AlacraBlog

The Pulse Launch – In a Bad Market, You Have to Solve Several Problems

Several people contacted me with questions about Alacra Pulse after my Freemium post on Monday, so I’m going to follow up with a few more posts on how we got the product out.  Here goes:

We had done some market research before we launched Alacra Pulse back in February, but without a prototype or a product to demonstrate you’re really developing in the dark.  In the seven months since the release, I have had dozens of conversations with prospects and customers about their challenges both as a result of the market environment and the changes in the information landscape.  The main problem that we’ve heard about is fewer research and information dollars to meet growing research and information needs.  In other words, there’s more stuff to find and track but fewer people and tools to do the work.

We knew it would be difficult to launch a new product suite in a terrible market, but the more we were told how bad things were the better Pulse began to look, especially since we went the freemium route as I described in my previous post.  We’re providing a cost-effective solution to problems we heard over and over again from our information professional customers:

1. We subscribe to a bunch of expensive market intelligence products and we need to cut costs.
2. The research team has been eliminated.  Everyone is on their own and they don’t know where to look past Google.
3. Sell-side research: deteriorating quality, diminishing quantity and its two weeks old when it’s available to us.

In speaking directly with end-users at financial institutions and professional service firms, we heard a different set of issues.  Bankers and consultants were more confident the business environment would turn around for them.  Their recurring objective was customer acquisition and their major complaint was filtering.

1. Anything that gives me an excuse to pick up the phone and call a prospect is worthwhile.  But it has to be different than what everyone else gets.
2. If you can provide good filtering I’ll talk to you.  Right now the signal to noise ratio on what I’m reading is terrible. 
3. It’s become so easy to fall behind the customer.  And that’s the kiss of death.

The “everyone is on their own” theme strongly confirmed that Pulse needed to be positioned as an end-user tool, so we focused on the end-user’s comments, keeping in mind that there was little money to be spent: we need to provide solutions which are cost-effective with a high signal-to-noise ratio.  More on that in the next post.

How Freemium Worked For Alacra Pulse

We released a free version of Street Pulse in February.  It was the first time we ever had a free anything.  We probably should have labeled it “beta” as it had some issues, but even with the minor problems the launch turned out to be a great success.  The key benefit of having a free version was that it allowed us to start more conversations with more prospects much more quickly.  “Take a look at this – you don’t need a user ID or password.”  We knew from experience that it’s extremely difficult to get someone to look at something new if they need to log on.  With free we were able to immediately get some great press.

We started off having people look at the free version and then moved them to Pulse Professional to try out the functionality they would need to pay for. For the past six months we listened to everyone’s feedback and kept enhancing what we had built.  We shifted gears on what “events” to release next, delaying Credit Pulse to focus on professional versions of Deal Pulse and Weak Pulse.   For our existing customers Chief Pulse (CEO and CFO quotes) is more important than Credit Pulse or Macro Pulse, so Chief Pulse will be out next in about 6 weeks.

Another benefit of free was that a number of business development deals chased us, rather than us chasing them.  People read the reviews, went to the site and thought about how Pulse could work for them.  So now we have a number of deals with partners that should close before the end of the year.  If we had had to look for those partners with a gated site, nothing would be going on even now, six months later.

An additional advantage to having the free site has been for brand awareness. While Alacra has become a trusted brand inside our core markets, we’re not well known outside of those. The free site, combined with a clever SEO approach has enabled more users to “stumble upon” Pulse from Google, creating greater awareness of Alacra.

A final benefit has been the ability to use Twitter.  Our strategy is still a work in progress, but we’re experimenting with a number of ways to use Twitter to drive people to Street Pulse.  We’re using the handle @AlacraPulse as well as creating handles for a few well known analysts including @genemunstersays.

What’s been the downside?  We’ve actually lost a couple of deals because some clients said the free version is “just good enough.”  This was and is quite disconcerting to the sales team but everything is a trade-off.  Our job is to build enough compelling functionality on top of the content that “just good enough” isn’t.  Without the free version the process – whatever we’ve accomplished in the past seven months – would have taken significantly longer.

Paul Graham on Publishing

Must read essay on Publishing by Paul Graham.  A few excerpts:

Economically, the print media are in the business of marking up paper. We can all imagine an old-style editor getting a scoop and saying "this will sell a lot of papers!" Cross out that final S and you're describing their business model. The reason they make less money now is that people don't need as much paper.

People will pay for information they think they can make money from. That's why they paid for those stock tip newsletters, and why companies pay now for Bloomberg terminals and Economist Intelligence Unit reports. But will people pay for information otherwise? History offers little encouragement.

What happens to publishing if you can't sell content? You have two choices: give it away and make money from it indirectly, or find ways to embody it in things people will pay for.

The reason I've been writing about existing forms is that I don't know what new forms will appear. But though I can't predict specific winners, I can offer a recipe for recognizing them. When you see something that's taking advantage of new technology to give people something they want that they couldn't have before, you're probably looking at a winner. And when you see something that's merely reacting to new technology in an attempt to preserve some existing source of revenue, you're probably looking at a loser.

There were also two great lines in the notes:
"Content is information you don't need."

"Record labels, for example, would probably find it more natural to expand into casinos than software, because the kind of people who run them would be more at home at the mafia end of the business spectrum than the don't-be-evil end."

Read the whole thing.