Flashback to January 2007 – Ottawa’s Marketing Gap
“Is there any way to deal with the complaint that there is insufficient marketing expertise in Ottawa to build world-class companies?” said the SCAN editor’s email, which landed very late one evening, but compelled me to answer.
In a nutshell, my view is that Ottawa companies have access to all the marketing talent needed – period. But some common problems exist in many companies’ approach to marketing – such as “too little”, and “too late”, especially on market strategy and product management issues. I’ll cover these, and go over a few other challenges and opportunity areas.
Ottawa’s Marketing Gap – Real or Not?
Ottawa is a regional center, not a hub. Places like Boston or San Francisco bay area are full-infrastructure hubs of technology activity. They have access to all the key pillars of company success – marketing, engineering, research, financial, and strong management teams. They also have companies of all sizes, providing many career paths for personal success. Even US-based regional centers such as Atlanta, Austin, or Minneapolis cannot compare across all metrics – but can still attack new markets and win global dominance. A regional center’s strength will tend to be lop-sided in some way that has its roots in the regional industry history.
In Ottawa, technology developed around Telecom-based engineering and research at Nortel, Mitel, and Newbridge (now Alcatel), and has spun off resources and ideas that show that strength. “Especially in the late 1990’s, an engineering-driven culture tended to be paramount on Ottawa,” said Allan Zander, VP Marketing at Sciemetric. “We had a high number of companies planning a product without a market plan, but this was offset by a truly phenomenal ability to innovate on the product side.” In these engineering-driven companies, however, “the marketing talent often ends up getting turned down – either not hired, not given resources, or not given influence,” as Zander commented.
Too little, too late – For Ottawa entrepreneurs with a strong technical background, business ideas tend to be product-centric – i.e. ‘we could build this’ (and ‘if we build it they will come…’). The questions of ‘who will buy?’ ‘why?’ ‘where?’, and ‘when?’ are given inadequate attention. Finding answers is a full time job for a senior professional (a marketing-oriented “Product Manager”). It involves market profiling, market segmentation, product category and discontinuity analysis, and competitive positioning, to name just a few key items on the work list. Then a good deal of work has to be done on market sizing and price/margin scenarios to determine the options for revenue and profit creation.
“The Ottawa region has lots of little companies trying to kick off something new, but initial commercialization is weak. A lot of companies just look for junior marketing people to write brochures and attend trade shows,” commented John Samuel, a veteran product manager. “This is actually a pan-Canadian problem, based on my 20+ years of marketing experience.” On the career path side, Samuel could not see challenging roles open a few years back, hence decided to take a senior public sector position that allows him to contribute to the Canadian technology industry across the board.
Talent incubators are too few – Another reality of our Telecom legacy is that we have very few ‘incubator’ companies for general marketing talent. Career incubators tend to be successful mid-size companies – such as Cognos, Corel, QNX, and Mitel, who have gained global success in diverse markets, and along the way provided career steps for marketing and sales people to grow. Since the recovery, however, Ottawa companies operate in a greater diversity of markets. This will increase our pace in developing marketing skill, as well as the respect for that talent from technical entrepreneurs and the investment community. Also, OCRI programs, especially in the Entrepreneurship Centre, are creating more training options to develop the marketing talent pool.
Funding issues – Investors in Canadian companies look for technology plays, often a spin off from one of the telecom majors. “They value primarily the technology,” commented Don Hewson, a partner at Hewson Bridge and Smith, and a veteran contributor to Ottawa’s marketing strength. “Crossing the chasm is high risk and a significant investment – so investors start to showcase a company for sale rather than market to build a big brand and a global success. At the same time VCs tend to invest in IP, rather than in Marketing.” The investor pressure tends to favor early exit based on IP value. Ironically, the investors who invest in marketing get huge leverage if a strong brand has been developed – examples include the sale of Toronto-based Intrigue Technologies (the “Harmony Remote”) to Logitech in 2004, and the sale of Gatineau-based CML to Plant (forming PlantCML; leaders in Public Safety Solutions) in late 2005.
Government funding programs cause some difficulties – since they focus on engineering and or research. The IRAP program, for example, specifically excludes ‘Sales’ and ‘Marketing’ hence there is a subtle encouragement to begin engineering work on a product idea before any marketing resource has been funded. Even if the product idea is successful, the business that forms around it tends to be ripe for acquisition by a US company needing the technology, but not ripe for growth as a global marketing success.
Marketing’s place in the organization – Organizational setup has a lot to do with marketing success. Sciemetric has made an interesting move this year; the VP Marketing now has the entire engineering team reporting to him. “We very specifically set our organization up so that product management and engineering report into the marketing team,” commented Zander. “This is to ensure that engineering stays on track with what the market needs and not the other way around.” Similarly, Cognos set up their early Business Intelligence (BI) marketing effort as a separate business unit, headed by Alan Rottenberg, a General Manager with strong sales and marketing management experience. With engineering reporting to a marketing oriented executive, the new BI software unit had a better than average chance of success.
And, with many local companies diversifying away from telecom, I believe we will see a new generation of strong local companies, taking Ottawa’s marketing leadership to the global level.
This article by Peter Fillmore, was originally published in SCAN – MARKETECH in January 2007.