Continued Fierce Competition in the Software Tech Space
In this sector, fortunes can be made or lost in a very short timeframe. Consequently, competition continues to be fierce. We live in a hyper-connected age, where customers have world-wide access to information on mobile devices without even leaving their bed. In this "always on", connected world, there is massive competition - and fewer winners. Because of this, it is essential you differentiate yourself and create your own unique, competitive space. Copying the market leader in your sector will mean you consign your company to being just a cheap reproduction - a "me too".
Zero to Hero
To create the right conditions for fast growth in your tech company you need more than just a good idea and creating some technology. The last twenty years have proved that software sales can create enormously successful companies that can grow quickly and, within a decade or less, be sold for $B’s. However, this is no longer a fledgling industry and companies cannot rely on simply having a smart idea and building some whizzy technology.
There has been and continues to be an abundance of investment companies that are willing to invest money in start-up and small/medium sized companies in the hope that one of their investments hits the big time.
As we move towards 2020, investment is still available but the competition is progressively fierce and companies are battling for position in a more crowded landscape. To create a fast-growth company, you have to be smarter and perform better across a broad spectrum of areas.
Emulating the Approach of Elite Athletes
Under the meticulous guidance of Dave Brailsford, the British Cycling Federation's Performance Director, Great Britain has become the dominant nation in elite cycling.
Dave achieved this by focusing on all areas of his athletes' training. He combined this with an obsessive attention to detail in competition.
He examined and improved every single aspect of the athletes’ preparation - from how much they slept, to their diet and the clothing they wore. He even went as far as giving them precise instructions as to how they should wash their hands after using the bathroom, in order to minimise the likelihood of infection and illness
Tough Competitive Market Place
Parallels can be drawn between the sporting arena and the software tech environment.
In the past, some purely technical software companies managed to succeed (to varying degrees) but have still had a soft underbelly within their businesses.
The perception of technology as the perfect antidote to inefficiency, combined with the investment community’s willingness to throw money at a relatively small pool of available fast tech companies, created a false economy.
However, as end users have become increasingly "tech-savvy" and the competition ever more fierce and abundant, those days are long gone.
Businesses Reflect the Personality of their Leaders
Companies reflect the personalities and skills of their leadership team.
If the company's leaders cannot see the weaknesses because of their own lack of knowledge and expertise, then those flaws & vulnerabilities will proliferate within the organisation, negatively affecting its overall performance.
At Boss Equity, we regularly see CEO's who have successfully facilitated growth via multiple acquisitions throughout their careers. And yet, they sacrifice performance and value in their business because they are poor marketers and have failed to create an environment in which their sales people can thrive.
Winning the Race
Think of your company as a racing car on a long, cross country rally. The finish line would be your exit plan.
Your strategic business plan would be your race plan.
Your marketing would be your navigation system.
The car dashboard would be the output from your finance department.
The fuel in your tank would be the cash.
Sales would be your accelerator.
I was going to say that your Finance Director is your hand brake - but maybe that is unfair ☺
If you remove any one of those components or hamper their performance, then you are very unlikely to win the race.
An abundance of skills is required if you want to win at the game of business. Most important is the ability to be able to identify when you are lacking expertise in a particular area and how to eliminate that limitation.
Obviously, for smaller and medium sized companies, it is often not sustainable to have certain skills permanently in-house. However, this doesn’t negate their importance and it is imperative you access those skills, even if that means you buy them in temporarily.
About Mark Edwards
Since the mid 80's, Mark has established a number of businesses, including a sports training and rehabilitation company and a document management company that used RFID's to bridge the gap between the paper document management and electronic document management worlds. Since the 1990's, he has specialised in the software tech sector, having been head hunted for the UK General Manager role at a German document software vendor, where he ultimately facilitated an MBO. In 1999, Mark founded Document Boss which rebranded to become Boss Equity in 2016. Mark has personally been instrumental in over 100 acquisitions.