Lithium: On the path, running...

I have known the folks at Lithium, for a long time.  I've seen them evolve, do great, get a little complacent, shake off the dust and move ahead. I know their lifers and their newbies. I enjoy their company - both the company and the company of their staff. I admire their product. I adore their enthusiasm for what they do.   I have seen them grow as an institution, in a funny way, doing those things that kids do when they become adults. Most adults aren't as free spirited as their youthful expressions, because they have a different set of responsibilities that militate their behavior.  That doesn't mean they don't love fun; that doesn't mean they don't play. It just means what was adorable in their adolescence is just immature when they are older. Their fun and play has a different caste.

I'd like to say Lithium is growing up and for you to think, wow that's a great thing. But to put it that way isn't entirely fair to Lithium.  In many ways, they have been grown up - meaning building a significant and important company in the world of the enterprise and elsewhere for several years. For a long time I said they had to get enterprise-ready and while that still holds in some ways that I'll discuss below, they have had a significant enterprise customer base for a long while.  Look at their customers like Hewlett Packard, Autodesk (doing amazing things with Lithium due to the presence among other things of the up-and-coming thought leader, Brian Kling), and Best Buy. These are communities serving high volumes of interactions - in the millions - with, in some cases, hundreds of thousands of members. To bolster the point, Forrester chose Lithium as one of the Enterprise Listening Platform nominees because they qualified with "...at least 40% of their customer base serving $1 billion companies or more than 100 enterprise customers."

So for me to say that they hadn't grown up to be ready for the enterprise would be not only patently unfair, but also actually untrue.

But that doesn't mean they are fully ready either.

There are some things they are going to have to do to get to where they want to go if they want to be one of the more important enterprise software/services/platform providers on the planet. They aren't there yet.  But what they are is both admirable and growing and have retained the energy they need to continue to grow.

I'm going to outline this in 3 parts.  The conference, the product, the company.

LiNC 2012

First up will be a discussion of the LiNC 2012 Conference that I just attended from the perspective of the show itself.

As I have said repeatedly - to the point I'm sick of hearing myself say it - the annual user conferences of the significant companies are important inflection points for them because they set the tone for the following 12 months. The customers that attend, the analysts who are invited, the staff who participate, the partners who show, all benchmark how they feel about the company via these conferences. While not the only criteria by a long shot for the good will that is a crucial ingredient for a company's success, these conferences are certainly something that creates emotional pastiches that are resonating throughout a year.  If the conference "feeling" has to be overcome, you've failed. If it carries forward and remains a pleasant cerebral wash, you've partially succeeded; if it is a high point for staff morale and excitement, customer bonding and analyst good vibe, you've done what you have to.  You've also via the announcements etc. set the agenda for the following 12 months too.  One that you're expected to follow through.

LiNC 2012 was for the most part, an exciting conference, with high energy, camaraderie, some truly great customer stories (the aforementioned Brian Kling of Autodesk), true thought leadership (Gartner's inimitable and extraordinary Michael Maoz with Brian K;  key industry thought leader IDC's Mike Fauscette, with the excellent Lithium Chief Scientist Michael Wu and a wonderful keynote by Altimeter's Brian Solis). There was also a solid and not overhyped look at the direction of Lithium by CEO Rob Tarkoff and founder Lyle Fong.

So that worked really well.   Apparently, so did the party that I didn't attend.

The staff was I suspect totally exhausted by the time the conference was over because they were relentlessly attentive to any and all of the 500 attendees that came.  Kudos to both CMO Katy Keim and Erin Korogodsky for their always solicitous approach to all at the conference.  They did a great job.

However, there are few buts...

Though not a problem this year, in 2013, they are going to have to kick the attendance up by a significant number because the comparative growth reflected at other conferences have them on the low side.  Is this important? Not terribly, but if perception matters, then it becomes so. And, sadly, it does.

That said, the quality of the attendees was amazing here - when it comes to how well they understood Lithium's product. This might have been, judging from my discussions the best-informed crowd I've run across in awhile - and among the most veteran. I know a lot of their customers and they have been to all of the LiNCs that I've been too. Not a lot of churn there, which says a lot for Lithium's involvement with their customers.  They do listen to them and this keeps them coming.  For Lithium, more so than almost any other company I deal with, this conference is seen as an opportunity and a forum to discuss things with their customers, not just a showcase.

The other but... has to do with the influencer program at the conference.  They had nearly 50 influencers, with a decent percentage of some of the most prominent folks in the industry (if I do say so myself). They even had a couple I don't ordinarily see coming to ANY conferences.  But the organized influencer program, which is needed for a conference, wasn't there.  While this is indicative of the need for a bigger initiative, I'll briefly outline why a program is needed at the conference.

1. On the simplest relative level - the other conferences all have them. That governs the expectations that the influencers have.
2. The analysts need 1 on 1 time with executives in addition to the informal time. That means scheduling.  There is a lot of benefit to the informality which is very nice, but Lithium is almost too informal.  Almost.
3. I heard word of mouth about an influencer briefing the first day. I would have missed it if one of the influencers hadn't offhandedly mentioned it to me.  I never had notification. Notification of all influencer events needs to be top of mind and communicated. Otherwise, they won't be able to write about you.
4. An organized program provides a structure that actually can benefit the interactions between the staff and influencers - and prevent or minimize frictions that can arise.
5. It allows the influencers access they need to make assessments they have to.
6. Fifty influencers is a lot to deal with and a company Lithium's size needs to structure it. Plain and simple, or it can get out of hand.

That's all on this one. The broader side of this is covered later.

All in all, LiNC set a great tone for 2012 for Lithium and minus a few glitches they have a lot to be proud of - and now a lot that they will be responsible for.

The Product

If Lithium never had anything but their product to be excited about, they'd have a lot to be excited about. To be crystalline, their community platform is a leading one. It has a strong B2C focus. Because of that they were always seen as differentiated from Jive who is stronger in B2B.  Lithium's solution, which they call a "social customer suite", incorporates good workflow tools, analytics, social media monitoring, an apps builder, and a studio that allows you to fully customize the community that you want to build - and it scales.

From 2009, the product message has been focused around social, breaking onto the public stage with a misconceived "we are social CRM" - which was still convincing enough to have Gartner award them a leadership position in the Social CRM Magic Quadrant in both 2010 and 2011. It evolved to the much better and far more accurate "social customer engagement" - with a couple of permutations in between.

When it comes to thinking ahead to the future of the product they are smart enough to have their labs working constantly on that future. With the work that Michael Wu is doing in the labs on Smart Data, rather than Big Data per se, meaning finding relevant contextual pieces of data among the zettabytes rather than concentrating on the volumes, the platform promises to have, if they can productize this thinking, a potentially brilliant analytics component.   I have no idea if this is on their roadmap; only that it's in their lab.

All of this is interesting background (and foreground), but let's focus on the key product announcement from LiNC because it's the one that can have the most impact on their future. They took some significant steps on the one hand, but they are now moving in a direction that has some peril.

I'll explain.

The Premise

There is a concept that governs the evolution of Lithium's direction.  They are rightfully addressing a maturation of social channels that have taken "social" beyond experimentation (see eConsultancy's State of Social 2011).  Social is no longer the "thing" that will "replace traditional" (it never was). In fact, social is becoming part of business strategy as one set of the channels where customers engage with the brand and/or talk about the brand. Loosely speaking, social is becoming traditional.

Lithium's take on this is to identify two areas where the deeper customer interactions take place. In their eyes, that's customer service and marketing.  The former where the customer is involved in an ongoing way via interactions and the latter where they are directly encouraging interactions that promote transactions. Meaning getting people to buy stuff.

But they also are aware that businesses need to operationalize their interactions with customers. To get that part right, it means identifying the requirements to do that before technology is applied in any way.

So to provide a more complete selection of tools, products, services, and applications i.e. a solution, they announced a number of new capabilities to add to their increasingly formidable options.

The Products

I'm going to do a fast forward on all the products but one - Lithium Response. They announced others, among them:

Social Tornado - a sort of clever name for a professional services offering developed in conjunction with "Crossing the Chasm" author Geoffrey Moore.  This is a four gears assessment - which looks at providing a pretty much state of the art gap analysis and strategic services in four areas - acquisition, engagement, monetization and enlistment. This is aimed at the moment at a niche market - agencies, one that Lithium has a lot of traction.

However, it was Lithium Response that caused the most buzz during the show. This was an OEMed application from, I guess, a partner, whose identity they have oddly decided to keep a secret for reasons that I can't exactly understand. In any case, what Response does is integrate the customer conversations from external sources with internal activity streams and then also provides the knowledge needed to solve the service problem, gleaned from the customer community. It resembles though is not identical to Coveo's industrial strength insight solution in terms of how it deals with the capture, provision and distribution of knowledge to customers based on both structured and unstructured information/conversations.

The strength of this product will be more evident as Lithium expands their integrations with CRM products so that the data captured can be placed in the system of record and acted on. Right now, they are integrated with salesforce.com but are looking down the road at several other CRM vendors, who shall remain nameless until the integrations actually occur. These integrations aren't an option for Lithium, it is a requirement if they are serious about moving into the customer service market. Rob Tarkoff CEO, according to a post on Forbes by Christine Crandall said that Lithium is now the "standard for social customer support" because of Response. That may be true, though it also may be a swipe at Jive as much as anything else.  The more general question raised is, even if it is true, what about the rest of the customer service world, which is not something that can be ignored? And is not "social" necessarily. But we'll get into that soon.

The Promise

The value of delivering these products is that they now have put themselves in a position that will directly compete with Jive for larger enterprise customers. Jive, with its announcement of a customer service community product fired a shot across the bow of Lithium and Lithium fired back.  Response and some of their social marketing offering - which I'll look at in a future post (my usual way of saying, I'm getting tired of writing) puts Lithium in a strong position when it comes to an engagement platform.  They have a good deal of the necessary core components in place - especially the ones that encourage transparency in all its forms.  For contemporary enterprises dealing with the most significantly high volumes of customer interactions on the social web, some of Lithium's offerings can be, well, "a dream come true."  Lithium customers like Autodesk and most interestingly Skype, showed how Lithium products allow them to handle extraordinarily high volumes coming at a high velocity with alacrity.

The Problem

But there is something that concerns me.

There is a vast difference between providing service focused communities, "social customer support" and actually addressing the customer service market.  Strategies for customer service aren't and will never be, purely social. They are multi-channel because the phone, one-on-one-service interactions and email focused service interactions aren't going away. Case management is still and will remain a major requirement for enterprise customer service.  The call center is going to continue to be a major hub for the service experience.  While I heard a bit of lip service paid to call centers - it was mentioned twice - there was NO evidence whatever that this was an actual consideration in how either the products are being developed or the partnerships provided. We heard that Lithium had been integrated into Successfactors and that is a great thing.  We know it's integrated with salesforce.com - another important piece. What they are doing around knowledge capture and distribution via self-service - again, well-conceived.

But that's just not enough at this point.

What I'd like to hear is an announcement of an alliance with an enterprise CRM provider who will integrate Lithium's robust social customer service/self service capabilities with their more traditional functionality.  I think it would be way too much and unfair to expect Lithium to build the traditional customer service components themselves. They are not that company. But a strategic alliance would go a long way to providing what they need to attack the larger customer service market since the bulk of technology strategies that are available to the enterprise incorporate a multi-channel approach.

I don't want to dwell on this too much but I do want to briefly address the similar thing with marketing. Their announcements were focused on social marketing and again, what they are offering in conjunction with Shoutlet, et. al. is a smart first step (for details, read this very good overview by Leonard Klie at DestinationCRM). But even Crowd Factory, who set the standard for social marketing wasn't able to provide the complete package. Marketing automation needs to include applications and services that can serve traditional channels like email, which are still used. It needs resource management and campaign management - all part of marketing enablement. Marketo's acquisition of Crowd Factory sets the bar for social marketing because when Crowd Factory and Marketo are fully integrated, they will actually provide the technology for the marketing program models that are aligned with the direction of the 21^st century enterprise. That said, Lithium could skate just providing the components that they announced and do pretty well - until the customers need to make it multi-channel.  As a component, a window created so that the marketers can not only see but interact with their prospects is a great idea and a worthy product.  Provide the product, but if Lithium is going to meet up with business as it is now constituted, they will have to take the rest of this into account - which a good partnership should allow them to do.

The Company

Let's just say, I have no doubts of the continuing success of Lithium. I have been a fan for a long time.  Two years ago, when I keynoted LiNC, I loved the enthusiasm of their customers and the excitement around their offerings and the great staff they had (and have).  Know what, I still do. All of that is still true.

Now, Lithium has grown and evolved and they are more ambitious than ever.  They have a mature and, to my mind, accurate perspective on where the market is going. They've allowed that to shape their road map to some extent and their thinking definitely.   Bravo to them for that.

There are a few things that they need to do as an organization if they are to get to that next level.  These are not concerns, just simply things that need to happen, as they evolve as a company.

Influencer Relations Program - They need to hire someone who can handle influencer relations in a systematic way and have an organized program to do that. They are stretched now and thus haven't been able to do a good job of keeping a large group of analysts of varying types (see my upcoming "Guide to Influence(rs)"). They are now big enough and strategic enough to do that.  This is a must because it's a significant component in the growth of a company. That means a program that not only handles types of influencers but different types of relations - analyst relations, public relations, investor relations. All part of the game.

Partnership Program Extension - They have come a LONG way from their earlier partner strategy and now have a guy to run that, SVP of Global Alliances and Business Development, Ed Van Siclen who knows his way around. They have excellent technical partnerships but they still lack the key strategic partnership or two that validates their enterprise readiness. A strategic partnership with SAP, Oracle, Microsoft, salesforce.com OR a more publicly strategic go-to-market partnership with an Accenture, CSC, IBM, Capgemini, etc. would also go a long way to that.  I'm not saying the ones I mention here are the right ones. That takes more work than I'm willing to do for a post.  But I'm saying that kind of company for example. I have faith they'll get there but they need this kind of marquee partner.

Thought Leadership - They have a very good creative branding strategy that has done them some good, given them something of a buzzworthy market presence. All good. But they have fallen way off on the thought leadership side with few really conceptually bright efforts beyond Michael Wu's extraordinary efforts. The vehicles are there - digital guides, webinars, collaborations with external thought leaders, speaking at other conferences, ad infinitum.  LiNC showed some real promise in that direction with Brian Solis's speech, the presence of the two external Michaels (see above), the concept they are evolving around social service/social marketing, etc. But that has to be carried into the mainstream where mindshare rests.  They need to do what they need to in order to ferret out that resting mindshare. Michael Wu's stuff is brilliant and groundbreaking. But it's unfair to depend entirely on him - and not enough.

In Sum

Lithium is becoming a major player, even beyond its size and will become even more important as the days go on - of that I have no doubt.  I like them a lot and love their future - of that I have no doubt either.   Actually, I have very few doubts about them, but there are things that they need to address and if they do, then when I write my next big post about them, it'll be real short, because I'll have nothing to suggest they do. Which would be a good thing.  But, in the interim, as they continue to succeed and grow and make an impact on the market, they do have to go to work. They've reached that size where that charming awkwardness that characterizes adolescence no longer works in an adult, no matter how smart, precocious and cute the kid had been.  Make no mistake, they are adult and now they have to do some of the things that are expected of them, given their size, reputation, place in the world, and desires. Let's see how it goes. Betcha they do just fine.