Tag Archives: Established

How Do You Move from Early Adopter to Mainstream? Seven Thoughts

Situation: A company has established market leadership in an emerging market. When you innovate in a niche, focusing on early adopters, you eventually run out of early adopters. The challenge is broadening the appeal to a larger mainstream customer base. How do you move from early adopter to mainstream?

Advice:

  • The challenge is both messaging and cultural. In messaging, you must support the new norm. This means convincing the customer that if they are not with you, they’re being left behind. You need to demonstrate that your established, proven solution is the new norm.
  • The cultural challenge is maintaining a culture of innovation and attracting the right talent while becoming a mainstream company. An attraction to new talent is that you are cutting edge – changing the world. This aura is critical to a start-up. You must maintain this innovative culture as you become the market leader.
  • How do you overcome these challenges? Finding people who’ve been there and done that increases the odds in your favor. We hired a marketer who had helped take another company through the same transition.
  • Hire for excitement, energy and enthusiasm. Quickly remove new hires that turn out not to fit. Maintain a freedom to fail atmosphere. You need people who will take risks, but who will also step back and quickly change direction when the risk isn’t productive. Decision-making speed is a great advantage of small companies.
  • Create an organization that celebrates innovation. Institute “Hack Days” when employees are free to work on projects of their choice. A new product that brings business audience targeting to social media came from a Hack Day project.
  • Keep everyone informed. Conduct company-wide daily stand-ups. Individual updates are quick – 30-45 seconds. This fosters open communication and awareness, and surfaces issues before they become problems.
  • Weekly, send out full disclosure emails including key financial metrics, successes and failures. Monthly conduct executive-only stand-ups. These are longer, but updates are quick and focus on progress to goals, as well as next month’s goals.

Thanks to Russell Glass, of Bizo, Inc. for his contribution to this article.

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What is Your 10-Year Growth Plan? Four Points

Situation: A CEO is building a 10-year growth plan for her well-established company. Options include building the company on its current track, growing through purchase of another company, or merging with another company. What are the most important considerations for each option? What is your 10-year growth plan?

Advice from the CEOs:

  • Considerations to start the process:
    • When acquiring another company or merging, the value is the reputation, relationships, and good will of the other firm. This may be more expensive but can provide a head start in the new market.
    • Perform an ROI analysis of build vs. buy. Estimate what it will cost to build. Compare this to what others are asking for their firms. In both cases generate a 5-year cash flow forecast. Discount future cash flows using the company’s desired rate of return – for example the company’s PBDI&T target – as the discount rate.
    • Also compare the relative risk of each option.
  • Build Option:
    • It’s not necessary to recreate the full home office operation.
    • Start small – sales, support, or maybe just an address.
    • Do the actual work at the home office until sufficient business is generated at the new site to support a larger local operation.
  • Buy Option:
    • Look for a company with a good local reputation, who shares the acquiring company’s values, but who wants to sell.
    • This option provides staff, relationships, and a reputation in place. They will already know the local code.
    • Structure a deal for long-term value to the owner. The ideal is to pay as much as possible with future rather than current dollars, with a premium for high retention of personnel and business
  • Spend some time in a new area and get to know it before deciding. If the company already does some business in the new locale, this simplifies the decision.
    • Some locales have been found by others to require a local head of the office who is from the area – who “talks the local talk and walks the local walk.” This will be the case whether the decision is to build or to buy.

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