strategy and tactics is a most powerful tool for positive change. At the same time, its neglect spells disastrous performance; whether you call it bad management or bad leadership hardly matters.