On June 11, 2012 the Financial Post published an article, The business pivot: Changing direction overnight. What caught our eyes in the article was Brad Cherniak’s description of “AddInSocial [the subject of Brad’s article] [which] had a complex enterprise offering with a long sales cycle and limited internal resources. It also had few prospects to raise third-party capital given the stage of the business and lack of standard VC milestones in terms of sales revenue, number of customers and usage volume metrics.” With this sentence Brad had summed up, for us, a new (and we think increasingly popular) trend that is sure to win converts from the ranks of tech innovators who have been competing too long for a piece of the enterprise software market. The trend is to change direction, in mid stream, and head for the consumer IT hills.
Why the rush to the exit? None other than 2012 realities of complex sales of enterprise software, which include:
- very long sales cycles
- a genuine need for professional sales teams that understand how to successfully close business with prospects that are complex and committed not to waste more money on IT solutions that fail to deliver quantifiable cost savings (meaning value)
- little promise of incremental revenue while sales are in process
For the majority of early stage businesses, these three market characteristics spell gloom and doom. In fact, AddInSocial, the subject of the article turned a 180 and headed off to consumer IT solution “nirvana” with Gijit, a quickly cobbled together solution “for busy professionals to better manage their schedules, organize and prepare for meetings and get through their day more efficiently and effectively.”
Please flip this example over to find the silver lining. This rush to consumer IT spells very good news for those tech innovators who are well financed for the long haul and equipped with the required professional expertise in the sales and marketing areas to work with enterprise prospects committed to change until the prospect’s objectives are achieved. A new and formidable barrier to entry has now appeared, which can be summed up as a general unwillingness to pursue enterprise IT solutions as the result of current market conditions that do not look to change any time soon. With this barrier in place the business plans of businesses completely committed to the enterprise market will become that much more compelling to potential investors, not to mention to the market itself.
If you see the opportunity that is at hand if you opt to keep your business focused on enterprise markets, but need help formulating a winning sales and/or marketing strategy, please do not hesitate to contact us. Please telephone Ira Michael “Mike” Blonder at +1 631-673-2929 to further a discussion. You may also email Mike at firstname.lastname@example.org.
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