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Ted Cuzzillo's BI

Ted Cuzzillo

LucidEra's lessons for BI in the mid-market

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Here are two tips from LucidEra veterans Ken Rudin and Darren Cunningham about BI in the mid-market: Forget "freemium" — the new term for free service leading to paid service — and be wary of users' ability to analyze data.

Rudin co-founded the company and in June saw it fold for lack of renewed funding — in spite of what he described as "extremely happy customers" and a rapidly growing base. At the end, Rudin was chief marketing officer and Cunningham was vice president of marketing.

Unlike in sales to enterprises, the mid-market customers LucidEra pitched typically lacked skill in data analysis and had little time to learn.

At first, LucidEra offered a 90-day free trial of its SaaS analytics — the "free" model, which assumes non-paying customers are completely self-service. That failed. Half the prospects said it was great, said Rudin, but the other half balked.

"We asked them, 'Well, didn't it meet your needs?'" he recalled. "They'd say, 'No, we just don't see any value there.'" His voice rose as he recalled his surprise and exasperation. These customers had been using nothing more than spreadsheets. "It made no sense to me. How could they get no value?"

When he questioned further, he found they'd been doing "essentially nothing interesting" with the service. They had been running the simplest reports, not asking new questions or reaching for new insight in any way.

"We were offering a powerful tool," he said, "and they were saying they didn't know what to do with this thing." He compared it to installing an MRI machine in someone's living room and expecting the person to diagnose themselves.

"Free" has worked for some BI-related vendors — he mentioned Salesforce.com and Jaspersoft — but never to untrained users who must be convinced of the value.

LucidEra dropped free trials and instead offered the free Pipeline Healthcheck. It was a cookie-cutter approach, said Rudin, to demonstrate the value. He compared it to a routine medical checkup. Any doctor knows if the patient's blood pressure is too high, as any analyst can tell if salespeople should let go of dead prospects sooner.

Customers liked it. Many came away with pages of notes from the discussion about what to do. For example, LucidEra found a significant opportunity for a cable company in the Northeast.

At first, Pipeline Healthcheck seemed to work. Then usage fell off. When LucidEra called to ask why, customers explained, "When you came out here and told us all that stuff, that was great. But we can't remember what you did. We just aren't as good a this as you are, so we can't use it."

Several customers asked if they could simply buy the analysis service. They wanted LucidEra to come in once a quarter and do a health check. "Instead of having an MRI machine," said Rudin, "they just wanted a doctor."

Cunningham said, "Don't overestimate people's ability to interpret data."

That's why we have professional data analysts.

3 Comments

Ted,
Some great insight on the demise of LucidEra right from the "horses mouth". I would like to pass my thanks on to Ken and Darren for their candor. Their openness and honesty during a very difficult time is refreshing. I think this shows that while their company didn't make it, they are still dedicated to helping the SaaS BI market survive.
Dave

Check out my blog on this topic.
http://blog.pervasivepm.com/2009/07/08/will-lucideras-demise-have-a-domino-effect-on-saas-bi.aspx

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Ted - Thanks for an insightful post. Executive sponsorship and tying BI to key business objectives have always been important. Agreed 100% with Ken's and Darren's viewpoint.

I think this has a lot to do with how an Analytic software (system) gets embedded in the company's way of working or culture. Just this morning I read a Lou Gerstner (of IBM) quote on Cisco's blog - "People do what you inspect. Not what you expect". If the top executives instill a culture of doing business by analysis and demanding business analysis in decision making, a software like this enjoys usage, otherwise not. I have heard all kinds of excuses made by people for not having factual analysis when making business decisions, even when the data exists. Some examples - "Let us not over-analyze; let us not get into analysis paralysis; I don't think the data is going to tell anything different (from what I am telling you)". When you hear these phrases you can be sure there is not much appreciation for the value of analytics.

Features like "real-time" alerts, pushing email reports to end users help, but only go so far to encourage usage. To make an analytics deployment successful, someone - a vendor, a consultant or the customer's employees need to focus on change management. For example - starting your weekly sales meeting with looking at the Dashboards and key metrics and some insight into what is happening. There are SI firms that work around SaaS products like Salesforce.com, Netsuite to ensure change management. In the world of SaaS BI such services are only now appearing. Although vendors do need to bring an ecosystem together to ensure that customers get the most out of the analytics deployment, customers too owe it to themselves to do the needful to make analytics a competitive advantage. The book "Competing on Analytics" makes a solid case for companies to change they way the do business and to make analytics an integral part of decision making.

I personally have embraced the new technologies and the CMS platforms, I think the new tools only make the web designs better. I am glad that new technologies are coming out in web design that make things easier, improved, and better looking for design.

In this blog, freelance writer and analyst Ted Cuzzillo considers the far end of business intelligence, where technology meets the irregular human profile. With original reporting and analysis, he writes about data analysis and the analysts themselves, as well as a range of other concerns such as perceptions, terminology and personalities.

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