iGotPro - Leading the Way in Maximizing the Reach of Business Professionals info@igotpro.com
Thursday was a very refreshing day for me. I spent several hours two entrepreneurs who building a great business. It is the way they are going about building the business that is so refreshing to me. It is well focused, pragmatic and calculated strategic campaign to ultimately own major part of a target market. I am speaking of Shaun Ricci and Somen Mondal the co-Founders of N4 Systems and there safety and compliance service called Field ID. More about there success and future plans in a moment.
The reason this is refreshing is because I have been over exposed to Steve Blank’s preachings (Not all Those Who Wander are Lost, The Four Steps to the Epiphany, The Startup Owner’s Manual and his very popular Blob at SteveBlank.com) and struggling to understand how most startups will achieve success by following this roadmap. It is a very complicated set of management disciplines, product attributes and distribution mechanics that need to fall into place to create the growth effect espoused. It works, don’t get me wrong. It just won’t for everyone all the time. Granted I have limited experience with consumer web business growth and monetization models, certainly a lot less than I do with enterprise software and cloud computing. This said to me, the techniques and teachings of Steve Blank and his disciples like Eric Ries (The Lean Startup), can be applied in such way as to leave too much up to chance in terms of desired business outcomes. I am a little old school that way. Measuring incremental improvements without direct correlation to a “next step” toward a desired market outcome seems problematic to me for all but a few exceptional cases.
Back to N4 Systems and the smart guys building that Delloitte Fast 50 recognized business. These entrepreneurs appear to be on a 12 year path to a Billion dollar business. Four years ago they saw market that was underserved by technology. The safety audit and inspection of cables used in construction, think cranes. They engineered a mobile application that is tied to a back-end in the cloud that enables inspectors, auditors and safety supervisors to achieve greater efficiency, effectiveness and reduce cost of compliance. They understood that mobile first and cloud enablement were keys to being able to deliver this promise and disrupt the then current paper-based and re-recording methods.
They raised a bit of angel money, build out the mobile platform, injected themselves into the market and started winning customers. These guys have a handle on on all the important business metrics. They know what it takes to find and acquire a customer lead conversions, selling methods, cost to acquire, potential deal sizes all of it. The business is modelled effectively using history inform the future. As time marches on they have moved into adjacent use cases. Safety harnesses, Lock Up/Lock Out, Building Site Safety and so on. These expansions into adjacent markets were deliberate and the business outcomes predictable. This has produced four year old business that is meeting major milestones in terms of CMRR (Contracted Monthly Recurring Revenue) and Year over Year growth of upwards of 80%.
With laser focus on a specific market, they get to know it extremely well. The major players in the market ecosystem inclusive of competitors get to know them. As market knowledge broadens and relationships deepen, their ability to understand what is required, how to be positioned and how to win increases. This knowledge is translated into better product, better marketing and continued growth. Perhaps more importantly, this knowledge can be used in what they are planning now. This is where I go from being impressed with their success to date to being in awe of the position they have created for themselves and the opportunity in front of them.
After disrupting the process with an effective product and earning a coveted position as innovator in the market they are now planning a disruption in the entire eco-system that makes up that market. The beauty is that this it is a short put for them technically and marketing wise and it opens a 4X increase in total market opportunity. I won’t give away the farm on them and describe the innovation or what is being disrupted. I will say that I really like their chances. It is a well researched business model, it has been applied very successfully in other markets and these guys have a solid track record of execution.
Back to why this is refreshing. There are elements of Steve Blank’s Four Steps to The Epiphany and Eric Ries’ Lean Startup in their story to be certain. Whether this was purposeful or not is irrelevant. The frustration I have felt working with other startups is that there appears to be too much focus on the product to be developed and not enough on the tougher things like defining a market to win and plotting a course to do it. I hear things like putting the technology “out in the wild” and “learn” from the uses. This will inform the development required in the next wave. They go on to suggest “we will learn” from our early adopters and markets will form. When I hear this, I feel that business success is being totally left to chance.
For me, there are critical stages in the execution of developing your business. The entrepreneur must define a market they intend to own. This is a fun part. You get to choose how to define the market. It could be an existing market you will disrupt, it could be a niche and it can be market that you see becoming apparent at some point in the future. The critical thing here at the beginning, define one market and build your execution plans around that market. By all means, use the best business wisdom available as you develop your plans, inclusive of Steve Blank and Eric Ries. I would even throw in David G. Thompson’s Blueprint to a Billion to help with strategy on how to leverage established players who may be in the ecosystem that serves your defined market.
With more than one market definition (unable to focus) or a poorly/vaguely defined market you may be susceptible to being perceived as leaving too much to chance in your business planning. There is also a near certainty that it will take you much longer to get to revenue and predictable growth than it is taking the guys at N4.