Of course advice on scaling any business is dependent on the stage you have reached. So let’s frame this post in terms of size. I’m going to assume your software business is generating annual sales between $5m and $25m. And you want to scale to $100m. The following list highlights what most software companies are not doing well:
Simple Story Telling: So often the web site is used as an opportunity to say more instead of less. All software has code, features, specifications, bugs, but that’s not what the story should be about. You need to simplify the product down to outcomes for specific audiences. Why would the world miss you if you were gone tomorrow? What is life like before and after I use your product relative to my specific role? Personal, outcome based, authentic. I like the Carbonite approach – Carbonite backs up your files automatically, so you don’t have to. Or the 37 Signals approach – Making collaboration productive and enjoyable for people every day. Those are both great starts to a dialogue. You are intrigued. You feel you want to say, tell me more.
Product Launches: As a start up, you want the product launched, used by early adopters and hopefully paid for by your first customer. But as you scale, a degree of sophistication is needed. The secret is alignment. I call it the DSMO model. This stands for Development, Sales, Marketing and Operations. It ensures that when a product is launched the whole company is aligned behind it. The key is to ensure that no one area gets ahead of itself. There is no point in a great product shipping on March 1st and then discovering the marketing team have not built their storybook, or their lead generation campaigns or the sales team is poorly trained. Or the operations team has no clear guidance on how to invoice the client or is unaware of the various pricing models. So creating parallel lines is the key with one overall project champion in charge and separate heads for each discipline; development, sales, marketing and operations.
Metrics & Dashboards: What gets measured gets done. We can measure anything these days! Of course that is the problem. A jugular metric is a beautiful thing. It could be a summary of your SaaS renewals performance. It could be the trend line of sales per sales professional. It could the Trailing 12 graph of lead generation that shows you are flat lining despite higher investments in marketing. But whatever it is, it needs to measure stuff that matters and be compared with other metrics that confirm your conclusions. The metrics need to be aligned with big audacious goals. Summaries are key. Even IBM’s profit and loss performance can be reduced to a 3 x 3 metric. The three key business units down the side and 3 columns for this year, last year and % change. Details sit behind the big stuff. All financial variances can be summarized for example into two simple reasons – volume & yield. I often ask CFOs to tell me the story behind the numbers. Give me insight into the dozens of lines of Key Performance Indicators. What actions are these metrics telling you to consider? Software companies are great at measuring everything but just like everyone being responsible for a task, so often everything and everyone translates into inaction, lack of leadership and execution that falls short. Each manager needs to define metrics that matter and needs to define who is responsible for action when metrics call for it.
The Sales & Marketing War: If you are in sales it’s very easy to believe that the grass is greener on the side, the marketing grass. No sales targets to nail every week. You don’t have to deal with people (customers) that often. The marketing cubes seems bigger! Well there are many marketeers that want to break out and just sell rather than create content. To put these talented teams on the same page needs customer focus. How are marketing and sales going to work together to improve the performance of the customer? Well, all marketing collateral needs to articulate how the prospect could use the product in their business today. Instant gratification. Use videos, case studies, blogs, white papers, whatever it takes to make it clear how a prospect derives value from your product. So many products fail the compelling usage tests. Having great capabilities is not enough. Also because of their deep knowledge of the market the marketing team will produce excellent competitor cheat sheets highlighting why you are unique. The key is to identify the essence of your competitors and why your solution solves a problem that their solution does not. Sales Teams can now craft their engagement strategies with your unique positioning in mind. Scripts should be framed around insightful questions that demonstrate your understanding of your unique market and the issues faced by your prospects. The key for sales professionals is to find the RIGHT problems. Right means they must be a high priority and be able to be solved by you. By adopting this mindset you will generate a happy, symbiotic relationship between marketing and sales where people have huge respect for each other’s skill set. But you need to make it happen.
At The Portfolio Partnership our partners have been involved in the scaling of numerous software businesses. We’ve failed so many times that we know what works. That know-how is transferable to your team.
Our next workshop on Scaling is coming to Salem Oct 1oth – Sign up here.