John Sculley offers a bit of reality-based marketing advice.
You’d think it wouldn’t be necessary to explain to vendors that “home” means “user experience” and not “technology showcase.”
But that is in effect what former Apple CEO John Sculley did in an informal public talk this week at the Consumer Electronics Show with Ethernet inventor and engineering guru Bob Metcalfe. Both men are now partners in venture capital firms, and Metcalfe is chairman of Ember, a Boston, Mass.-based Zigbee software and semiconductor firm.
The early Monday morning talk, which Metcalfe described as a “public brainstorming session” about wireless home networking and control systems, was co-hosted by Ember and one of its customers, Control4, which uses the Ember platform in its wireless control system. It became a master’s class in high tech marketing, illuminating the big challenges facing home control vendors trying to foster and nourish a mass market.
Metcalfe introduced the brainstorm with an engineer’s description of the largely hidden world of billions of embedded microcontrollers, and the advantages to be gained by bringing the Internet to them through wireless nets. He emphasized the multitude of networking protocols, wireless nets, and vendors, ranging from retailers like Best Buy to carriers, cable companies and equipment makers.
Sculley, the marketer, took a different tack. “We could also start with the user experience and work back [to the technology],” he said. “The [product] brand becomes valuable when it becomes meaningful to the user experience.”
Sculley used the incredible success of Apple’s iPod music player as an example of what he meant. First is the product’s legendary simplicity, which extended to one of the basic ground rules of the iPod world: making music available to users as individual songs. “It wasn’t any cheaper than buying a music DVD, but it was a la carte,” Sculley said.
Second, is Apple’s success in selling the device as an emblem of a lifestyle. “The iPod is sold as style, as fit and finish in industrial design, with fashion-oriented advertising,” Sculley said. Finally, Apple set the ground rules and standards for partners to participate in the iPod “system,” creating a growing collection of licensed partners offering an vast array of peripherals and accessories, but with common quality requirements.
Sculley’s implication was clear: the home controls market completely lacks comparable simplicity, a comparable “user experience” to which the user attaches value and importance, and a collection of partners that clearly know their roles in and contribution to the market.
Metcalfe asked if the various carrier and broadband providers would see the controls market as an opportunity to aggressively offer new automation and control services to homeowners and businesses. Sculley was politely skeptical. “The current broadband producers don’t give us a clue about how or who will control home automation,” he said.
It’s unlikely that one company, whether a provider or a vendor, will dominant in any case. “How likely is one ‘Swiss Army knife’ [control] device that can control everything,” he asked. Today’s successful consumer devices are almost always distinct, separate systems, such as audio and video, Sculley pointed out. The iPod, again, is a highly specialized device that does one thing very well.
“What about energy management [a network of devices to monitor and adjust electrical use in homes, to save money and decrease energy user]?” asked Metcalfe. “What’s the iPod model for that?”
Sculley said he was offering “just speculation” in response, but it was intriguing speculation. He said that energy management “sounds like a logical thing to happen” but hinted that it was engineering or technology logic. What would actually trigger that trend? Sculley suggested that a social movement to embrace a “green” lifestyle, one that makes choices to reduce energy consumption out of a something more than a desire to simply save money, might be the key. And that movement was likely to come from a younger generation, one coming of age in the early 21st century.
New house buyers and builders, who are in fact a key target for home controls and automation vendors, could play a role, Sculley said. But that seemingly logical market “won’t just take off,” he warned. “There’s a lot of education to be done.”
Metcalfe returned to his earlier theme wondering if carriers and ‘Net providers would see home control as yet another service, along with TV, Internet, phone and mobility. “I don’t know if they have the leverage [to offer it],” Sculley said. Home control systems today are done by the custom installer channel, he noted. “Can this fit in with the regular truck rolls done by the MSOs, for their main goal of selling video on demand or Internet access? I don’t think it will,” Sculley said.
Metcalfe asked if acceptance of standards, such as the Zigbee Alliance’s Zigbee wireless protocol stack, to network low-power sensors and actuators, would spur the market. Something like Zigbee is necessary, according to Sculley, but not sufficient. Proprietary elements that add distinctive value are important. And what is critical, Sculley said, in yet another allusion to the Apple iPod, is an “end-to-end system that’s oriented around the user experience.”
“What I’ve learned in high tech is there is a very fine line between success and failure,” Sculley said. “A lot of [success] is in timing. A lot of it is in price points. A lot of this stuff is more art than science. You just don’t know when all the alignments come together.”
In response to audience questions, Sculley encouraged his listeners to avoid “feature creep,” the tendency to add “just one more” capability, and then just one more. “It’s harder to know what to keep out [of a product,]” he said.
Marketing is about stories, he reminded the audience. Those stories are based on people’s experience using and doing new things. “People have to see it working. And word-of-mouth creates the stories,” he said. “My sense is there are no shortcuts to this.”
