By Ann Grackin
Recently I was encouraged to write a book about
the technology market. In discussions with publishers about
writing this, I began to realize how long it would take
to get some of
these thoughts into the market. It might be too late before
you read this.
It’s not that this is the first time I have tried
to advise software firms how to grow. Many of you know me,
and those who have taken the advice have generally prospered.
And those who have not, well, the record speaks for itself.
I remember seeing presentation of one of my heroes—Demming
(around 1980}—and witnessing his frustrations that
the Japanese were listening to him and his own countrymen
were not. It is frustrating when good firms and good ideas
miss their mark, lose market share and miss the opportunity
for a lasting leadership position. And I am incredulous at
some of the deals that have gone down. Really—what
were they thinking!
I have been encouraged by my existing customers to clarify
some of these core tenets. Here is the essence:
- Own the whole process—transaction, translating
and point-to-point delivery of the data-THINK BIG!
NEVER NEVER let an existing customer buy from your competitor—what
ever it takes! Never let anyone in your space.
achieve on Customer Sat.
- Activate. Don’t Implement.
- Stick to Your Message—if
you have many customers, you must be doing something right—but
let others redefine your space with you out of it!
Here are a few examples—names withheld to protect the guilty.
A was over $100M in sales—a public company.
They had a decent run in the market, but only owned a portion
of the process, as a data intermediary. It would be easy
for customers to switch. I recommended they form 2 strategic
partnerships (company B and C) that would put a worldwide
lock on the global transaction. This company had failed
to move forward on this strategy. Today their stock is
low, their revenues are down and Company B is the hot topic
of the industry. What is this costing company A? What’s
it worth to be a $12 stock vs. a $3 stock? Company A will
probably now not be ablet to attract company B because they now lack
market appeal or capital to attract either company B or C to work
- Company M entered the US market with several
hundred customers to its credit. EAI was its hallmark,
but that’s not
what it was called in 1995. They could have been the BEA,
WebMethods, etc. But, lack of positioning, poor vision,
etc. plagued this firm. This company has redefined itself,
gone through several mergers. I had the opportunity to
advise several management teams here. They did not consider
onslaught of EAI vendors who came later a threat. There
are more chapters to this story, but space does not permit.
week, after more than $180 million in investments, and several
repositionings, its was sold for $1,000. Really! The
phrase is “nominal consideration to the stock holders.” Really
nominal! Like point .000001!
- Company J is a similar story—world-class
capability in Order Management and Fulfillment. In the
very early days
of the Internet, it was clear that ordering on-line was
going to be the core application. My team encouraged this
to web enable their application and educate these ‘e
kids starting on-line shopping about their solution. And
once on-line ordering was working, the issues would quickly
move from ordering to fulfillment. After the e wave was
already in force, they (rather than web enabling) bought
web module (not core to on-line ordering). New companies
came into the market to deliver on-line order management—with
very little functionality at the outset. Today, they power
some of the world’s biggest sites. The management
of this company told us they did not see their role on
Too bad, they don’t have too much of a role in the
market now, either.
An article of this size doesn’t allow a full disclosure
of a blueprint. And there are many positive examples of firms
who built quality companies on these principles. But here
are some thoughts about these core ideas or rules to consider.
Ideas to Consider
Own the Whole Process Complete
the product roadmap.
Complete the product roadmap. Think of the future
and lead your customers there. End to end processes,
verticalization, utilities to enable and manage/maintain
the software, etc. If you are making acquisitions,
don’t buy businesses that have huge debt, customer
sat problems, etc. Taking on water may sink your boat.
I can think of a list here!
Never Let Your Competitors In
Be the expert—support quirky needs of the
customer. If you just focus on short-term costs and
give them a reason to go elsewhere—they will,
and might never come back. I can think of several companies
that denied the user certain needed functionality.
They aren’t here now.
Over Achieve on Customer Satisfaction
Make sure implementations are focused and fast—the
first rollout should be less about consulting profitability
than market share. You can make a lifetime of money
with a customer if you satisfy them right from the
||Six Sigma in implementation will give you phenomenal
bragging rights in the market place! The opposite may
bury you. If you live through it, the cost of digging
out will be very dear, and damaging for life.
Users—who is advising you about the health and
future of these companies?
- For Investors—think
about the return to your investors!
- For Software
firms—warning Opportunity without
response? Procrastination is a Killer!
ChainLink Research, Inc.