The Nightmare of “Ready Fire Aim”

By Rich Stillman
July 15th, 2014

The phrase “Ready, Fire, Aim” (as opposed to the traditional “Ready, Aim, Fire”) seems to be all the rage now.  Do a Google search and there are over 29 million entries.  A best-selling book (by Michael Masterson, a highly successful entrepreneur) carries the title.  Aggressive start-up CEO’s seeking top performers weed out anyone with the old “Ready, Aim, Fire” mentality.  Too Slow.  Too Risk Averse.  So Yesterday.

In his book Masterson says, “Nothing matters more than selling.”  Naturally, we agree.  He says there are three key steps to getting a new business off the ground: Step one: Get the product ready enough to sell, but don’t worry about perfecting it.  Step two: Sell it.  Step three: If it sells, make it better.

But we’ll bet you that even Masterson wouldn’t dare use a “Ready, Fire, Aim” approach when he actually goes and sells.  If he did, he wouldn’t be nearly so successful.  Because translating that approach into a sales strategy almost always ends up being expensive, or a failure, or both.

Taking the “Ready, Fire, Aim” approach when you’re in front of a prospect is tantamount to going into a meeting without investigating the prospect’s industry, or their company.  It means not understanding how what you offer will make a meaningful difference in the business.  Not knowing what the competitive set is and how your offering is different and better.  You can throw spaghetti against the wall and see what sticks.  But it’s messy and wasteful, and the cleanup isn’t fun.

We’ve seen all variations of this nightmare in our work with clients over the years.

We’ve confirmed repeatedly that it pays to take aim before you fire away in a sales process.  Your resources — time, money, people — are constrained.  Use them wisely.  Doing the right amount of analysis upfront (quickly, mind you) allows you to focus on a smaller set of Hot Opportunity Prospects, iterate faster to a proven sales process, and yield more closed business and more revenue than taking the shotgun approach.  You also end up with a more scalable way to generate predictable revenue going forward.

The flaw in the logic held by those that cling to “Ready, Fire, Aim” is believing that if their approach is “fast”, “Ready, Aim, Fire” is therefore plodding.  That “Ready, Aim, Fire” will miss the market in the search for perfect understanding.  That’s hogwash, based on the empirical results of our work with over 140 clients in the past 10 years.  We’ve encountered the financial and organizational mess created by the “Ready Fire Aim” approach more than we care to remember.

Failing is way less cool than taking a “Ready, Aim, Fire” approach when your business is on the line.

Others Online Gets Liquid

By Doug Schulze
July 15th, 2014

Rubicon ProjectRoughly 10% of the time, Altus is fortunate enough to take a client from first revenues, all the way through an exit event. Not bad when you consider the industry average suggests that less than 5% will earn a big surprise check for their efforts. The most recent member to the club was Jordan Mitchell and his team at Others Online, who had invented a proprietary algorithm for understanding what people care about online. We started working with the team in 2008 to define the target segments for his new ad technology, identify and close customers within that strategy.

Fortunately the ad market was red hot, and Jordan was spot-on with identifying the need for better ad relevance to consumer behavior. One of the up and comers in the ad space was The Rubicon Project (NYSE: RUBI) who we secured a meeting with at the 2008 AdTech conference in San Francisco. Once they saw what we had built and validated with early customers (especially Google, who saw a 70% improvement in ad performance), they agreed to pursue a partnership. Within six months of the meeting, we had inked the partnership and tested the technology across the Rubicon Project’s customer base.

Rubicon was very impressed with the Others Online technology and team, and made the offer to acquire in early 2009. 100% of the core Others Online team moved in with the new parents and faithfully delivered on every one of the earn-outs for the next 3 years. Fortunately, Rubicon Project also had a great team and technology, and together, they launched a successful IPO in April of this year, to the delight of all the Others Online investors. As you can see from the photo, Jordan and two of his original team members look to be living happily ever after.

Success Factors for Selling Into Healthcare

By Sean Sigmon
April 14th, 2014

Launching a venture into healthcare is often considered “high risk, high reward.” A solid foundation can take some risk out of your sales model and improve the chances of achieving a big reward. Because healthcare has never been the earliest adopter of broad-based IT products, there remain many great opportunities within the sector. Entrepreneurs that can deliver efficient workflow and patient management solutions, analytics engines, and consultative services that help organizations evolve out of the fee for service model into a cost based model could strike it rich in the next decade. In order to succeed you will have to be resolute, make wise choices and, most importantly, absolutely execute when opportunity knocks.

Know Your Sales Cycle

Due to the highly regulated nature of the healthcare market, selling into the sector takes longer and often costs more than in other markets. It complicates everything from product development to the programs available to the marketing team. With HIT it’s necessary to develop value props around workflow advantages and prove your product solves age old analytical problems. People are cautious in healthcare, and without evidence and supportive beta customers, nothing sells in healthcare.

Encourage your team to report losses openly. You need to understand where you are winning, but it’s just as important to fully understand your losses and address the product features and marketing tools needed to change the pattern. Getting your team comfortable with reporting losses will enable them to accurately reflect the business’ legitimate market opportunity. Understanding when a deal is lost will help you know when to stop investing resources into a dead deal. Mastering the sales cycle will also help you be tenacious when things aren’t going your way.

Choose Partners Carefully

Large distribution companies thrive in healthcare. These groups are often challenging to manage, demonstrate little loyalty when things aren’t going well, and frequently underperform. A big reason for this lack of performance is that healthcare products are complicated to learn and demand more training time and more formal processes to develop a high performing team. These factors don’t always mesh with distributors looking to drive fast sales. Healthcare has an extremely high rate of specialization and therefore you need to be sure that your distribution partner’s broader book of business is highly aligned with your product or service. If you don’t have the “mind-share” of those reps, your product will never come out of the bag.

Deliver Again and Again

Epic, one of the nation’s most successful Electronic Healthcare Record (EHR) suppliers, built its business in a slow and methodical way. It took them almost 20 years before they were the market leader and they did it mostly by doing what other software vendors struggle with—meeting deadlines. Healthcare executives are risk averse and willing to reward for proven results.

Think of it as an evidence-based market where the evidence isn’t always just medical data in a clinical study, it’s proven in the form of highly targeted beta sites with CTOs, CFOs, and clinicians willing to speak openly about the success your product brought their institution, or the money it saved them. Successful selling in healthcare demands good reference accounts and you won’t earn those endorsements unless you deliver time and time again.

“Land and Expand” is a common tactic that can work in healthcare. It really helps to understand which department may influence future buying habits from other departments. It will help your team identify the correct champion necessary to shepherd the deal to success. There are only about 1,000 large hospitals in the U.S., so it’s also a good idea to make sure the first sale into an account can be leveraged again and again.

SUMMARY

Despite efforts to curtail healthcare’s growth it remains the largest sector of the U.S. economy—almost 20% of GDP. There are incredible needs in the field around informatics, security, care coordination, and research to drive clinical breakthroughs. There will always be competition and internal challenges, but if you are tenacious and execute when opportunity arises, great rewards await you in healthcare.

5 (Hundred Million) Reasons to Look to Europe to Grow Your Sales

By Michael Ricks
February 11th, 2013

You work hard every day to sell and deliver great products and services. Your customers love you and investors wax optimistically about your future. Every quarter, you do more, better, and faster. Could you still be missing out on an important opportunity to increase profitability and enterprise value? The marketplace is globalised and increasingly competitive. If you are not growing in Europe, consider these five good reasons to start, now.

Reason 1: You already did the hard part, now you can cash in.

You have already made the investment to get your product or service right. Consider replicating your rollout in a less competitive market. Seize the easiest market share that you will ever win, the first-mover market share of a market with no competition. Much of what you have learned the hard way at home regarding customer needs and segmentation will give you a head start in new markets. Changes necessary to satisfy overseas regulation or language requirements likely require only modest additional investment. Amortize your investments and fixed costs over more units to create greater profitability.

Reason 2: You can reduce your risk.

Is your profitability sensitive to an economic downturn at home? Hedge your risks by generating revenues in countries with different economic fundamentals. Wouldn’t now be a great time to let the buoyant German economy drive sales, picking up the slack for flagging US turnover? With good reason, US firms’ foreign investment increased 27% from 2010 to 2011, with over half of that investment going to Europe, according to the Congressional Research Service.1

Do you source overseas, making currency fluctuation a concern? Consider how growing internationally could allow you to bank some Euros and stabilize your profitability.

Reason 3: You can acquire new customers more easily.

Have you got competition at home? Your product or service may be one-of-a- kind in a new market. Alternatively, the market for your product or service may be more developed, with a wide base of potential customers who already understand your value proposition. Consider that the European Union, with over 500 million inhabitants, has more potential customers for most products and services than the United States, but is potentially underdeveloped precisely in your sweet spot. Did you know that 14% of revenue of the S&P 500 companies comes from Europe?2

Reason 4: You can let your existing customers pave (and pay) the way.

One of the most promising growth opportunities is to follow your existing customers into new markets. If happy with what you are doing for them at headquarters at home, your customers will be pleased to have the opportunity to roll out your value proposition to their overseas operations. They may even distribute to other customers for you.

Reason 5: If you don’t, somebody else will.

Copycats are more than willing to duplicate and transplant your products and services that are successful in the US in new markets, harvesting the fruit of your labor. It was Apple’s Steve Jobs who said, “Good artists copy, great artists steal. And we have always been shameless about stealing great ideas.” Once established, copycats may even block your subsequent entry to new markets. Proactively seeking growth opportunity in new markets and moving swiftly to introduce your proposition, on terms, can be decisive to bolstering your firm’s long-term value.

While it may make sense to get it right in the US first, for most ventures, it’s never too early to plan for international growth. You may well be able to rewrite your equity story by increasing revenues and profitability, reducing risk, and growing and protecting market share while cashing in on the unique selling proposition that you have worked so hard to achieve. You have several options: exporting, joint venture, and direct investment. Altus Alliance is on the ground in Europe and can be your guide in understanding customer needs, establishing a “market-driven baseline”, then guiding you on your journey to create sales traction abroad.

Sources:
1 http://www.fas.org/sgp/crs/misc/RS21118.pdf, retrieved 11/21/2012
2 http://www.reuters.com/article/2012/07/02/us-markets-usa-earnings- europe-idUSBRE86105D20120702, retrieved 11/21/2012

What and Who to Look For When Hiring a Sales Executive

By Kathi Jones
October 12th, 2012

The reality of every early-stage company is that there comes a time when you have to acknowledge the fact that your company needs a sales leader, and it’s no longer you. My assumption is that you’re a founder, or you’ve been brought in to “gently” take the company from the hands of the founder. But, either way, sales is currently a part of your role.

The operative word here is PART—part of a long laundry list of things like raising money, dabbling in marketing, managing and motivating people, and all the things that fit under the nebulous and ever changing bucket of “etc.” Sound familiar? If so, then it’s time to bring in sales experience, but what do you look for and who are they?

“What” you look for is dependent on a number of things, like your experience and interest in sales, the state of your product and if you’ve determined the market for your product or service. It may also depend on whether you have a sales process in place and what your funding situation happens to be. And then there’s whether you have a long or short sales cycle, and if you currently have sales people or you’re a one person sales team.

“Who” you look for is a bit squishier and more driven by your company culture and current team dynamics than anything else. Questions around integrity, what drives them, their focus, and leadership style are key in the “who” aspect of your hire.

To simplify getting to the “what” and “who” we’ve created a list of items that may help you design a checklist for this important addition to your team. Since the average sales professional’s tenure is about 19 months, you want to do everything you can to beat those odds, and that takes thoughtful consideration and a plan.

The following lists can help you create your own exclusive pros and cons list that leads you to the best hiring decision for your company.

What type of Sales Leader is right for your company? Who is the right sales leader for your company?
Can they recruit and develop a sales team?

This is key in any leadership role, but pivotal in a sales leader. They must be able to not only identify top performing sales people, but they have to convince them to leave a job where they are likely making good money. They have to be able to sell themselves and your company. They must also be able to coach salespeople, helping them adopt successful sales behaviors that lead to outstanding results, while creating a level playing field by objectively evaluating each team member’s performance.

Are they high integrity and are they motivated by all the right things?

Many people think that sales people are just “in it for the money”, and many are, but the most successful salespeople make lots of money without compromising their integrity. This is key in a sales leader, as they set the tone and culture of your sale organization, and without clear boundaries you may have sales people who take shortcuts in the hopes of a quicker outcome. They also tend to be the first to leave when a sales cycle is too long or they find another opportunity that allows for a “rebel” approach. A sales leader without clear boundaries has not instilled solid values in the sale organization and you are ripe for issues both inside and outside your organization.

Do they have a sales process and is it tested?

Any great sales leader has a process that is tested, but more important is that they are not a slave to that process, but are able to adapt their processes to reflect how customers are buying. They also must create analytics to ensure continued improvement across the sales organization. Basically, they must be open to adding, adjusting, and deleting aspects of their process and possibly reinventing the entire process. They must be life-long, continuous learners who never seem to settle. And they must be able to adapt proven processes to new scenarios and get their team to embrace and live with these processes as effective instruments for generating business and improving revenue productivity.

Do they have a competitive drive and a passion for what they do?

Running a sales organization in an early-stage company is no easy task. Whether an experienced consultant or a full-time sales leader, you need to find someone who doesn’t rest on their past laurels, but who is as passionate and driven to succeed at your company as they have been in the past. And I don’t mean succeeding at all cost, that goes back to integrity, but someone who approaches each challenge as a new opportunity to succeed in ways that far exceed what they have done in the past. They also need to be able to identify sales people with the same competitive drive, the same integrity, and the same focus on building a career not just hitting a few big wins and moving on.

Are they good at forecasting? Can they think in to the future?

All executives need to be somewhat of a fortune teller, but sales leaders need to be almost psychic at projecting what their ability is to deliver on a sales goal. The keys to success in forecasting, and more importantly hitting that forecast, is knowing their people’s strengths, their individual levels of optimism, and what drives them; this coupled with an uncanny ability to anticipate what is happening, or about to happen, in their market and the economy stacks the odds in their favor and in turn, yours. This is a unique skill of a successful sales executive that is really worth drilling in on.

How do they work cross departmentally? Can they manage up?

When you are starting a company or in a small internal team of a larger organization this becomes a very important attribute. Having a sales leader who understands the importance of marketing and appreciates the value it brings, one who understands that a solid relationship with development is a recipe for product success, and one who has the ability to help all members of their team understand the importance of open, honest communication (remember, sales is your most direct access to the Voice of the Customer) allows you to trust and get many more items off your checklist than ever before. A sales leader who is not afraid to tell you that they are missing the mark, or about a bad outcome with a customer, is one that will also come to you with a plan and be hell-bent on coming back next week with better news. Those that are secretive and float around the halls never stopping at the water cooler are sales leaders to avoid.

Do they have domain expertise?

This one is a tough one, as there are two solid camps around this question. Many CEO’s believe that a sales leader must have domain expertise to succeed. While domain expertise is a plus, I believe it is not as important as finding a sales leader with solid fundamentals. Top sales leaders can play in a number of domains and it is often extremely advantageous to have someone with a new or different perspective when you are bringing a new technology or service to market. Remember, the best sales leaders are creative, professional, articulate, adaptable, and most importantly life-long learners.

Do you need a Director or VP of Sales?

This question is driven by your sales experience. If you have solid experience implementing and driving a sales process, hiring and motivating a sales organization, are a “closer”, and want to “hold on to the sales reins”, then a Director may be all the fire power you need to start to off-load some of your sales responsibility. If you have had no sales experience (and what you are currently doing doesn’t count), then you will want more fire power by adding a VP to your ranks. And remember, if you are going the consultant route, you can get a VP with years of experience that will look and feel like part of the company, down to carrying your business cards and being listed on your website, for a very competitive price.

Do you need a full-time sales leader or an experienced consultant?

The answer to this question can be driven by the stage of your company, its product, your funding, and your sales experience. If you are early-stage with no process and no sales team to speak of, and you have never hired one, then a consultant is the best way to go. You can secure higher level expertise and experience at a lower cost, allowing you to build a solid foundation for the future. The risk of a mistake is also minimized. If it doesn’t work out it’s a single conversation that allows them to find the door versus an employee that could take months to exit and that exit may even come with an associated cost. And if you have cash sensitivities, the decision may be solidified, as an experienced consultant can come in with solid processes, tested tools, years of experience, and hit the ground running at a fraction of the cost of a full-time sales executive. Do you have enough disposable capital to pay the salary of a full-time sales executive? (Consider: base, bonus, benefits, equity, etc.) If not, then a consultant is your best bet.

If you are far enough along to have tested processes , have an existing sales team that needs a leader other than you, are ready to scale, and you have the financial runway to bring on a sales executive with an average price tag between $180-$300K, and your culture screams for a team member who is “all-in”, then a full-time sales leader may be the answer.

Do they fit your company culture?

Everything we have talked about above drives toward this important question. Is your company culture focused, driven, and powering toward selling an initial customer at all cost? Or, are you more systematic, process focused, and methodical but still moving at a fast pace? Are you a micro-manager who has your hands in everything, or are you a hands-off manager who delegates effectively and depends on your leaders to deliver? The culture you have created, and are working to preserve or evolve, needs to be considered when adding any executive, or employee for that matter, to your team. Be sure that you are not just making a “gut” decision here, but validate that feeling and make sure you know what you are getting and that it fits your management style and your company’s cultural needs. Adding one new person to your team changes it forever, adding a leader has an even bigger impact.

So now you’re ready to create a profile for your sales leader, and design some solid questions around those attributes and experiences in order to weed through candidates. Whether you decide to do the search on your own or bring in a recruiter, knowing what you are looking for and how you’re going to go about finding it will be key to your success. You create strategic plans for numerous decisions involving your business; this decision should be no different and will be one of the most important decisions you make. When you finally find someone who seems to be a fit, has all the right attributes and experience, be sure and do as many reference checks as you need to in order to feel confident that you’ve made the right choice—and this goes for either a full-time employee or a consultant.

The sales executive you hire, regardless of whether they are a full-time employee or an experienced consultant, is in charge of your most precious and important assets: customers and revenue, so take the time to think it through and understand “what” and “who” your organization needs to be successful and then go find them.

9 Steps to a Successful First CRM

By Steve Dearden
August 21st, 2012

Sooner or later, any group selling a product is going to need to adopt tools to consolidate the data and track/manage the sales process. This usually means a CRM system. When to implement a CRM system really depends on a number of factors, like the number of prospects and customers, the number of sales people, and the complexity of the sale. When the time comes, how you go about adoption will enormously affect the value you get from the tool.

We are not going to review tools and provide recommendations here, because other than obvious differences like cloud vs. local/server based tools, most CRM systems have similar feature sets. But before you chose the tool, it is vital that you understand how the tool will be used, and what each of the stakeholders in the organization is going to require from the tool.

The process MUST start with the sales team; each salesperson can (and will) use a rich feature set differently, so it is critically important to plan how the tool will be used before adoption. Without planning, you may end up with as many use models as you have salespeople.

Just like a finance department would not fire up a new set of accounting tools without carefully mapping the tool into existing accounting operations, a sales team should do the same before adopting a CRM system.

A structured approach to implementation is critical to success, and, in our view, more important than the choice of tool. Many sales managers, CEOs, and IT departments focus on the what, not the why and how of implementation, and then are less than happy with the results.

So what is the problem?

Small ventures may have only a few customers, their sales processes may not be complex and involve just a few touch points within the customer organization. For these ventures, managing the sales process amongst a few individuals using spreadsheets may be more than sufficient.

As the number of customers grows, and the number of sales people increases within a new venture, management is confronted with the problem of how to consolidate and interpret all the information that is being tracked by individuals on the team—to derive forecasts, metrics, and opportunity tracking to run the business.

For this to work, the implementation has to drive consistency in data capture and individual behavior – it has to provide an objective lens to monitor the business. This implies consistent and continuous use by the sales team. Adoption by all team members is essential to success. In turn, this means that each person on the sales team has to feel the tool is valuable to them.

Uses of CRM by constituent.

From the individual salesperson perspective, a new CRM system can be a painful requirement that management imposes on their daily activity. After all, for the individual contributor (and smaller ventures) a spreadsheet with good notes is often sufficient. If the CRM tool has too many options, is complex, slow, and difficult to use, isn’t this eating into valuable selling time? Management is going to ask a bunch of questions anyway about the forecast, so why spend time on a cumbersome tool?

CRM implementations driven by IT or by senior management naturally focuses on the summary data as the prime objective, so their needs are often what drive implementation. This top down approach can ignore the criticality of adoption by the sales team.

So how do you in implement a system that gives sales and corporate management the summary data they need to manage the team and the business, and the individuals something that helps them organize and sell?

Understanding the uses and needs of the constituents in the diagram, and the quality of the data entered by the salespeople is the key to CRM success.

Here is a suggestion based on our experience from numerous Altus client engagements:

  1. Understand and document your typical or idealized sales process. Draw it in a diagram, and review with the key sales people. Will the process as drawn and all the deals in process mapped to this diagram facilitate them getting the job done with low overhead for the tool? Will it help the individual salesperson to organize and follow the process? Use the KISS principle here.
  • What are the important stages in transition from a contact above the funnel, through qualification, development, and closure? Keep the number of stages to a minimum; 5-7 stages should be your target.
  • Keep the terminology simple.
  • Think about process and gates. What has to happen (process) to move an opportunity to the next milestone (gate)? You should be able to answer simple yes/no questions for the gates. Is this lead qualified? Have we delivered a proposal? Do we have the PO?
  1. Then, and only then, pick the tool you are going to use. Choose one with room to grow, but also make sure that features can be turned off or hidden by the administrator. The first implementation should be simple, so make sure you can scale the product back. When making your selection, think about the process from the perspective of the individual sales user:
  • What is the information needed for them to track and close each opportunity?
  • What is the information needed to track contacts and accounts?
  • What correspondence and history is needed to record progress?
  1. Are there critical pieces of information missing? If so, go back and add them to what the sales team needs to input and work with. Will it then provide the metrics management needs to run the business? If the answer is no, then what additions do you have to make to Step 1 to get the data needed? Remember the balance between sales adoption and desire for greater management visibility. If you add too much, you actually may end up with less meaningful data.
  2. Consider operations. Usually it is best to use manual interfaces to start with; figure out where the interfaces between sales and operations are needed (for example, scheduling and provisioning a live demo). Work these systems and workflows manually until you really understand how they operate and what expectations, checks, balances, and approvals are needed. Then automate the process within CRM and other software components used by operations.
  3. Finally, look at executive management. Can they get the data they need from dashboards and summary reports? If they are really missing critical information, then consider going back to Step 1, but always look at alternatives for getting the same information first. The more you make compulsory to the sales team, the harder it becomes to achieve 100% adoption.
  4. Take the sales process and map it to the tool. This may mean working on drop-downs and disabling features. Salespeople can and will design their own way of doing things if you don’t establish standards. Similarly, leaving many features open will confuse the users and make it difficult to drive consistency. You need to make sure the tool is being used consistently, so take away the options—otherwise, summary data will be impossible to extract and interpret.
  • Decide what fields are compulsory vs. optional for an opportunity to move through the stages. Remember, focus on the minimum data set you need for the salesperson to do an effective job. Email address for a qualified contact might be a good example.
  • If you have decided that you only want to see percentages like 10, 25, 50, 75, 90, and 100, because they mean something in the process you documented, you have to prevent values like 49% from being used. Set the field up to only accept the entries you have decided are valid options.
  • For important summary data like lead source and lost business reason it is imperative to keep the number of choices restricted so the system does not accumulate data that is less than valuable. Discourage free text input for fields you may want to search on or gather data. “Trade Show,” ” tradeshow,” and “Trad show” will summarize into different data columns. Decide on the categories for these fields and use drop downs, where the user can only pick from a set of fixed values. Free text is appropriate for descriptions and notes.
  1. Run a pilot in parallel with your existing system (spreadsheet). For the individuals in the pilot, is it simple and easy to use for them? Is the consolidated data meaningful for management? Are there areas that you have not thought of that are being questioned by the pilot team? Take their feedback seriously and be prepared to act on it. Are there additional controls you need to construct or process steps that you need to clarify?
  2. Train and go live with the rest of the team. This needs to be a smooth process, and you may want to think about incentives during the start-up phase to get everyone onboard quickly.
  3. Monitor results and be prepared to modify the process and the tool as the organization grows.

Careful planning and implementation is critical to the early stages of CRM in a new venture. Focus on the primary user, the salesperson. The process they have to go through is key to CRM success. As the organization grows and scales, you can add features and have the tool grow with you.

“Hurry, Don’t Rush”

By Tom Crawford
June 12th, 2012

Did you ever go hiking into remote wilderness areas? Remember the urgency in packing your gear, leaving early, and getting out on the trail? Experienced hikers know that hurrying is ok, but rushing can be dangerous. Less well known is that similar dangers apply when a company is identifying target market segments and planning how to go to market.

Managing a fast growing business is not for the faint hearted. Everything is new and needs to be set up from scratch. While management focuses on product development and market segmentation, they also are seeking capital, hiring key executive team members, and anxiously trying to find decent facilities for the next nine months. Whatever isn’t urgent and important at this moment soon will be, and all these tasks need doing. Unfortunately help isn’t available. Money is tight and frugality is the norm. The existing team has to get it all done, long hours or not.

Decisions made in this type of environment all have a sense of urgency, being made quickly and often with limited data. Getting decisions “mostly right” by using short-cuts is standard practice. Under these conditions, hurrying—even rushing—to a “good enough decision” is usually needed and even preferred.

But not always.

There are some critical areas where short-cuts and “good enough” decisions can lead to trouble; lose-the-company type trouble. In these areas the company must hurry, but not rush. Hurry to get to the decision, but not rush the decision resulting in an incorrect one. In this context, hurry conveys rapid decision making, but with care and diligence. Rushing conveys taking short-cuts and prioritizing a decision to move forward rather than reaching the right decision in a rapid manner. Given the normal decision-making process of growing businesses, recognizing the subtle difference between hurrying and rushing—and being disciplined to treat them differently—is not always easy.

The critical areas that should not be rushed usually have at least one of two characteristics. First, they require significant investments (time, talent, resources). Considerable confidence in the decision is needed if these investments are not to be squandered. The second characteristic is that the impact of a wrong decision is not easily corrected. One example of a “hurry, don’t rush” type decision is the hiring of a member of the senior management team. A wrong decision here causes management disruption, wasted ramp-up periods, and time spent correcting missteps. This is too high a price to pay for a wrong decision; such a decision simply must not be rushed.

A company’s decisions on its target market segmentation and the creation of a solid go-to-market plan are also critical areas that must not be rushed. Specifically, the company must identify the important first target market segments and align the requisite ingredients for a successful market launch. This effort involves many topics: customer needs, buying habits, product features, marketing deliverables, sales tools, support. Getting all this right is difficult and takes time.

The segment identification and go-to-market planning should be tightly integrated with product development. However, these decisions are too frequently left to when the product is “complete.” Much of this go-to-market information is dependent on customer feedback and can’t be generated inside the company. Collecting the information can be time consuming and is exacerbated by the fact that a few go-to-market activities can only be completed once the product and target segments are locked. Last-minute changes in product development bring intense pressure to “rush.”

Some may not consider these areas so critical. Maybe the go-to-market costs are not very expensive. Or, perhaps there are a number of likely segments and the time to optimize the targeted segments is significant; why not pick one and run with it? What’s the harm? This is equivalent to a hiker choosing a trail that looks “sort-of” right rather than studying the map—and backtracking if needed—to insure he is indeed on the correct trail. Being on the wrong trail can cost the hiker inconvenience, considerable trouble, and even death. Getting the target segments and go-to-market program wrong can bring similar results to a company.

What are the results of rushing? One set of consequences is internal. The company wastes an enormous amount of time, talent, and resources. If the target market segment has not been properly identified, significant sales efforts are wasted—like the hiker wasting his effort on the wrong trail. Salesmen and channel partners become frustrated by difficult, lengthy sales cycles with disappointing results. Pressure builds to close sales at any cost—even if unprofitable and bad for long-term business. Sales forecasts are missed and management, board, and investor scrutiny becomes onerous. The company, just like the hiker, gets discouraged when moving down the unexpected path.

The second consequence of rushing the segmentation and go-to-market is more external. Customers get frustrated trying to understand your product or get bored and lose interest. Without a tightly coordinated go-to-market message, even the right segment customers get confused and tune out. In both cases, a positive first impression is lost. Case studies and references (if any can be done) become less compelling. Like our hiker—bewildered, lost, and in danger—a company’s management, investors, and board can begin doubting the whole business plan and company direction.

Three management abilities are needed to prevent rushing decisions on target segmentation and go-to-market plans. First, management must recognize the need for well thought out decisions in these critical areas. Second, management must have the discipline to resist the temptation to rush. The lure of earlier revenue or the fear of missed schedules can weigh heavily on the executive team. Resolve to “hurry, don’t rush” is needed. Finally, management must recognize that some of these critical decisions will never be crystal clear. There is always uncertainty that further study won’t eliminate. These three management abilities require a “team” view rather than individual department perspective. Team members must work together to hurry to the right decision, rather than rush to a wrong one.

A sudden change in weather can dump enough snow to make a hiker uncertain of the return trail. A hurried—but not rushed—decision is needed to bring the hiker home safely. Making rapid decisions with care and diligence is quite different from rushing to a snap decision. Both might end up being wrong, but the careful and diligent path renders the best possible decision given the situation. The rushed, snap decision is a gamble. When deciding on customer target segmentation and go-to-market plans the choice should be to hurry, but don’t rush.

Are Contracted Execs Right for This Time in Your Organization?

By Dave Jones
April 7th, 2012

Recall the cliché “a rising tide floats all boats”? As our economy begins to pick up steam, it becomes increasingly important to make sure your revenue operations are running at full throttle so you can take full advantage of the rising tide. To do this, should you hire full-time employees, outside contractors, or some mix? Business is becoming more and more comfortable with the idea of contracting highly skilled and experienced execs with successful track records to tackle challenging business problems and to help accelerate current growth or simply get the train back on the track. What better way to maximize upside potential and mitigate risk of failure than to hire someone who has done it before. Recently, I had the opportunity to catch up with Paul Travis, author of “Leadership on Demand: Why Smart CEO’s Use Interim Talent to Drive Revenue.” I asked a few questions about his perspective on the question of how, where, and when interim execs can add the greatest value to new ventures.

Altus: Can you describe what you mean by “Leadership on Demand” in the context of leveraging outsourced executive talent in new ventures, be it large or small companies?

Paul: An analogy will help here. Fluorescent light bulbs typically have a high cost (surge) when turned on and commonly take some time to “brighten,” but over the long term, have lower operating rates which offset that initial costly period. Incandescent bulbs, on the other hand, by their nature, have a constant output and cost, which is more efficient than fluorescents if the lights are going to be on for a relatively short time. The W2 senior executive represents the fluorescent bulb—the interim executive, the incandescent.

Now come the two dynamics which are unaccounted for in the analogy. A) The extreme rate of change involved in new ventures, when you consider the overall rate of change, and B) The “Performance Vacuum” discussed in the book, which occurs during the customary 3-9 months it takes to hire a permanent W2 sales or marketing executive—between the time the need is determined, through the interview process, and the on-boarding process.

In this light, pardon the pun, the CEO or board is wise to engage “Leadership on Demand” rather than this critical work being unattended to—or worse, being spread among the rest of the senior team. In that same 3-9 month period, the interim (instant-on) leader may well have identified structural changes or opportunities that result in the long-term (fluorescent) hire being more precisely defined—for better long-term success.

Altus: What do you think are the greatest advantages of utilizing interim sales/business development management in the current economically challenged environment in early stage businesses and new ventures in larger companies?

Paul: Whether a given business is experiencing new levels of hardship or opportunity in the current business environment, the truth is that the future is less predictable than ever. Greater levels of global competition, and increasing cycles of change resulting from technology mean that business models and competitive landscapes can change overnight.

Interim revenue-generation leadership is particularly well suited in these times, because of the ability to match the skills set with the unique challenges of the moment. One of the case studies from the book that comes to mind is the company in Canada that replaced a sitting VP Sales (who was exceptionally strong in his comfort zone) with an interim who was able to modify the sales process to more appropriately fit the company’s new direction, which resulted in huge payoffs for the company.

Altus: What is the right circumstance or timing to exercise “Leadership on Demand” and seek out contracted sales or business development expertise?

Paul: There is no one “right” circumstance. In fact, in the book we address some of the qualitative aspects of the decision-maker or influencer that usually has the courage to consider something outside the “norm” of the way we’ve always done things. They include a recognition that business process is not keeping up with increasing rate of change availed by technology and a level of trust that the groundwork/systems/process brought by a senior interim exec will benefit the organization long after they have moved along.

Altus: What advice would you give to a CEO who is trying to determine if an interim VP Sales/Business Development executive is the right approach, or if a full-time VP Sales/Business Development is better suited?

Paul: Learn from the experiences of others, even if you think your situation is “unique.” The book has detailed case studies—both pro and con—that will help inform your decision.

Altus: In your book you talk about the merits of Generalists vs Specialists. Can you elaborate on where these different skill profiles are best utilized in a new venture?

Paul: While there certainly is a time and a place for generalists and another for specialists, we heard from most of our interviewed experts that new ventures experience such fast revenue model shifts (aka “pivots”) it can be difficult to keep specialists in the wings. Once a business leader has settled on a particular revenue model, the interim generalist will have defined a scalable process, proven the case, and identified key attributes in hiring the long term, W2 executive.

While this is not a radical “rocket science” shift, we have found that this new engagement mindset takes time to sink in. The next best step, if your curiosity has been piqued, is to pick up the book—execs have told us it is just right to absorb on a two-hour flight.

CEO Profile: Mark Hoebich

By Doug Schulze
December 14th, 2011

Mark-Hoebich-PhotoPart of the growth strategy for our client, Reed Elsevier, was to build a subscription data business to complement the ad revenues of their entertainment division, Variety. We also recommended that they explore acquisitions to accelerate that plan. Mark Hoebich, founder and CEO of TVtracker, had suggested a similar strategy years before, and effective July of this year it all came together. Below is an excerpt from an interview with Mark that we felt speaks to the challenges of bootstrapping a company to success.

Mark is the classic entrepreneur who knew “there has to be a better way.” While at Fox Television, his task was to constantly track all the new projects across the other broadcast and cable networks. So in 1999, Mark set out to build a B2B solution to track the activity and players for the entertainment industry, and then charge a subscription to the networks, studios, and industry firms who all need accurate and current information as to what is going on in this ever-changing industry. Within the first year he was able to pay back his investor (his father), and a year later turn profitable. To date, he has acquired over 250 of the leading entertainment brands and owns the leadership position.

Altus: How did you fund the company to get started?

Mark: I took out a $20k loan from my dad and paid it all back with 8.5% interest six months later. We got traction pretty early, but I kept things very lean and did not really take a salary. I ended up selling the company [the first time] to iFilm in 2000, which enabled me to draw a salary and expand the company. But in 2001 I decided I wanted to buy the company back. So again, I did not take a salary but tried to pass everything I could through the company. I remember my bookkeeper once said, “Mark, you are paying all your employees more than you are paying yourself.” But I knew that is what had to be done, and knew nobody is going to work for free besides me.

Altus: Why didn’t you take on additional investors?

Mark: When I took the company back, we felt like we had been a little bit burned. We had seen how disorganized so-called ‘larger operations’ can be, and in 2001 there was no investment dollars in the market. I always knew if I brought in investors I would have to give something up. I felt like we had the right people and the right model and should just do it! In hindsight, it was a great way to do it actually. It really forced us to be smart, think lean, be clever with marketing, sales, and product – and really became our culture, which also aligned with the culture of our customers.

Altus: What have been your most proud sales or revenue accomplishments?

Mark: It became interesting to me how you realize you are your own biggest obstacle in terms of sales. Because it’s your baby you want acceptance, and I would end up pricing the product to ensure a win rather than its true value. You end up believing your own value system. And in my case, within a niche and fixed market size of entertainment, there are only so many customers. So l later discovered I needed to raise my prices to achieve our full potential. I found that the most difficult part was walking into those sales calls convincing myself of a premium price. The thing that changed our business most significantly was when I decided to tell companies that we charge based on the size of their company. That model ended up being very successful to increasing our revenues and nobody would challenge me on it.

Altus: What was the biggest mistake you made within Sales and Marketing?

Mark: Oh my god, every mistake…every mistake. Most were spending too much on glossy materials and premium marketing campaigns that would yield zero sales. Our guerrilla tactics were always the big revenue and brand generators.

Altus: What key measures do you use to track sales effectiveness?

Mark: I measure my salespersons’ effectiveness based on the number of sales meetings they setup. I believe if you are presenting to enough companies, then the product will ultimately sell itself. The salesperson, no matter how good or bad they are, can never get in the way of the product. Just get in there!

Altus: How would you define greatness in someone from your sales team?

Mark: I always tell my team that you are entitled. It’s a little like the book The Inner Game of Tennis which is about knowing and believing you are entitled, an equal member in that relationship. In our case, when we reach out to someone, we believe we have something that will really help [our prospects] and when you believe that they are not going to hear fear in your voice, they are going to hear that ‘gentle calm.’ It is that confidence and non-arrogance that will make a salesperson successful.

Altus: What advice would you give to entrepreneurs or division heads leading a new venture?

Mark: My dad gave me some advice when I started TVtracker and said you are going to have 150 things to do every day and you are going to get addicted to Things To-Do lists, where you add and cross off tasks, but to always remember the number one thing on the list should always be Sales. Sell it. Get the money in.

Product Marketing is More than Ready Fire Aim

By Steve Dearden
April 18th, 2011

Steve is part of the Seattle practice and brings experience in IP licensing and software services, manufacturing and devices sales to the Altus team. Email Steve with questions or comments.

Ready Fire Aim

Ready Fire Aim

Ready, Fire, Aim is a frequent joke among startups. There is some truth to it, of course. A young company cannot know all the ways in which the market and its customer will respond. In this post, I’ll share some thoughts on how to shift that phenomenon to preparation, focus, and execution.

While there are many pitfalls along the startup path, one of the earliest problems new companies face is identifying, acquiring and nurturing the customer base that is optimal for growth. Finding those customers who have a clear need for the product or service, are willing and able to purchase, and ideally become enthusiastic advocates once they become users; fueling the early expansion of the startup. An additional challenge is that many tech products are solving a problem that customers may not even know they have (think about a better contact management or project management or document storage solution).

Finding this best customer is not as straightforward as it sounds. There are several factors at play between a fledgling company and enduring success with a loyal customer base.

Problem: Even with social networking, no one has heard of you.

Often early stage entrepreneurs with great ideas produce products that are new and innovative. Even though friends, business contacts and other engineers rave about the product, the company still fails to get revenue traction. Revenue does not expand as expected, and new customer acquisition turns out to be much harder than anticipated. Those critical early adopters don’t materialize.

Preparation: What are the 3 most important benefits you provide your customers? Just as important: How you are finding these new customers? How you find them is often as critical as finding them. What are you doing to help those customers find you?

Michelle Riggen-Ransom, co-founder and CCO of Providence-based start-up BatchBlue Software (makers of social CRM BatchBook) recommends a two-pronged approach. “Certainly create accounts in Facebook and Twitter and make sure you are engaging and responding there as you build your online network,” she says. “But don’t neglect the power of making connections in real life. Some of our best customers have come attending local meet-ups, conferences, or when we’ve sponsored an event.”

Problem: A “product for everyone” has high value for almost no one.

When the new product or service has many potential customers, in many different industries or groups, there is a tendency to make the product generic to meet the wide range of marketplace tastes. By making the product “generic”, often it does not have enough value to any one group of customers to be compelling. Instead of being adopted by multiple groups of customers, penetration into each segment is limited because the product has not been “honed”.

“There is a benefit to casting a wide net when you first go to market,” counters Riggen-Ransom, “But you should have the flexibility to adapt once you see where you are picking up traction.”

Execution: How do product enhancements get prioritized?  Who is providing input to that process? Of all the potential customer types, do you know who will be compelled to buy the most, who will buy first, and who will buy again? Conversely, are you willing to throw your plan out the window and create a new one if it looks like your initial assessment was incorrect or changes once you’ve launched your product?

Problem: Crawl, walk, and then run.

While long term success for the business may require acquisition of large customers, it is better to prove technology and sales process with smaller companies first. Targeting the so-called elephants in the room (large customer prospects) as the first and only customers can lead to disappointment.

Focus: Regardless of company size, are you asking yourself why you lost a deal or why you won it? The answers can reveal gaps in your customer communication process.

Problem: Drinking too much of your own Kool-Aid.

Just like finding bugs in a piece of code is hard for the person that wrote the code, many companies have their own image of what their products mean to their customers and what value they provide.

Surprisingly this is often without talking to the customer to really understand how the product affects their lives or business. Without truly “getting inside the customer experience”, there is no way a fledgling company can really understand what it is they offer. So they need to develop an understanding what customers think about the product or service and its value to be successful.

Preparation: How do you regularly communicate with customers? Is there a communication process or flowchart guiding what you say and when? Given the social nature of customer service today, do you have a social media plan?

Problem: Jumping into a crowded pool.

Is there an “obvious” customer out there? Many companies go to market believing there is an obvious customer that will be easy to reach. This may or may not be the segment that will be the best in terms of profitability, top line growth and enduring customer loyalty. The “obvious” customer segment may be crowded with competitors, with price competition and margin erosion. There may be so many product alternatives that customers feel no need to be loyal. From the customer perspective the choices boil down to price and availability, there being little or no meaningful or significant feature differences between the multiple offerings.

Focus: How are you segmenting? The biggest segment is not necessarily the best. Early gains and growth are critical. Pick the segment that can give you early gains, not the one that looks like the largest.

Conclusion: As your customer base expands, and you start to take on more customers providing more features and delivering more value, you will find that these preparation and focus questions can keep your execution on track. Ready, Fire, Aim will not be in your vocabulary but replaced with preparation, focus, and execution. Or, as Michelle from BatchBlue says: “Research, Reassess and Repeat as necessary.”

Image Credit: cliff1066™