It was actually a company operating in a start-up mode that brought me over to the United States. It was towards the end of the .com bubble and companies were still looking for highly skilled work force they could not find locally. They were ready to bring them over from all over the world.
I was with them for some very fast 5 years and I had fun. I developed a L4-L7 Internet traffic aggregator and traffic redundancy solution in a box (embedded system / intelligent router). And, more important, I had exposure to different aspects of a tech business and learned a lot.
In a tough IT market like the one that came after 2001, this particular start-up was successful. With a lot of hard work, some good strategic moves in re-sellers and partners, excellent tech support and solid funding the company was able to cruise the stormy waters of the years 2000-2005 and grossed some $8 million in sales by 2007. They turned profitable and kept at it. They are still going- some 15 years later- according to their website and I am sure they currently report very solid profit margins.
I left that company in 2005 to move to Florida. A move I made for personal reasons rather than business related reasons.
Since then I’ve been with many other companies bigger or smaller, worked for some large Corporations, a few mid size firms and worked with other start-ups. I kept developing product and I kept both my eyes open. I always trying to understand what makes a company successful vs. non-successful. To eventually be able to start my own business and make it successful.
I’ve seen companies failing miserably and companies sky rocketing like crazy. I’ve seen dreamers and doers. Scientists and street smarts. People who had unleashed potential and people totally over rated.
I am now at a point where I have a really good “nose” on how to spot a good company. Since we mainly work with start-ups it is a very important skill to have under your belt.
Here are some of the “ingredients” I think start-ups have to have to become successful businesses:
(1) Passion in core competency
I did not say just “competency” (there are a lot of competent companies out there). And I did not say just “passion” (there is a lot of passionate people who have no clue how to do things). I said passion in core competency.
So let’s say you love property management in real estate and have a great concept on designing a platform to streamline the work of property managers while helping them out with finding more clients. That’s a powerful proposition as long as you have the expertise and energy to pursue it full blast. Yes, you can hire a software developer (like me) to make your platform. Yes, you can hire a branding company to design logos, business cards and pretty layouts. And yes, you may have a pretty good hand at how to go after your market to get property managers to subscribe to your system.
But because during all these you will run into bumps, rejection, negativity, naysayers, procrastinators, regulations, requirements, security concerns etc. you have to have a little more than just that. You literally have to burn with excitement and be almost obsessed with what you do. While you know a lot on what you do.
So passion in core competency is a key ingredient in making a business successful.
(2) Great execution in sales
I’ve never seen a successful company where the sales teams were not hustlers. And actually I’ve rarely seen a very successful company without a well structured and flawlessly executed sales process.
You cannot hope you are going to make it big if you just make 10 phone calls a day or attend a tech community meeting every now and then. You cannot just say here I hired this online marketing company, they will send me leads and I will close on them. I am on Facebook and Google- that’s it. That will take care of it.
That kind of stuff never works.
Successful companies have significant sales teams with leads generators, managers and execs involved in the final phases of contracts negotiations. They understand well their market (they more likely worked in that market before) and know to get to it. They implement 360 degrees campaigns including industry events and meetings, hundreds of daily targeted calls (as opposed to generic cold calls), targeted e-mail lists, online advertising, social media, professional magazines and publications advertising and even radio and TV ads (yes radio and TV ads are still there even if the online business is taking over). Trade shows and professional organizations events are still big in this industry and definitely worth attending and following up on.
The other thing that is very important in this industry is word of mouth referrals. If you do a good job people will refer you to business associates and friends. It is the best way to advertise your product or service: it’s free and it has a higher conversion rate than the others. So focus on your client first & make sure your current client base is happy then work more on business development.
Long term relationships with clients, partners and re-sellers / consultants are also very important in this business. You are not in this business to make a quick sale and then to vanish. And you are not in business to just send Christmas cards, fancy pens, mice pads, USB sticks and other marketing materials. What you want to do is to develop a multi-year solid relationship with your peer professionals, nurture it and grow it. Help your partners make serious money. Offer a lot. Ask for a little. Your company will grow.
(3) Solid funding
Growing a business takes time. It’s always a marathon. It’s never a sprint. It can be a marathon of little sprints (which is tiresome) but in any case expect spectacular things not to happen fast. Developing serious product may take 6 month to a year for a first version. Then you’ll have feed back from the market and need to implement improvements. Starting to sign in some users may take another year. Signing up a major re-seller or national distributor another year. And so back and so forth. It maybe 2-3 years until you become profitable as a business and set yourself up for take off.
Meanwhile you have to hang in. You have personal expenses, family etc. You may want to have a personal life too even though if you are serious about starting a business, your business should take a lot of your attention.
So get solid funding. Play worse case scenarios rather than best case or average case scenarios. Do your spreadsheets and fund the business to be able to hang in for at least 3 years as if you had no sales.
And start selling as soon as you can. Most of the successful businesses I worked with started to sell early: usually in less than 6 month after they started. Even if they lost some clients due to imperfections of the platforms and defects, they were able to break even in a shorter amount of time than others and had time and money left to fix these things and sign in more customers to become autonomous. Once they became autonomous, they were able to raise more money from investors and then they took off.
(4) Appreciation and knowledge of technology
This may sound a little bias as we are a business in technology. But it’s actually not. I saw a lot of businesses (even businesses in the technology space) that were neither appreciative nor very knowledgeable in technology.
The thing with technology is that it can save you tremendous money and time in both sales and operations. That’s money that go directly into your bottom line. Money that you can use for marketing or to hire your next genius engineer. Money that can pay your rent.
Let’s just take an example of a company that still runs spreadsheets to do sales forecasts. They have sales teams spread on regions, multiple product lines, multiple distributors, complicated pricing strategies etc. They spend hours in meetings and days to prepare for these meetings. The spreadsheets are clunky, extensive and have a lot of pivot tables. They can’t even easily show them on a plasma tv screen in a conference room (I mean they can but it’s a mess to navigate from one page to another and actually make some sense of the whole thing).
Well, there is mobile technology these days that will reduce the time they spend on preparing these forecasts to 50% and their presentation time to 25%. That’s significant time savings! You can actually sell your product during the time you saved from reporting activities.
So, no matter what business you are in, try to stay up to date with what happens in the technology world and always think how you can implement it into the growth of your business. You can also ask your technology consultants (like us) anytime.
(5) Something special in their niche market
I was never a big fan of extensive competitive advantage analyses. It is definitely important to know competition and to have a niche market. But you don’t have to go nuts. Because no matter where the economy is there is enough market for any smart, dynamic and hard working business.
What you have to understand though is your niche market (i.e. small and medium size businesses in the State of FL with an annual revenue greater than X$) and what are some of things you are better at in that niche and price range than your competitors. For this company for example it was their fantastic pre and after sales tech support: they would literally install their router in complicated networks with their hands and in less than an hour without charging extra for tech support. For another company it was the tones of useful feature sets they were offering at a better price than their competition. For another one it was their unique approach to generating fast production websites on the fly etc.
No matter what you do, offer something unique or rare that is of high value for the customer. Customers will flock.
Make it a great day!