Tag Archives: Specialize

What are the Best Avenues for Raising Capital? Six Points

Situation: The technology sector is booming with AI and other exciting new technologies. Whether you want to fund a new company or a new effort within a smaller company, what are the best approaches? What are the best avenues for raising capital?

Advice:

  • Funding and credit markets are opening but still tight. The bar has been raised because too many people are chasing too few available dollars.
  • The venture capital (VC) sector has consolidated. The primary focus is on technology, software and medical. Much less goes to the consumer sector. It is important to target angels, VCs or investors who specialize in your technology, market and business model. Research current VC portfolios.
  • Angels now act more like VCs – particularly structured angel groups. Initial investments are typically under $1 million.
  • If you have a technology, investigate the grant world – e.g., NIH or DARPA. These organizations fund research, but not marketing, distribution or sales. Look for specific programs or RFPs that align with your technology. Target your grant request toward prototype development and studies. Search LinkedIn for military people who can introduce you to contacts within programs like DARPA.
  • Investigate SBA Grants, and foundations with an interest in your technology or application. Foundations sometimes will grant funds ($100k) to support the work of individual scientists and researchers. Call on friends and family who believe in you and your work.
  • Whoever you approach, these rules apply: (1) Do your homework. Choose sources that align with your project and profile. (2) Presentations must be crisp and easily understood. Investing in professional assistance is wise. (3) Be able to make your case in 15 minutes or less. The first minutes are most crucial, so have your ‘elevator’ pitch perfected. (4) Your model and financials must support a high multiple exit, 5-10x their investment in a reasonable period of time – about 5 years. (5) Team, Team, Team – credentials, experience, presentation – be a team with whom the investor can work.

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How Do You Quickly Shift Your Marketing Position? Five Points

Situation: A company wants to shift their marketing position quickly and effectively toward a new focus. The new focus is the result of breakthroughs that they have developed that have opened new product and service opportunities. How do you quickly shift your marketing position?

Advice from the CEOs:

  • Hire a strategic marketing consultant to help analyze the market, identify unmet needs and unaddressed segments of the market where the company can establish a strategic advantage.
  • Pick an area where the company is known or can be known as the best. Create differentiation by specializing in this segment.
  • Add both sales and marketing positions to guide the refocus.
    • Marketing is more than just collateral. It is strategic positioning, understanding changing customer needs, and thinking creatively about how to leverage those needs and the company’s capabilities to maximum advantage to support the sales efforts.
    • A good marketing platform provides salespeople the structure within which to operate.
    • How do you find good candidates? Talk to editors and publishers of trade journals. They know marketing contacts and who is good.
  • As the company shifts the model, look for ways to reduce utilization and down-time for engineers and other staff.
    • Maximize the value of this down time.
    • Develop case studies or materials to support the sales effort.
    • Create new concepts or capabilities to add to the offering.
  • Several other CEOs noted that with the quality of the projects that the company has completed for current clients, the company already has both the capabilities and proof of delivery that many sales and marketing people would love to have. Use these as assets and leverage them.

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How Do You Productize an Offer? Four Recommendations

Situation: The CEO of a new company is struggling to generate sales momentum. Part of the issue is adequately productizing their current offer. A second issue is building a good sales team and sales momentum within the team. How do you productize an offer?

Advice from the CEOs:

  • The issue may be that the company is regarding its product and the sales process too narrowly. Look at the sales process in new and different way.
    • Role play the current sales-to-close process. Have salespeople document what they do. Look for a product concept that appears from this exercise.
  • Try different models to determine what works best at the company’s current stage of growth.
    • Position the company’s ability to deliver outcomes. Make it risk free if nothing is produced. “Here’s our package – it costs nothing if we don’t produce results as promised.”
    • Consider specializing in services that enhance other companies’ sales – a need that is always present.
    • Look at the car dealership model – lower level salespeople qualify prospects and bring the qualified prospects to more experienced colleagues for the close.
  • How is the company currently positioned – as a generalist or a specialist? Potential clients more often look for a specialist to help them solve specific needs.
    • Conduct local surveys to help define prospects’ and clients’ top needs.
    • Start developing and advertising specialty areas. Add to the list of specialties as the company expands.
  • To build the sales team look at younger salespeople currently with competitors. If these individuals have been recruited right out of school, they will often look for other opportunities after a year or two.
    • Target good salespeople who are currently employed. Tell them that the company is interested in getting to know their business and look for salespeople who are good at selling themselves as well as their offering.

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How Do You Best Exploit a New Opportunity? Three Observations

Situation: A service company has developed the capacity to produce and sell a product. The CEO is considering two options for this new opportunity: create a separate entity for the new business or run the businesses in parallel under the current umbrella. How do you best exploit a new opportunity?

Advice from the CEOs:

  • Option 1: Create separate entity for the new business while the existing business continues in parallel.
    • How big is the potential win? The current company competes successfully for about 10% of the market. The new capability would allow the company to potentially compete for 100% of a larger market.
    • How different are the two opportunities? The current business requires specialized talent – it is a low volume, high margin business. The new opportunity is the reverse – high potential volume but lower margin. It is a more generic market with fewer specialized needs.
    • The separate entity option provides the most flexibility. The current model already functions well. A spin-off provides an additional option without losing what already exists.
    • Bring in another individual to develop and run the new entity. It’s a different game and requires a different focus. However, it will be a great opportunity for the right person.
    • The spin-off model will be more sustainable under separate management than under the current company.
  • Option 2: Operate both businesses under a single entity.
    • This option looks like a double compromise – it alters both the company’s current strengths and the fundamental business model.
  • A long-term alternative is to look for a financial acquisition for the current company. It produces good net margins, has good cash flow, a and spins off cash. This can be valuable to a financial buyer.

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How Can a Small Company Compete Against Bigs? Four Strategies

Interview with Sai Gundavelli, CEO, Solix Technologies

Situation: A company has top talent and a better technology solution. However their large competitors continue to compete by discrediting them – “nobody was every fired for choosing IBM!” How do you compete effectively against large incumbents?

Advice from Sai Gundavelli:

  • Invest in your product.
    • Work to attain best-of-breed status in your industry with a constant focus on and investment in building a great technology. Solix’s constant goal is to be the technology leader in information lifecycle management and Data Privacy.
    • Be organic and focus on integration, smooth operation and scalability. Build your system from the ground up. An organically designed solution where the pieces work seamlessly offers higher and more efficient performance.
  • Invest in alliances.
    • Solix continually invests in our partnerships, including our OEM relationship with Oracle Financial Services, and we have more such partnerships in the works that will help us expand our presence in the market. Partnerships increase your presence and visibility as you scale your own organization.
  • Focus your efforts.
    • We at Solix are 100% focused on our product, whereas our large competitors are juggling multiple priorities, like a juggler trying to keep a large number of balls in the air. While we are smaller, this allows us to more effectively focus our efforts without lots of conflicting priorities. We focus exclusively on information life cycle management and Data Privacy.
  •  Have others talk about you.
    • Solix’s answer to our competition is let our customers speak for us. We have many happy customers such as Honeywell, Duke Energy, American Tires, who are happy to participate in joint webinars and customer case studies. We work closely with them on the latest developments and direction and use their feedback to guide future product direction.

Key Words: Technology, Solution, SMB, Competition, Multinational, Incumbent, Product, Scalability, Flexibility, Alliance, Partnership, Focus, Specialize, Detail, Reference, Credibility

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