Hey!! D’you wanna make a fortune? D’you wanna know how to do it?
In this sector, fortunes can be made - or lost - in a very short time. Consequently, competition continues to be fierce. We live in a hyper-connected age, where buyers can search the globe on a mobile tablet without getting out of bed. In this socially connected world there is massive competition and fewer winners. Copying the market leader in your sector will always consign you to being just a cheap imitation. It is essential you differentiate yourself and create your own unique, competitive space.
Zero to Hero
To create the right conditions for a fast growth tech company requires more than having 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 throw money at start-up and small/medium sized companies in the hope that one of their investments hits the big time. Investment is still available but the competition is increasingly fierce and jostles for position in a more crowded landscape. To create a fast growth company, you have to be smarter and perform better in a broad spectrum of areas.
Sporting Analogy
Parallels with this environment can be drawn by examining the sporting arena: under the guidance of their performance director, Dave Brailsford, the British Cycling Federation has made Great Britain the dominant nation in elite cycling. Dave achieved this by focusing on all areas of their training, combined with an obsessive attention to detail in competition. This has included examining and improving every aspect of the athletes’ preparation - from how much they sleep, to their diet, clothing and even down to 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
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. Nowadays, as end users have become increasingly canny and the competition fierce and abundant, those halcyon days are now long gone.
Businesses Are Reflections of their Leaders
Companies reflect the personalities and skills of their leadership team. If those leaders cannot see the weaknesses because of their own lack of knowledge and expertise, then those flaws will perpetuate within the organisation, bringing down the overall performance of the company. I regularly see CEO's who have successfully made multiple acquisitions throughout their careers, to achieve growth, yet who 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.
Cross Country Rally
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 elements or hamper their performance, then you are very unlikely to win the race.
Required - Whether You Accept It or Not
A plethora of skills is required if you want to win at the game of business. Of paramount importance is the ability to see 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.
