High tech startups often spend the majority of their time on the development of their product. Many run out of money because the sales revenues don’t come in at the rate necessary to fund the operations and growth of the business.
Those startups focused on individual consumers or departments may rely upon digital marketing, trial/demo usage, mobile in-app purchases and viral marketing.
Those startups focused on enterprise-wide solutions have a more difficult challenge. Enterprise-wide adoption of a new product or service is a negotiated choice among multiple groups within the client organization. Each group will have its own goals, expectations, awareness and abilities. Therefore, multiple discussions and customizations are needed to win over the varied stakeholders in the decision to buy and use the new product.
A capability to discuss and customize the startup’s innovation is essential for generating revenues from an enterprise product or service. And, discussions require a sales force, distribution and partners. Setting up effective sales channels in a hurry and get them up all to speed can be a problem fraught with risks and disappointment if a wrong hire sets you back three or six months. These tasks require different skills than the engineering, design and operation of a core product or service.
Who Are We?
We have set up sales forces, business development programs and solution delivery for firms in the past.
We have done so internationally, so we are familiar with the trials and tribulations of international expansion. We have created forums for customer executives to experience new solutions and work through their internal choices of where and how to adopt the new technology. These efforts have required insights into the target customer industry, operations, regulations and the specific company history and competitive position.
What Do We Do That Is Different?
Fundamentally, we believe that the software and service business is tougher today than it has been in the past. In the early days of software development, there was a shortage of software. Your offering of a product would pretty much guarantee you trial of your product. Today, even new products face competition from 20 or more competitors. Some are American. Some foreign. Platform technology providers often absorb or develop capabilities that supplant the startup’s independent offerings.
For many companies, this high degree of competition means considering different routes to market. Services, solutions, or experiential delivery of the value are the new way of gaining customers.
Companies considering cloud computing may not have considered issues such as server-less computing where the cloud functionality takes care of the database activities.
End User Sales Cycles
Most sales and business development people think in terms of prospecting, qualifying, gaining interest, closing and repeat purchase. We think there is a different equation at work today. It goes as follows:
● Time to qualify – with online reviews and social networks, many prospects have self-qualified by deciding in advance whether a proposed technology is suitable for their use; they likely have gaps in understanding and mistaken expectations
● Time to interest – trials, demos and freemium self-service options are often considered as quick confirmations of interest and fit, yet the single tester may not fully appreciate the impact on other key stakeholders in the enterprise; the startup is challenged to find and engage the key interested parties within the customer
● Time to close or conversion – while “click-through” agreements are accepted for single user and single department agreements, an enterprise will require agreements that incorporate their policies, regulatory requirements and operational commitments
● Time to competence – insights into the customer situation can show that the quickest route to a significant benefit lies in areas other than the initial contact
● Time to productivity – the key in a hypercompetitive, constantly innovating market is to achieve widespread usage – multiple groups, multiple use cases, lots of connections create high switching costs – which requires time and effort to understand and satisfy the needs of multiple groups
● Time to repeat purchase or large scale purchase – there is a ramp curve to starting from zero to the total available usage in a customer; rapidly climbing the ramp drives revenue, customer value and likelihood of attracting other customers
● Cross selling – creating reasons for continuing dialog opens the door to new services and products and greater lifetime customer value
What many companies miss out on is the support work necessary to drive through the whole cycle. A common misconception is that it is a numbers game. Fill the pipeline at the start with as many as possible and the statistics of the progression will take care of the rest. Many sales forecasting reports are structured with some or all of the steps, above, along with expected conversion rates at each step.
An effective sales execution program can drive both shorter time in each step as well as higher conversion to the next step.
Partner and Distributor Sales Cycles
For many companies, assisted sales execution often seems like an irrelevancy. The business model is built upon direct marketing and direct use by the end user. But for technically difficult projects or ones where time and effort are constraints, the customer may not have sufficient expertise or time available to make a product successful.
These are the kinds of markets where an intermediary – whether consulting, value added consultant (VAC), independent software seller (ISV), or value added reseller (VAR) – can often play a strong role. They can provide the bodies, the knowledge and availability of people to get a project up and running. And they can play role in encouraging increased usage and upgrades.
The Product-Service-Solution Life Cycle
A Minimum Viable Product or MVP is a common strategy for getting a product to market quickly. But it’s important to keep an eye on what the customer values and determine where they might pay for different or more functionality.
Bundling an MVP with attached services can often provide a half-way house for solving a customer problem. However, active management the development process should incorporate learnings from users and customers into the agile development of the product.
This cycle of MVP, MVP plus services, a semi-custom solution, a productized service needs to be part of a product plan. In some businesses, the eventual goal may include creation of an experience that encourages a product decision.
We can assist technology-based startups over the full range of a product life cycle, including:
For many startups, the initial product definition has not been validated against a competitive market landscapes. We can provide an assessment of the opportunity. This assessment include a business plan and product plan.
Product can be launched in different ways. The Go-to-Market strategy may follow a traditional path of meeting with industry analysts or a more guerilla launch based upon user adoption.
Initial Test Market
Large companies are often tempted to do large launches, but smaller, test-markets often provide significant learning. We can help identify an appropriate test market.
After the test market, sales activities need to scale in to the rest of the market. The expansion can be done in waves or at a national level.
Internationalization and International Launch
While English is an important language, internationalization of content is often important to international success.
Validation and Re-Launch
Often companies don’t achieve the success they had hoped for. The product manager/marketer may have misjudged the market. We can provide a quick third party view of the initial strategy and marketing plan.
Often your customers are unsure about the direction and project portfolio. We can lead clients through a facilitation exercise that helps them identify their business mission, strategies, critical success factors, strategies, implementation and IT strategies. Or we can help them with prioritizing their IT investments. We have extensive backgrounds in business strategy, IT strategy and the various technologies they should be considering.
Doing Business With Us
We are open to various ways of doing business. Projects can be fixed cost and narrowly constrained. Or, you can hire us on retainer for less well defined support, where you are unsure of your direction. Talk to us or email us.