Our Copernican Shift for Category Creation
In this talk, Grad Conn, CMO at PROS, will discuss the importance of category creation for technology companies transitioning from the early stages of growth to established market players. Drawing parallels with the "Copernican Shift," Conn will emphasize the necessity of focusing on the needs of organizations to drive breakthrough thinking and innovation. The talk will highlight that technology companies typically concentrate on their technological capabilities during the initial stages of growth. However, once product/market fit is achieved, the most successful startups undergo a significant transformation, pivoting to category creation. This process entails a change in perspective, similar to the astronomical revolution initiated by Copernicus, who determined that the Earth orbits the Sun.
According to Conn, successful technology companies must make a similar mental shift, realizing that their solutions revolve around the needs of their customers, rather than being the center of the universe themselves. By concentrating on addressing organizational requirements and challenges, companies can fuel innovation and enhance their value proposition. Conn will share examples of how PROS, a leading provider of AI-powered solutions, has embraced category creation in both the B2B and Travel sectors. By identifying and addressing the unique needs of these industries, PROS has been able to deliver groundbreaking products and services that cater to the evolving demands of businesses and travelers.
To conclude the session, Grad Conn will share his enthusiasm for the exciting future ahead. By fostering a culture of category creation and adopting the Copernican Shift in perspective, PROS and other technology companies can continue to push the boundaries of innovation and deliver solutions that truly cater to the needs of their customers.
Full Transcript
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Grad Conn: What I'm about to tell you is completely true. ____ Johann Gutowski was running down a hallway, holding a manuscript, running quickly. Stones were hurting his feet, lightly clad and thin shoes. He was running as fast as he could because he knew that the man he had to give the manuscript to was about to die. And if he was late, he'd miss it....
Speaker 2: Nope, nope, nope.
GC: Wanna take you back in time to 480 years ago today. This is completely true. It's May 24th, 1543. We're in Frombork, Poland, and we're gonna talk about the death of Nicolaus Copernicus. Who was Copernicus? Do people know? Okay. It was 480 years ago, so that's okay. Copernicus was a mathematician, primarily, also an astronomer. Wrote a book that looked probably a lot like this, called De revolutionibus. And he was a deacon also in the Catholic church. And the Catholic church had a problem, which is they had a really hard time predicting solstice, getting Easter right, the mechanics of the celestial universe were hard to manage. And so they hired him to come up with a new set of calculations to improve their ability to predict the motion of the universe. What he ended up doing is challenging some conventional wisdom. But he had the epiphany that began a scientific revolution. And that book, Johann was able to hand to him on his deathbed. And the reason he wanted on his deathbed was because it was heresy, as most paradigm shifts are.
GC: And Copernicus didn't want to go through the pleasures of being a heretic. [chuckle] So he had the book published, took the book 50 years, but it changed our world. So what was this epiphany? So this is the universe as the ancients and up to 1500s, 1543 thought the world worked, which is that the Earth was at the center of the universe. Now, I'm gonna give them a bit of a pass. Like it's not a totally insane perspective. Like go stand in a field for a couple of days. I do this all the time once a year. Stand in a field, okay? And then just notice what happens. In the morning, the sun comes up, goes overhead, goes down, next morning sun comes up over there and goes overhead, goes down, everything's moving around you and you seem to be on pretty stable ground. And it seems pretty flat. This is not a bananas perspective because it is your perception.
GC: The problem with that perception is that you can't explain the retrograde motion of Mars, you can't predict the solstices, nothing really made sense, because the problem is that the reality is that the Earth goes around the sun. And Copernicus's giant epiphany was, hey, maybe we're not the center of the universe. Maybe we are going around the sun. And even now it's a tiny bit wrong, and I'll talk about that just near the end. And so this thing which is shifting from Earth-centric to sun-centric is called a Copernican shift. Copernican revolution is what kicked off, and generally it's seen as what kicked off the scientific revolution. We are all sitting here today with our little tiny devices and all our stuff that we have in our lives because of Copernicus. So we owe him a great debt. Of course not everybody buys in.
GC: There's still a very vibrant Flat Earth Society. They think that the Earth looks like this. Ha, ha, ha. Okay. But there's a new offshoot rebellious free-thinking group from the Flat Earth Society who say that the Earth is actually a rhombus and is shaped more like a donut. So this is a theory that's out there. So I say woohoo, donuts, right? And so a special treat for everybody that sat in the front tables, their voodoo donuts is a local amazing donut place, and they actually make a donut called the Homer donut. And so this table here looks like a great table. So you get... And you can maybe share with this table over here too, just in case, but you get a box of Homer Donuts. So there you go. And you're welcome. So [laughter] I've never actually done donuts in a presentation before.
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GC: What do you think? I think I like it. Okay, so now there's other examples. I'm gonna go through these relatively quickly, but this idea of Copernican Shift is a paradigm shift. And you heard yesterday in Andres' keynote, he was essentially in some ways talking about a paradigm shift, when you're being disrupted, undisrupt right back. And paradigm shifts are an incredibly important part of how we succeed in the world as humans. So there was a paradigm shift of discovering the world of microorganisms. We didn't know that that world existed. There's a paradigm shift of understanding the theory of evolution. How did animals come to be? How did we come to be? There's a massive paradigm shift with plate tectonics. You know, we live on shifting plates.
GC: That's where earthquakes come from. That's how we manage that. There's a big paradigm shift, some would say, for the worst in what's called Moneyball, that it's not the players, it's the stats. That's a huge paradigm shift that's changed sports. Streaming, think about, used to be you have to sit down 9:00 o'clock on Thursday from a CTV. We don't think that way anymore. Social media, anyone can be a news outlet. Total paradigm shift. Quantum computing, it's not ones and zeros, it's everything. Like, spend a reasonable amount of time with quantum computing, people and your brain will start to bleed out of your ears. It's crazy, but it's a massive paradigm shift that's gonna change everything.
GC: Genome editing. We're really just organic machines. We can change our machine. The big paradigm shift. The cloud, and this is a huge paradigm shift. The paradigm shift here is to unlimited computing. Think about how our lives have changed with unlimited computing, and it has driven everything we've been talking about for the last couple of days in artificial intelligence. The unlimited computing power we have is what's making AI possible. So these paradigm shifts are all around us. And so I'm gonna talk about a paradigm shift that we've had at PROS and show you a few things just to kind of talk about it because we had this paradigm shift in between the last time we were all together physically and this time. So this is the first time we've had a chance there to talk about it together. And so the PROS Copernican shift was from a product-centric universe.
GC: So we used to think of ourselves as a group of products, sort of products that we sell to a lot of B2B businesses like Smart Palm and Smart CPQ and products that we sell to the travel businesses like revenue management and offer marketing. That was kind of how we saw our universe. And then we made this reconceptualization of what we do at PROS, and that reconceptualization is to move ourselves to a platform-centric universe with the products circling around the platform, right? So the products are the planets orbiting the platform. And then imagine around each of those products, there's a bunch of tiny moons. And all those tiny moons are the industry-specific data layers that allow us to make it relevant inside each industry because there are different considerations, and that allows us to predict and optimize in this system.
GC: So I thought it was kind of a cool way of thinking about it. And we've not spent a lot of time together talking about the PROS platform, and I'm the marketing lead for the company. And I would say we're not doing a deep job on describing the platform externally right now either, but we're gonna start doing that. So what I'm gonna show you today for the next sort of 15 minutes will be a description of the problem we solve, in kind of a new format, which I think is kind of fun, and then a reasonable deep dive on the layers and components of the platform. You're thinking this is all gonna be about donuts, but no, we're gonna be talking about ETL connectors in a second. So, let's go here. So let's start with the problem. And you know, it's funny 'cause like a lot of the problems that we solve are hard to describe. So we've actually taken a reasonable amount of time to come up with this next series of visuals to try to talk about what we do and the problems that we're solving. And I'm gonna start with a very simple example. Let's assume we own a mine and we have some raw materials. Okay? Just maybe it's a lithium mine or we're supplying a battery factory, doesn't really matter.
GC: Raw material supplier. So they wanna sell those raw materials to a factory. A factory wants to buy it. Okay? So far, so good. Not that complicated. Put them on a ship, put them over to the factory. All is good, right? No, no, no. Hold on a second. Okay. This is gonna be a lot more complicated than that. Because there's like basically five steps in this process, which is step one to do this, you've got to determine the sale price. What's the sale price for the product? But you'll notice a bunch of waves have appeared, the water's getting a little choppy and what's going on? Well, there's a lot of other things to think about and all of these things are being managed very much in a manual, back and forth human way.
GC: So I've got to work all that through, okay, fine, no problem. Step two, I've got to structure the deal. What products does the customer acquire? Well, now pirates have appeared for God's sakes. See, they are. Okay, so pirates are there. What are the pirates? Pirates have got a bunch of questions. It means a lot of questions when it comes to structuring the deal. And again, all of this stuff is manual and back and forth and people asking questions and tribal knowledge and all that kind of stuff. Okay, fine. Maybe it gets simpler. Okay? So we're gonna just complete the transaction. Just let's just get this checked out. Well, sharks appear. So the sharks mean we've got more complications, right? More things making it difficult, more things, making it challenging. Where do I sell? What channels am I on? Okay, step four, I just wanna pick, pack and ship this thing, right?
GC: Whirlpools, okay, well, a whirlpool tells me we've got a bunch of more questions as well. And then I'm just gonna do the final step, reconcile the books, calculate my revenue. But then, you know, kraken, right? By the way, wasn't that a heartbreaker? Any Seattle Kraken fans here? Oh my God, I can't believe they lost. Anyway, so Kraken appear and what does that mean? There's a bunch more questions here. And the point of this, and these actually, these questions that we have here, they're all drawn from actual customer interviews and customer testimonials. And if you kind of put it all together, what you've got is you've got this very, complex system, right? You've got massive complexity across all these kinds of questions. And you've got all these different things being run in a manual basis with emails and faxes and people using Slack and back and forth.
GC: And so this is why sometimes the job feels so hard. But a lot of this is invisible 'cause we don't lay this all out. But this is what makes it hard. This is what makes it confusing, this is what makes it difficult. I was just looking at two, of course. We live in a multi-customer omnichannel world, so obviously the minus supplying a couple of factories. So you've got this process now amplified across that, and then of course the factory's making this stuff for somebody. So they've got suppliers that they're shifting stuff to as well. And all of those processes that we just went through are all being repeated over and over and over again between all these little different islands.
GC: I could keep going, I could just keep amplifying this and keep, you know, I told someone then they told someone, then they told someone, but anymore, and my designer said that, Ah, he'd kill me. So that's we're gonna stop with this slide here on the complication. And so the issue is like, well, what, how do I visualize what PROS does and how PROS helps here?
GC: And we came up with this idea, which is... And this also comes a lot from what Andres was talking about yesterday, about digitizing, automating, and leveraging AI, which is really to elevate above, put in the bridges and connect all these things in a seamless way. And so this is sort of like the PROS platform and allows us to connect all these systems and deal with all those questions in that buying process so that people are able to manage in a more logical way. So, that is sort of the first one. So now I'm gonna get into the platform a little bit more. And a couple things I wanna talk about. So I'm gonna go back to the solar system stuff a bit. And so I wanna just, we live inside a solar system, right? So I think it's really important. Typically, when you do your marchitecture diagram, and that's kinda what I'm gonna be showing you, marchitecture diagrams typically are just your product, right? Sort of in absence of anything else in the universe. But that wouldn't be true. So basically, the PROS platform lives with a bunch of other constellations and things like PSS and the GDS and the CRM systems and all that kind of stuff.
GC: And so one of the first order bits for us, one of the most important things for us is having strong API connections to all those other systems. Man, that's something I think PROS does exceptionally well and has been doing it for a very long time. And then to bring all that data in has built ETL connectors that allow that to happen very elegantly. So we can build a common database, and I'll sort of show that in a second. Andres talked a little bit about some of the facts and figures around the platform. It is kind of amazing. My favorite number is the 3 trillion transactions. It's my favorite number for one reason, which is, it's a huge number. And I'm a marketer, so marketers always like to talk about really big numbers. It's always really cool. The second thing is that, that's a lot of training. We talked a lot about AI, we talked a lot about algorithms, but the training data set is really the magic. And we have a massive training data set. And so that makes our AI really smart. So what I'm gonna do is, I'm gonna flatten this planet, this Earth and so we'll give a tip of the hat to the Flat Earth Society. And I'm gonna build a bunch of layers here and just go through what is in the platform. So I talked about the APIs.
GC: So they allow us to seamlessly integrate with all the existing systems. And in most cases, there are either no-code or low-code integrations, and allows us to do this very, very rapidly. And so we can, connect almost any system out there. And then we've built a whole set of ETL connectors that allow us to bring in any kind of structured and unstructured database, relational, flat, all that kind of stuff. And this is really important because, as you look at that earlier diagram with the sharks and kraken, what's happening is that there's a lot of different systems, and a lot of those systems are offline, a lot of those systems are manual. They're systems that require a lot of connection and trans-modification to bring them in. Level two is what we'll call system resilience. And this is our sort of scalability, reliability, observability sort of efficiency systems, spend a lot of time on this because of the level of transactions that we're running, but also because of what kinds of transactions we're running, which are business critical.
GC: So there's not... We can't be down. The system has to be up all the time. So this is something where we spend a lot of time and attention, and there's a great team on that. Level three is what we'll call data core. And so this is a common data core, which is a unified, optimization data model. So it allows us to be able to bring everything together and start to run the AI on it. Level four is what we call PROS Protect. And PROS Protect includes governance, so role-based access, things like that. Security, there's... Obviously we're working with the world's largest organizations and companies.
GC: We need to make sure that we have the most secure platform out there. Privacy, privacy obviously a huge issue around the world and lots of different privacy regulation that we're fully compliant with. And then compliance. And so compliance standards, ability to audit, audit trails, all those kinds of things that are so important in any kind of enterprise grade application. That's all on the PROS Protect level four. Then on top there's level five, which is... And this next two levels, level five and six, are kind of interesting because essentially there's PROS Predict, and then there's PROS Optimize. So what happens is that the AI will predict an outcome, right? And it'll take your data, and it will use... And these algorithms can be chained. So you can create pretty sophisticated predictions and allows you to then have an understanding of what something's going to be and then to take some action on it.
GC: The second next layer, which is optimized, allows you to, in real time, take action on those predictions and make the changes that you wanna make. And one of my favorites is we have a fuel price prediction engine that we built originally in the oil and gas industry for obvious reasons. And, but it's like one of those things where who doesn't need to know what the future price of fuel is gonna be? Like, I would suspect that anyone in the airline business may wanna know that, and anybody who's driving trucks around and all that kind of stuff. And so a lot of these sort of prediction engines can be chained together to provide a really accurate future predictions.
GC: And then level seven is PROS Reporting. And one thing that not everyone is always aware of, but we have these waterfall dashboards called Profit Waterfalls that are fantastic, and they allow people to see the ups and gives and takes that allow you to really think about profit and revenue optimization. And then, there's a modern UI on top of it. We're using React. So the UI that's built, in PROS is... Have most modern components. It's a great team on that, and that has been, built out over a number of years, but it's got some of the industry standards and some great reviews from the analysts on it. And then on top of that are the applications.
GC: And then on top of that are modules, and we have many, many modules, but you'll see sort of more of those being exhibited. And that's sort of the PROS platform. And what we'll do is you'll start to see this sort of on the website and you'll see us start to talk about it and you'll see the platform sort of identified as an entity unto itself. And if you've got any questions or feedback or input on it, we'd love to get it. You're the very first people to see this, and you're the very first people to see the previous diagrams. And so if you've got thoughts, input, you've got the app, give me sort of anything you wanna give me. This is like my ultimate focus group of our sort of best friends. So, let me close with going back to Copernicus.
GC: So let's say goodbye to Copernicus. It really is amazing. Don't you think? That was literally 480 years ago today that he died. Like, I'm not making that up. That's like literally actually today. So I thought that was an amazing, I thought that was a great example of kismet. And I think the thing that's kind of interesting about Copernicus is that he got it sort of right, right? So what he got right was that the earth was circling around the sun, but what he couldn't know at the time and what he sort of quotation marks "got wrong" is that this is actually the solar system. I don't know if you've seen this, but this is a more recent visualization that's been popping up. So what's happening is that the sun is moving through the Milky Way at nearly a million kilometers an hour, 828,000 to be exact.
GC: And it's essentially think of the sun as a comet streaking through the Milky Way, and we are kinda captured asteroids in its tail, corkscrewing around it as it sort of blasts through space. That's not something that Copernicus could have figured out at the time, but that's really what's going on. And when you think about that, it really does make 20 mile an hour speeding violation kinda silly 'cause we're already going a million miles an hour, come on. Anyway, so this is my LinkedIn code. If you wanna connect with me, I'd love to connect with you. I'll be around obviously for the rest of the day. Love to talk to you. Input and feedback on what we're talking about in terms of the platform and the problems we solve will be highly appreciated. And thank you for your time and enjoy your day. You've got a great panel coming up. So, stick around for that. I know I'm looking forward to it. And then you'll be seeing me with Stephen and Stefan, on the CRO, CFO conversation in about an hour and a half. So that should be fun as well. Thanks very much. Have a good day.
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