I was just at Borders in Redmond and I had an epiphany: there are no business books about the role that secrets play in corporate marketing, management, and corporate strategy. That's very strange, I think. After all, secrets are among the most important tool a marketer (or an evangelist) has to offer.
If I was smart, I'd keep this fact a secret. I'll bet that a marketing book with a title of “keeping secrets” would make an author a boatload.
Hey, look at Coca Cola. Anyone know their “secret recipe?”
Secrets are part of marketing lore. In talking to tech industry veterans about their secrets, they often say “we can't talk because we don't wanna pull an osborne.”
When I visited Apple computer for the first time, back in 1977, the one thing I remember (other than the piano in the lobby) was the sign on the wall. It said something like “loose lips sink ships.”
When I visited Microsoft's game division last month, they wouldn't talk to me about the next version of Xbox. And, there were some employees there who weren't even allowed to tell me the code name of the products they were working on. Obviously, secrets are important.
SpyZone, a vendor of security equipment, says that companies lose about $2 billion a month to secret theft.
In doing some quick Google searches on the topic, I see there's a lot of articles, like this one from Business Week, about ways to keep secrets, but not much on the role of secrets in marketing and excitement building. FindLaw has another article on things to do to keep your secrets off of the Internet.
Keep in mind, I'm an evangelist for the worst-kept secret in corporate history: the next version of Windows, code-named Longhorn. So, I'm very interested in this topic. Also, keep in mind, that as a weblogger (er, journalist) it's my goal to find secrets and expose them to my reader. This is, in a nutshell, the two conflicting forces that drive me nuts as a corporate weblogger (one part of me wants to share secrets, the other part is into keeping secrets).
Also, keep in mind, I know intimately the value of secrets. I had my modem taken away by Jim Fawcette for a week back in 1994 because I was the one who leaked information about Visual Basic 4.0 before anyone else did. Why did I do that? I knew secrets had value and that it would mark me as a person “in the know.” Sleazy (and, in hindsight, very stupid — some companies sue over these kinds of things) thing to do, but that reputation follows me around even today.
Here's some of the reasons companies keep secrets:
1) To keep your competitors from copying you, which would reduce your chances of getting a return from investment. When people in the tech industry talk about “innovation,” what are they talking about? Secrets! Why are those things secret? Because they aren't ready to ship as products yet and every month of advantage is a month that a competitor won't have a similar product out. ICQ, for instance, came out on November 1, 1996. It took Microsoft about 30 months to get something similar out.
2) To keep from “Osborning” your current product. Adam Osborne killed his company by announcing a product too far in advance of release (his talking about a future product killed current product sales). Already, for instance, I'm getting questions from IT guys about “why should I buy Windows XP today, if Longhorn is the best thing since sliced bread?” (Answer: because XP is here today and Longhorn is gonna be a big change, not something lightly done, particularly in a corporate environment — see Bill Gates comments yesterday about Longhorn being “slightly scary”).
3) To build excitement and expectations in the marketplace. Let's be honest, when I heard about the Segway for the first time (back when it was a secret) my pulse quickened. What could be SO COOL that Steve Jobs thought it was cool? I started paying attention. So did a lot of other people. When they finally announced, it was on the cover of Time Magazine. Think that they didn't use that secret to the utmost effect?
4) To reward top journalists and “influentials.” Last week Steve Wozniak announced his Wheels of Zeus tracking devices. Did you note who got first dibs? The New York Times' John Markoff. That wasn't by accident. (Note that it wasn't a weblogger). I asked Woz for info a couple of times and was rebuffed. I only have a few handfuls of readers. Markoff has millions. And, by rebuffing me, Woz just increased my interest in what he was doing. I even would occassionally turn on his webcam to see if I could see something “secret” on his table.
5) To let the “influentials” know that something is coming. That's exactly why we told everyone that the secrecy surrounding Longhorn and some of our other products would lift at the PDC. That way everyone who needs to learn about our “secret” will be there. Think that all the press and analysts won't be there? They'd be nuts not to be.
6) To give Slashdot something to talk about. I'm just kidding about this one, sorta. By telling people “we have a secret and you aren't gonna learn about it” we challenge sites like slashdot, or ActiveWin, or NeoWin to find out about it, and write about it. Think that's not important? MSN Messenger had tons of users BEFORE it was “officially released.” That's an important part of the hype cycle. (And one that many Microsoft employees don't understand, I might add).
7) As part of a marketing strategy. Lots of PR people try to figure out how to get the most press coverage for a specific product. So, they'll plan timed releases of secrets. I've seen PR people even do research on what other things might be announced at the same time. I've watched companies decide not to release something in November, for instance, because most of the press would be kept too busy with Comdex releases.
I'm sure there are other reasons as well. I'd love to hear yours.
So, how does the industry keep secrets? How does Microsoft do it?
Compartmentalize. I don't wanna use names, since that'll get me in trouble, but a Silicon Valley company I know, keeps engineers on one part of its products from seeing other parts that don't have anything to do with their jobs. This one company is so hard-core about secrecy, that inside its design labs, they have curtains and employees have to use their key card and be photographed to get access to the secrets inside.
Educate employees. Apple, in the 1970s, used to have that sign right by the front door of its only building reminding employees not to talk about company business outside the company.
I've seen companies use those devices, and others (Fawcette had a company handbook, which had a “Scoble rule” written in, which told employees that leaking secrets, either of its own, or its partners, would result in disciplinary action). Microsoft made me sign an NDA.
Peer pressure. one company I know uses this tactic. “Do you really need to know?” employees ask each other. Remember when I first joined Microsoft? What was the first thing even ex-employees wrote me “don't leak schedules or information that hasn't been publicly disclosed yet.” Translation: if you say something before an executive does in the press, you'll be in trouble.
Corporate pressure. Silicon Valley is rife with stories about HR departments that'd fire, or even sue employees or partners who leak information. At Microsoft, I hear those stories all the time.
Job duties Microsoft usually uses this one. Employees are told “don't speak to the press or analysts unless your manager approves.” In other words, if that's not your job, be nice, but turn down the request and hand them off to someone who's job it is to talk.
Security devices When I took a tour of the Windows build lab, I noticed that every CD had some security devices (what they are is a secret and we were asked not to talk about them).
Non Disclosures Ahh, yes, I signed one of those. So, now, if I leak confidential information, the lawyers can come after me and make my life heck.
Keep the pool of people who know small I know some secrets at Microsoft that even my co-workers on my team don't know (and I'm sure they know lots of stuff that they aren't allowed to tell me). The smaller the number of people who have access to something, the better. One of the Silicon Valley companies a relative works for was so scared of leaks about its products that it delayed getting cases for its products until after launch, because it was scared that a vendor — even one that had signed an NDA — would leak.
So, I've typed enough for tonight. Wouldn't this be an interesting business book? I think it'd be interesting to see just how Coca Cola keeps its recipe secret. Oh, but, that'd be a secret too, huh?
Finally, there is sorta a reason I'm writing this. Obviously Microsoft is going to share its secrets with a select group of people before the rest of us get to talk about it. How should Microsoft choose that small, “advance” team?
For instance, if we were to give, say, a handful of webloggers an advance look at Longhorn, how should we choose those five people? No promises, mind you. But, I want to start a discussion. Don't be selfish. Put yourself in our shoes. Should we invite someone who has credibility on Slashdot? How about a Linux guy like Doc Searls? Or, maybe an innovator like Dave Winer or Marc Canter? Think creatively and give me your reasoning. Even if you're just gonna beg me for a beta (I've gotten several of those already — we'll have more news on beta programs at the PDC, from what I hear).
Let's take it out of Microsoft's arena, since I know Microsoft comes with a lot of baggage. If you were a small startup company, and you had something cool to show, how would you decide which five webloggers get to see your product first?
Think this kind of discussion doesn't happen in business? It does all the time. Remember ICQ? It started with 40 users who were given top-secret access. On November 1, 1996 they were released from their NDAs and the rest is history. [The Scobleizer Weblog]