Enterprise B2B School of Hard Knocks
So I’m a newbie to Silicon Valley. I come from a place about as far removed from innovation as you can get: Cardiff, Wales. I also work in an area of IT most start-ups fear to tread - enterprise B2B. Or maybe more accurately, most people fall asleep at the idea. In addition, I built my company in the old fashioned way: I paid for it with customers, not investors. So to quote Blackadder (BBC, Rowen Atkinson):
"I have a degree from the University of Life, a diploma from the School of Hard Knocks, and three gold stars from the Kindergarten of getting the shit kicked out of me.”
But this is not a sad story of a back-water company.
After 6 years of hard work, hard play, fun experiences, and building an incredible team, it ended nicely with an exit to salesforce.com. It was an incredible journey, and one I wouldn’t have missed. We didn’t build Heroku, Radian6 or BuddyMedia. We built something smaller, Informavores.
So, I wanted to tell a bit of my story, because I think it’s very different from the “famous” stories we all know in Silicon Valley.
When I founded the company, we had a simple idea: allow users to draw flow diagrams, and convert those flow diagrams into fully functioning software applications. No code, no complications, just draw the flow, and we turn it into an application to make your business work better. We wanted to revolutionize how business software is made.
Though the idea was simple, the vision was big, the market was impossible. I spend over a year building an MVP and spent another year trying to build/sell the idea with little success. Every customer was different, we had no clearly identifiable growth engine. I’d speak to mentors and advisors and the feedback was all over the place. We just couldn’t find our place in the world and I was slowly going bankrupt.
Then something changed - and it came in the form of a conversation. I sat down one day with a consultant from PwC (of all places) and he asked me a simple question: “Are you driving home?”
The conversation that came next was tough:
Him: “If you are, don’t.”
Him: “Because I want to tell you something.”
Him: “Why are you lying to people?”
Me: “Sorry, what?!”
Him: “Why are you lying to people?”
Me: “What do you mean?”
Him: “You tell people you’re building a business, but you’re not.”
Me: “I’m not lying. I am trying to build a business.”
Him: “You’re trying? That’s a pile of shit answer.”
Me: “I am building a business, but I’m learning.”
Him: “No you’re not, you’re failing.”
Me: “It’s not failing, I’m learning.”
That’s how it started. And after 2 hours of back and forth I can tell you how it ended. We exchanged many many bad words, I nearly lept over the table and punched him in the face, and I was so angry I was shaking. And that is why he didn’t want me to drive home.
But how it really ended was with a simple message: “You have a good business, but you need to get busy building it.”
Now I’m not lazy. I was working all the hours, so this is not a statement about work ethic. This is a statement about attitude, about focus, about execution, about selling and I was falling short. I thought I wasn’t, but I most certainly was.
What happened next was life changing for me and the company.
I went home and set out a plan. A very very focused plan, and that plan was to dominate a single vertical with a single use-case. A use-case that only accounted for 20% of our revenue at the time (which was measly) - but my gut was telling me it was the right choice. The story made sense.
This was not a happy time. The team were not happy with the much smaller vision, I had to fire 2 of my head guys and pay them out, I was completely broke and had a mortgage sized debt to pay off, and quite a few people around me were smelling blood.
But what happened next was amazing.
In our first year with the revised focus, we nailed deals with the US Department of Defense, Microsoft, Symantec, HP and others. We were over doubling our growth year-on-year. We aligned closely with salesforce.com and fought side-by-side with their team. I had the opportunity to leave rainy Wales and travel around the world, meeting some really amazing customers. The deals we did were intensely interesting at times and I felt we were really making a difference to the world. We waged a charm offensive on our customers. And ultimately, we sold the company to salesforce.com because of their feedback. The ride was a roller coaster of experiences.
The biggest, by far, break-through for me was discovering our growth engine. It was such as huge relief to really understand something so incredibly basic:
Who’s the customer and why are they buying from you?
It was like a revelation. I know anyone reading this will say “duh”, but these things are not obvious (and often incorrect). But more than that, there’s one more very important addition to the above question:
Can you reach them?
What we discovered was that by focusing our message, we could fund our growth.We could crank the wheel and money came out; by telling a focused story. As more money came out, we found we could fund a bigger message and a broader reach.
I saw it a bit like this. We started the business with this idea of “full throttle” growth. We wanted to dominate our vision. However, what worked was more subtle. What worked was a slow reveal, a kind of “slow acceleration” to our vision, and as we on-boarded more and more customers, you could start to hear the turbo chargers kick in, then you could hear the engine drop a gear. It was immensely satisfying for everyone.
I know everyone wants to be the next Facebook or Twitter, but there are plenty of “other” IT companies quietly nailing it.