Tag Archives: Market

How Do You Target and Prospect Acquisition Candidates? Three Guidelines

Situation: A company wants to grow by acquiring companies in similar verticals that have different but complimentary offerings. The targets will most likely be boutique operations. How should they target and prospect candidates?

Advice from the CEOs:

  • Before you think about either targeting or prospecting an acquisition do your internal homework. Establish your strategic plan, including strategic capabilities that you want to develop. Look for synergies within your plan, and assure that any new capabilities complement these synergies.
    • Will current customers be interested in the new strategic capabilities, or will you have to build or buy access to new customer segments?
    • Determine the leveraging factors. How much incremental business can you expect to gain compared to current business? Look at both top and bottom line impact.
    • Do a build/buy analysis to determine whether the capability is more effectively built using your own resources or purchased.
  • Leverage both internal and external resources to develop a target list. Ask what current employees may be knowledgeable of potential candidates.
    • Use your industry network to identify and gather information about candidates.
    • Retain a firm to assist you in identifying candidates. They can approach candidates from a neutral position to assess interest in acquisition.
  • It is critical to negotiate a deal that retains key talent. Founders and key staff of the acquired company must see the combination as a means to facilitate and expand their own vision. In many successful acquisitions you will see the following traits.
    • The acquiring company did not change management, accounting methods, or operational procedures of the acquired company.
    • They acted as a bank to facilitate pursuit of the acquired company’s dreams and already successful strategies.
    • They took a “hands-off” approach with the acquired company and did not try to force cultural change.

Key Words: Acquisition, Candidate, Plan, Capability, Market, Customers, Leverage, Build-Buy Analysis, Target List, Talent, Retain, Culture, Compatible, Due Diligence

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How Do You Cost-Effectively Assess Product Viability? Four Foci

Interview with Henry Chen, PhD, Founder & CEO, Cynovo

Situation: A company in a maturing market needs to gain customer feedback to guide product development. They want to optimize Alpha testing prior to investing in tooling. How do you assess product viability on a limited budget?

Advice from Henry Chen:

  • As the market for tablet devices matures, it is increasingly important to test mass market response to new product design prior to freezing product specs and investing in tooling. Our approach to vertically designed enterprise solutions focuses on four areas: going to the experts for guidance; monitoring the competition and market direction, investing heavily in prototypes, and leveraging speed to market.
  • Go to the experts; leverage their knowledge and understanding of the market to speed your own development efforts.
    • Get to know the market gurus who stay on top of the market and are knowledgeable about market direction. These are the influencers who blog, write and publicize new market innovations.
    • As a smaller company, the route to market in often through alliances.  Senior staff at large companies are a valuable resource. One option is to work through large companies’ sales teams to identify senior product people and connect with them.
  • A good place to monitor market developments is at major trade shows. Events like the Consumer Electronics Show allow you to interact with a large number of experts and to monitor both what the large companies are introducing and their product direction.
    • Trade shows are unique situations because many experts attend. Some are speakers, and others simply attend to keep up to date with latest developments.
    • Use trade shows as an opportunity to gather a panel of experts to give you feedback on your design concepts. Experts like to be on top of the market and new developments and appreciate the opportunity to provide input on new products.
  • Leverage the opinion of younger leaders and experts. In the US and in China, the average entrepreneurial founder is young – often in their low 20s. They are not as cautious as older people who worry about failure. Successful young entrepreneurs are also potential investors.
    • Give experts time to think about your product. It may take a few hours or even days for them to “get” your new concept.
  • Invest in prototypes which have a similar look and feel as actual products, though they may lack full functionality. People like to hold a product, gauge the weight, look and feel of the controls, and to contrast different model options.
  • Large companies are often hindered by internal confidentiality rules. Smaller, more nimble companies may rely on speed to market to allay confidentiality concerns. This gives them the ability to gather more feedback prior to finalizing product design.

You can contact Henry Chen at [email protected]

Key Words: Customer, Feedback, Market, Maturing, R&D, Tablet, Budget, Experts, Trade Show, Panel, Young, Leaders, Investor, Prototype, Confidentiality, Speed

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How Do You Evaluate Strategic Options? Three Suggestions

Situation: A company has developed and shipped equipment that puts it into a new market. They can continue to pursue this direction or make a significant shift that will open up a larger opportunity. What are the most important considerations to this decision?

Advice from the CEOs:

  • There are a number of points that you need to clarify before making this decision:
    • What is the magnitude of difference between the two opportunities?
    • How much of a shift in technology is required to make the jump to the larger segment?
    • How much of the expertise to make this shift do you have in-house, and how much must you bring in, acquire or develop through partnerships?
    • What is your most likely exit strategy and how will each opportunity impact it?
  • Are you being realistic in your ability to meet development timelines?
    • If you don’t have deep expertise in the area that you want to develop, the answer is most likely yes. If you do you can often beat your initial estimates.
    • If the shift includes both there is risk that you will underestimate the time required to develop both the prototype and to turn the prototype into production quality technology.
  • If your ultimate objective is to sell the company, be aware that selling any company can be tricky, and you may not be able to sell the company for the value that you need to support yourself after the sale.
    • Study other companies in your geography and market, and determine both the price that they received for their companies and how they positioned their companies for sale.
    • As an alternative to selling, consider hiring a general manager to run the company. This can free you to concentrate on your passion and also increase the value of the company if you decide to sell at a future date.

Key Words: Strategy, Technology, Equipment, Market, Decision, Opportunity, Expertise, Timeline, Exit, Value, Sale, Positioning, Manager

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How Do You Chase A Moving Ball? Three Fundamentals

Interview with Michelle Bonat, CEO and Founder, RumbaFish Technologies

Situation: Early stage companies focusing on social commerce and analytics face an unpredictable market. Nobody can accurately forecast market direction or even who the players will be in 2 to 3 years. What are best practices for chasing a moving ball?

Advice from Michelle Bonat:

  • In a rapidly evolving market it is critical to have laser-like focus on the needs of your customers. You must create value for them by understanding their needs, businesses and challenges. While technologies and markets change and evolve, human behavior is remarkably consistent over time. By focusing on rewards, sharing and customer motivations we better understand their needs. We see three fundamentals in working with customers.
  • First, focus on understanding needs versus wants. If Henry Ford had asked what customers wanted for better transportation they would have said “a faster horse.” They needed a faster way to get from Point A to Point B without getting rained on. We invent solutions that are incrementally better at addressing fundamental customer needs by leveraging technology and social commerce.
  • Second, work collaboratively with your customer. As we develop an understanding of needs versus wants, we develop an arm in arm relationship with customers and partner to evaluate solutions that work for them. We use short versus long release cycles with frequent checkpoints to assure that both sides are on the same page and that we understand the features that are most important to the customer. As a result, our customers become evangelists not only for the resulting product or service, but for us!
  • Third, go into any project with the customer’s success foremost in your mind. We focus not only on getting the solution right, but on assuring that the solution optimizes the customer’s primary objectives. That way we all share in the win.
  • The bottom line is that customers want to be treated as individuals and want their individual needs met. We honor this and make it central to our customer interactions. This way, no matter where the market goes, we will be a player.

You can contact Michelle Bonat at [email protected]

Key Words: Strategy, Leadership, Social, Media, Commerce, Analytics, Predictability, Unpredictability, Market, Direction, Player, Customer, Value, Needs, Wants, Behavior, Engage, Share, Understand, Technology, Social Commerce, Collaborative, Relationship, Success, Solution, Individual

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How Do You Negotiate a Tricky Merger? Five Thoughts

Situation: A company is considering a merger. The other firm competes with customers who account for 25% of the company’s current revenue. How do you maximize the value of this merger to the company while mitigating the negative impact on current business?

Advice from the CEOs:

  • The maximum risk from the combination is loss of 25% of current revenue. The merger makes sense if you believe you will gain upside which more than counters this risk.
  • Both companies have brand equity. Maintain both brands and to continue to promote them. Maintaining both brands will buy you time to replace business which is potentially at risk.
  • Talk to customers and get their perceptions of the pros and cons of the potential combination. Ask about any concerns that they may have. Understanding the pros, cons and concerns will help you to mitigate negative fall-out.
  • Legally, in a 50/50 split, the Chairman will call the shots. You will have little recourse to counter the Chairman if he decides to fire you. This individual has built his company through previous mergers. Visit and break bread with those who were principals of these companies at the time they were merged or acquired. This will tell you a great deal about the individual with whom you entrusting your future. You will also learn what the others did during their mergers to help plan your own moves.
  • Give yourself a back door or Golden Parachute after six months if the merger does not go as you anticipate.

Key Words: Merger, Competition, Value, Mitigate, Upside, Risk, Market, Access, Brand, Equity, Customers, Pros, Cons, Concerns, Control, History, Golden Parachute

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How Do You Manage Opportunities in This Economy? Five Ways

Interview with Keith Merron, CEO, Avista Consulting Group

Situation: Ongoing uncertainty makes it difficult to clarify strategies going forward. What are the bases for these uncertainties and how do you manage opportunities in this economy?

Advice:

  • The world is moving so rapidly that they key to success is differentiation. There is so much information about how to do this that companies start to look similar very quickly. The ability to stand out as different is critical. Ask yourself:
    • What is my target market?
    • What are the needs that my offer will satisfy?
    • What is my unique approach that is distinct from other solutions which meet these needs?
    • Once you identify the answers, you need to back these up.
  • One has the opportunity to write the future. If you can get one step ahead of the curve this is a huge advantage.
    • Products that died were often two steps ahead.
    • Successful visionaries see patterns that are emerging, sense what is next, and speak to that.
  • Because information is at your fingertips through the Internet anyone can set up a business. The Challenges are viability and sustainability. If these are present the opportunities are huge.
    • The web is a place where you can share information. How to monetize this is unclear.
    • Once you have a following you can offer things for sale that are valued by your following. When this happens, the potential for fast growth is more available than ever. So is the flip side. If a restaurant gets trashed on Yelp this can kill it!
  • In a recession, M&A activity is faster. This enables one to establish a presence much more easily.
    • There are many virtual companies. You no longer have to be in the same place to work together! There are also many ways to partner or co-brand via the Internet.
    • What’s hard is to create tensile strength in the relationship. Because it is so quick and easy to cobble together relationships, the biggest challenges are creating loyalty and commitment.
    • The needs are communications, motivation, commitment and follow-through – just like in a traditional company but in a virtual space. This creates a true bond.

You can contact Keith Merron at [email protected]

Key Words: Uncertainty, Opportunity, Differentiation, Target, Market, Needs, Approach, Timing, Patterns, Visionary, Internet, Following, Community, M&A

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How Do You Attract the Talent to Build an International Presence? Seven Guidelines

Interview with E.J. Dieterle, President & CEO, YES Partners, Inc.

Situation: As corporate wallets start loosening up, companies are looking at market expansion opportunities. International expansion is one alternative. In the past this was done largely by sending Expats. In more recent years there has been a trend toward hiring locally. How do you find the right talent locally?

Advice:

  • Everything starts with the basics – a good job description.
  • Finding people is easier these days with social networks like MySpace, Facebook, LinkedIn, Xing, hi5, Spoke and Plaxo. However, finding the right people remains a challenge.
  • Invest time and effort to research your target market.
    • Which country is a market or has the most likely prospective clients?
    • What is your competitive advantage there?
  • For a hiring company without an existing presence in the local market it is also a challenge to convince good local candidates that yours is the right company to join. It is important to understand the local business culture and values, and also to offer career-paths to qualified candidates.
  • Don’t assume the need for multiple offices as you start. You can start with a highly mobile person working from home who knows the local language(s), customs, and who already has contacts in your target market.
  • It is often assumed that it takes one year or more for an Expat to be efficient locally, and that hiring locally often accelerates first years’ startup-time. However, the local person has to understand and “fit” into the corporate/head office culture.
  • Working with an international executive search firm to find qualified local talent with the right fit to your business and needs can greatly improve your odds of success.

You can contact E.J. Dieterle at [email protected]

Key Words: International, Market, Expansion, Ex-Pat, Job Description, LinkedIn, Research, Competition, Brand  [like]