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Abstract – Growth stage technology businesses present distinct challenges for evaluation and optimization
relative to other phases of development. This paper provides a governance and general management operating
perspective of the success criteria and metrics that are the most informative to gauge and the most important to
advance for B2B enterprises in this stage. The goal is to detail performance indicators to monitor and
operational disciplines to improve in order to achieve the highest growth rate, financial return and strategic
impact.
Index Terms - keywords: growth stage technology business evaluation and strengthening, operational monitoring
and reporting, technology entrepreneurship, venture-backed business governance
Between start-up and sustainability is the subject of this paper: Wide Net of Contacts within Prospect Businesses. There is
growth stage B2B enterprises, generally viewed as those with ego-less cultivation of contacts at target customers,
between $2 million and $10 million in annualized sales, or 20 particularly with respect to seniority. Sales staffers want to
to 100 employees, that aspire to much greater scale and identify early and engage with everyone that has knowledge,
success. These are companies that are starting to hone in on insight and influence over the purchase decision, across
the winning product and service delivery package, internal functions. Moreover, they identify and cultivate champions
processes, as well as pricing and channels, without being all and coaches within prospect organizations early in the sales
the way there. process who provide privileged information. Opportunities
are rarely if ever rated above a 50% chance of closing without
Companies develop unevenly, even on the way to ultimate an energized coach or champion within the customer
success. There is head-fake potential for some early signs organization aggressively helping the effort along.
during this phase that can be construed as overly indicative of
likely future success or difficulty because of the small number Executive Support at Customers. There is senior technical
of customers and limited history. and sales support at target customers for revenue-enhancing
technologies from an early stage in the purchasing process.
The criteria presented below are comprehensive measures There is even broader multi-functional support for internal
which are likely to signal success or difficulty for growth process efficiency enhancing technologies, including
stage businesses. While parts of the growth stage evaluation operations and finance. Revenue enhancing technologies tend
Advanced Pipeline Stage Conversion to Wins. A minimum Lost Order Recording and Analysis. Deals from the
of late-stage deals that were reported to be near signing reportable pipeline that got away are recorded, along with a
spontaneously disappear. There is rigor about the process of low distortion view of the reasons why. This data is used as
discovery and education as opportunities develop. This the basis for periodic reviews and lessons-learned sessions to
includes technical and business needs, as well as reading the help guide future improvement in tools, processes and
political grain within customer organizations. Typically, this targeting.
takes collaborative business case development with customers
on financial, technology and operational impact dimensions, to Sales is an Honorable Profession. Other functions of the
develop and close deals. Better growth stage companies business view sales as an honorable vocation. They seek to
achieve 80% and above close rates on late stage deals by help and demonstrate salesmanship themselves when facing
dollar value, in the quarter that they are targeted to close in. outward on behalf of the business. Reciprocally, the sales
High close rates on late pipeline stages means that the most group earns and renews this respect daily. When necessary to
precious resource, time, is being spent on the right deals and go out on a limb to win business, the sales and delivery
developing them the right way. High later-stage conversion organization agree beforehand to go out together.
provides one of the clearest summary looks back at earlier
pipeline stages to indicate that they are being done well.
III. Customers
Forecasting. Regular forecasting occurs. Projections based Time to Value. Customers deploy the technology quickly
on reportable pipeline (opportunities assigned ≥50% relative to competitive benchmarks, and are easily trained to
probability to close within the next twelve months) in past use the product well and derive its intended benefits.
periods substantially match up with actual revenues or
bookings, both in aggregate, and for major individual Satisfied and Promotable. Customers are reference-able,
opportunities. Moreover, there is sufficient forecast most are delighted or nearly so, and several name-recognized
granularity and adherence to allow operational planning in capability leaders are willing to lend their names as users for
provisioning, production and delivery at a product platform promotion. They either love the experience with the product
level, usually with quarterly period revenue outcomes +/- 10% or service, or they get a new-to-the-world capability that is not
of projections entering the period. available elsewhere. Individuals within customer
organizations see their use of the product as socially or
Reportable Pipeline. The total value (not probability- professionally advancing, or transformational for the benefits
weighted expected value) of the reportable pipeline is at least that it delivers.
five times the value of projected revenue over the coming
twelve months. This multiplier typically provides enough Return-on-Investment (ROI). Customers achieve a known
volume for sufficient revenue to materialize in support of and significant ROI. The ROI model and results are shared
forecasted levels despite some over-optimism which is sufficiently with the vendor to further product marketing
common. Upbeat probability assessment is typical with sales collaterals and impact knowledge. ROI feedback is used to
associate self-reporting, the tendencies of customers to tell drive increasingly targeted consultation and business case
sales staff what they think the salesperson wants to hear, as collaboration with prospects in future sales.
well as commonplace push-outs in time of some deals as they
move toward closing. Profitability Profiling. It is known which customers are
profitably being served and which aren’t. For customers that
Large Account Plans and Plan Execution. Large account that aren’t, there is a clear understanding of how they will
plans are a reflexive expectation of staff and management. move to profitability or be set aside over a defined and
Few organizations develop high performing sales teams reasonable time.
without developing good large account plans, or plans for how
to turn footholds in large accounts into much larger revenue Product-Service Clarity. There is an understood allocation
streams. Large account plans are one of the most revealing of revenue and profit between product and associated service.
non-financial measures of sales performance for the way they As it is much harder to scale and build lasting value in
reflect method about being forward looking rather than services, this distinction is usually made with a view to
primarily reactive, and making the most of proximate keeping the growth rate and growth potential of the business
opportunities. Whereas pre-transaction prospect interest is as high as possible.
sometimes difficult to gauge for the way that it reflects upon
High Performance Product. The vendor is able to defend a VI. Marketing – Inbound
doubling of value relative to incumbent offerings, target a Data-Rich Environmental Understanding. The competitive
50% increase in price, and accept no less than 30% more. landscape and benchmark companies’ strategies and financial
models are well understood, in as data-rich and fact-based a
Low Cost Product. Sustainable cost savings are delivered of manner as possible (rather than largely anecdotal).
at least 25% for a product that is otherwise functionally Environmental monitoring is done with a view to outflanking
equivalent to the status quo. the competition and levering the collective investments and
intellectual energy of those that have approached the same
Business Productivity. Business productivity improvement market before. Anecdotes are subject to selection bias, and in
for the customer is realized that delivers a 40% ROI, isolation can be used to argue for almost anything. A broad,
alternatively payback of four times the hard costs over the ongoing data-driven external frame of reference is powerful as
likely useful life span of the purchased asset. a tool to identify how to invent or redefine marketplace
expectations where it matters most, sidestepping or deflecting
Industrial Productivity. An enduring 30%+ increase in head-on competitive battles, and selectively settling for being
speed, accuracy, repeatability, reliability or flexibility is efficient enough and good enough where differentiation is not
achieved in the customer’s system, or, alternatively a 10%+ so valuable
reduction in scrapped output.
Customer Requirements – Five Whys. Those who gather
Business Process Solutions. Where the vendor assumes an and distil customer requirements relentlessly ask “why” until
entire business process on behalf of a customer with the answer stops changing. They understand how the offering
significant differentiating IP, it is able to charge twice what can add the most value to the system level challenge through a
the hard costs of operating the process are expected to be. component or solution; the totality of the use case customers
Alternatively, the value of the offering supports a realized need to fulfill is at an advanced state. Inbound bandwidth is
price of double the cost of the bundle of required components further combined with implementation and delivery
and integration effort. Lesser pricing risers over hard costs pragmatism to arrive at practical goals for product and service
typically signal that the solutions are viewed more as services, development.
than as IP rich offerings that deliver significant, durable gains
for the customer or appreciably faster time-to-value than
alternatives. VII. Product Management
Short- versus Long-Term. There is balanced weighting of
deal-of-the-day new inclusions, with longer-term feature
V. Pricing Structure and Processes consideration processes. Both are necessary to create a
Consistency. Similar pricing and discount structures are compelling, competitively powerful product platform and
provided to similar customers and channel partners. There are vector of advancement that can be maintained, while still
no special deals just for asking. Customers and channel doing what is necessary to meet near-term revenue and growth
partners become trained over time to not expect special deals targets.
as a reward for renegotiating or otherwise maneuvering apart
from driving up volume and profits. Consistent pricing Complementary Product and Capability Strategy. There is
discipline saves everyone time to focus on higher value an explicit strategy to either make complementary products
IX. Analysts and Influencers Deployable. It requires a known, limited amount of service to
Aware, Enthusiastic and Promoting. Analysts are deliver, commission and sustain in most cases. Configuration
dedicating significant coverage to the company and its is done efficiently by a peripheral technical team, rather than
products. The endorsement of outside analysts is a significant the core development group having to do most of the heavy
predictor of future success, especially for technologies where lifting.
the customer’s purchase decision is political and multi-
functional, and more so when the technology addresses Scalable. There’s sufficient knowledge and effort during
internal efficiencies more than major revenue expansion for development and test to have reasonable confidence that the
the purchasing business. product can be stably reproduced over the next order of
magnitude increase in demand volume and usage variety.
Fast Cycles. There are no big bang development projects High Orbit Brands and Trademarks. Brand-building
where R&D staff work for months before doing integration marketing efforts focus on the company name or core
and system testing of something resembling a shippable technology platform instead of individual products. It is
product. Development and testing infrastructure is created so expensive and requires substantial repetition to build brand
that new work can be tested individually every two days, and awareness and equity. It is typically best in the growth stage if
system integration testing takes place at least monthly. New the company name or the branding of its core technology
products get out to market at a frequency of every four to six platform are the focus of brand-building awareness
months. This way, feedback comes when ideas and campaigns, rather than subordinate product lines or individual
XX. Management
XIX. Board of Directors Coordinated Approach. Senior management has a similar
Been There, Done That. Board directors collectively have view, though not cult-identical, of the most pressing issues
direct and successful experience with analogous technical, facing the business. Wide differences in outlook are worked
operational, sales, finance and growth trajectory business out among senior management privately, vigorously at times,
challenges. to come out to present a unified front to more junior staff,
partners and customers. Rank and file have a voice, but
Supportive, But Willing to Challenge. The board is leaders make decisions and abide by them.
supportive of management, seeking to offer help, providing a
XXII. Culture
XXI. Employees Drive and Belief. Employees and management have a strong
They’re Smart, and Get Things Done. What more is there? belief in the future of the business and for its products and
services to be transformational for customers. But, there is
Strength Attracts Strength. Strong candidates, those with also an underlying paranoia that success has to be earned, and
outstanding reputations for excellence earned elsewhere, are that complacency can be the seeds of the undoing of the
seeking the company out as a place of prospective business at any time.
employment, particularly past colleagues of current staff. The
gold standard is to attract the best 5% or so of top performers’ Substance. There is a depth to employees’ technical and
former colleagues. These should be the strongest colleagues application enthusiasm for the product, grounded in driving
that the most effective staff have worked with in the past and real, sustainable value for end customers. This is different
have ties with, seeking to challenge and prove themselves, not from superficial enthusiasm and a glossy pitch that can’t hold
merely the top 20%. up well to direct drill-down questioning and informed
skepticism. Staff and management can advocate for the
Low Voluntary Turnover and High Effort. People are business’ technology and market position without summarily
excited about the work, and stay with the company. They resorting to the sliver of infinity argument to fend off doubt
work extra hours not principally because there is social or (“It’s going to be huge”) or circular, self-fulfilling arguments
explicit pressure to do so, but because they are pumped up for future success to deflect critical analysis. There is
about what they’re doing and the difference they’re making intellectual honesty, to see situations objectively and act
internally and externally. accordingly. Businesses with this capability of testing ideas
and actions make better day by day decisions, to accumulate a
Methodical On-Boarding. New hires are provided with clear superior capacity across functions and market presence over
performance targets, learning objectives, challenging but