The Point

Momentum in Business

Here is how it feels to have momentum. The phones are ringing. We don’t have time to read the morning newspaper because we have a tough time keeping up with the proposals we need to review and the contracts we need to read. Our delivery teams are busy. At the water cooler people talk about their premier airline status. We try to squeeze more functionality into the next release to make clients happy. We look at new hires, we even find more office space. The company is buzzing.  

Here is how it feels if momentum is slipping.  Customers are tough to get hold of. Deals are postponed. There are sudden departures from your own ranks. All and all, it’s quiet.

We all like to see the former, and we all dread the latter. The recession is over, but we are very far away from a booming economy. What are the lessons learned from the last few years operating in an economy that is trending sideways at best? How do you create momentum? What can we do to make our customers believe in our company and our solution? What can you do to make your own people believe they can make the “impossible” possible?

Here are my five lessons learned while operating successfully in a tough market environment.

1. Messaging – In any economy, our messages should be customer-focused, not product-focused. We need to know what the pain points are of our customers and how we can address them. Keep in mind that in a tough economy, customers’ needs and concerns change.  We need to adjust our messaging accordingly

• Demonstrate value and return on investment. This can be done by pointing out that customers can do more with less, by simplifying a process or enhancing the value of our client’s offering. For example, if our product is exceptionally easy to use, we can demonstrate how the improved ease  translates into savings.
• Decision-makers are increasingly wary about their jobs now. They need to understand how to enter a relationship with us safely.

2. Laser focus on target markets – If business gets tough the natural inclination is to chase every opportunity in order not to miss out. Someone drowning in the ocean flails frantically trying to keep his head above the water. I would recommend the opposite approach. Use coordinated strokes to keep your company’s head above the waterline.

• Have laser focus on the core companies and industries that can use your products or services. Make sure that you truly provide value and then pursue these markets relentlessly. Instead of simply increasing the “shots on goal” increase the quality of your company’s pipeline.
• In tough times, businesses will enter a relationship with our organization if we provide them with good reasons. (e.g strategic reasons, operational efficiencies, ROI).

3. Pricing – Take a look at your approach to pricing. This doesn’t mean you should enter deals at steep discounts, but here are some options to consider.

• Update pricing models. If we have been selling bundled products, consider un-bundling and offering products/solutions in smaller chunks. A number of smaller deals is better than no sale at all.
• Consider try-and-buy offers. Give customers a taste of the solution and, assuming the product or service is as irresistible as you know it is, you will only defer revenue briefly. This also helps to reduce the perceived risk of your customer betting her career on entering a relationship with your company.

4. Engage customers – Focus the marketing on “conversations” with customers. The days of one-way marketing are over. Customers want to talk with you on their terms, so narrow the gap. Make it personal. Be accessible.

• Nurture prospects until they are ready to do business.
• Encourage customers to be part of the conversation by building online communities that provide value to them while keeping you front-of-mind.
• Stay close to existing customers and maintain the relationships. Customer events such as user conferences are a great way to accomplish that.

5. Internal communication – Make sure that the people in the organization share your convictions. They get the news, too. Some will have doubts about the company’s future. Others are afraid of rising prices and a stagnant economy. As much as you are convinced of the viability of your strategy, your people need to be convinced as well. They need to believe that the goals for the company are achievable.  And they need to see the path. Be authentic in the way you deliver your strategy within the organization.

TIE-DC – Review of 2009

We still have about six weeks to go this year, but it is safe to say that under the leadership of D.P. Venkatesh and Amir Hudda we were able to put a number of serious events on the map in 2009. Without exceptions the board has been in full alignment and support throughout this process. Here are some of the event highlights.

Leadership Dinner Series
The TiE Leadership Dinner Series was designed as an exclusive event for our charter members. The events provide an intimate setting (50 people maximum) for Charter Members to meet accomplished executives and one another. Our speakers share candid advice and lessons learned in informal talks.This year’s line up included:

• Sudhakar Kesavan, CEO of $700M ICF International was the inaugural Leadership Dinner Series speaker sharing his story of building ICF into a major presence in the federal IT market. 
• Mike Daniels, SAIC: Our June Leadership Dinner Series featured Mike Daniels, SAIC Board Member who was responsible for the sale of Network Solutions to SAIC and Verisign for $19.6 billion in 2000. The 40+ Charter Members in attendance were treated to Daniels’ insights on how to identify the next waves in business and capitalize on them for financial and business gain. 
• Nitin Pradhan, CTO of DOT, shared his vision of the role of IT in a Web 2.0 world with Charter Members to in October. Highlighting how he is working to align IT with the business of DOT, Pradhan shared management models for building the IT organization into a business-focused group that uses their technology expertise to answer mission critical challenges.
• Magid Abraham,Magid Abraham, CEO comScore, shared his experiences in building comScore from an idea into the global leader in measuring the digital world and the preferred source of digital marketing intelligence with Charter Members in November.

 
CRAWL-WALK-RUN
This three part series was designed to discuss the three stages of raising capital in the life cycle of a business – from angel investing to venture capital and private equity to IPO or sale of the company. In support of our “Expanding Entrepreneurship” pillar the dynamic panels discussed the state of each market and tips for navigating each stage.

CRAWL: The first stage (CRAWL) focused on raising capital from angel investors, seed investors and very early stage venture capital firms. Panelists were John May of Active Angel Investors, Dendy Young of McLean Capital Group, Phil Garfinkle of Trust Strategy Group, and Michael W. Broderick of Uniloc USA. The panel shared stories of successes and lessons learned from their work with early stage companies.
 
WALK: The WALK panel was an all-star group of venture capital investors from across the country. Panelists were Vispi Daver (Sierra Ventures), Chip Hazard (Flybridge Capital), Roger Novak  (Novak Biddle), Alan Taetle (Noro-Moseley Partners) and Frank Tower (Gold Hill Capital). Each panelist shared their candid thoughts on the state of the VC market including difficulties they face in finding investments and supporting existing portfolio companies.
 
RUN: Watch for information on our RUN panel slated for January 2010.
 

Managing in Troubled Times

In partnership with American University’s Kogod School of business, TiE DC brought together a group of accomplished CEOs to discuss their success and lessons learned managing their companies through a down economy. Focusing on the “Expanding Entrepreneurship” pillar, The panelists candidly shared how they made difficult decisions and what challenges lie ahead. The panel included Roy Dunbar (CEO Network Solutions), Shiv Krishnan (Chairman and CEO INDUS); Bob Segert (President and CEO GXS); Dave Shea (Chairman and CEO Bowne)  and was moderated by AU Professor Robert Sicina. 

Special events

Ambassador Meera Shankar: In July, TiE was proud to welcome Ms. Meera Shankar, the new Indian Ambassador to the United States. In support of our “Spotlight on India” pillar, Ms Shankar spoke on the major initiatives of the Indian Government. She also touched on the brain drain, due to progressive thinkers coming to the US to start companies; though, she’d rather call it “brain circulation,” as those who come here bring ideas back to the India when visiting friends and family.

Vivek Kundra, Federal CIO: In September, TiE was pleased to welcome Vivek Kundra. Prior to his White House appointment formerly served in Mayor Fenty’s cabinet as the Chief Technology Officer (CTO) for the District of Columbia, responsible for technology operations and strategy for 86 agencies.  He has been recognized among the top 25 CTO’s in the country and as the 2008 IT Executive of the Year for his pioneering work to drive transparency, engage citizens and lower the cost of government operations. Kundra shared his areas of focus and talked to the audience about how they can help him achieve his goals.

Aneesh Chopra, Federal CTO: In November, Federal CTO Aneesh Chopra enjoyed a type of homecoming at TiE’s reception in his honor. Chopra shared how his affiliation with TiE helped him make connections for his then boss, David Bradley at the Advisory Board, which led to a higher position within the company and set the stage for him being named as Secretary of Technology for the Commonwealth of Virginia. Chopra talked about his focus on bringing transparency to the numerous government programs available to entrepreneurs and researchers as well as his desire to work with the best and brightest minds in technology to come up with solutions for better access to information around health care and energy usage. This access to information, Chopra believes, is the first step in changing the behaviors and status quo for both healthcare and energy consumption.

TIE DC Gala

We will end this TIE-DC season with our Annual Gala in December. Featured speaker will be Senator Mark Wanner. This is a great opportunity to learn more about our organization and perhaps get involved. You can find more information on TIE-DC’s website. My special thanks go out to Piper Conrad from Speakerbox for all her help putting this article together.

The VC Pitch: The inside scoop

Let’s say you started a business and are looking for money to either jump start and/or grow your operation. While working on the widget, finding customers/partners and lining up your team, you also need to find time to put a pitch together to convince the investor community that you are the ONE. The regular entrepreneur doesn’t have the opportunity to be in front of investors (angels, venture capitalists etc.) every day to stepwise improve their pitch. This means they need to bring their A-game to those few occasions. How do entrepreneurs prepare for that?

 TIE DC offers great help to entrepreneurs in this type of situation. On a regular basis, executives from start-ups and small businesses are being invited to an event called “The VC Pitch”. At the event they are allowed to test out their presentation in front of a panel of expert judges. In this year’s February event we had an interesting combination of venture capitalists, business executives and entrepreneurs as judges. The presenting companies came from a variety of technology areas: Web 2.0, bio-tech, medical devices and environmental friendly – green - technologies. The presenters each had a 5-7 minute window to make their case (quite the Toastmasters format). Immediately after the presentation, the judges gave feedback for 2-3 minutes.

Here are some general recommendations for putting a VC Pitch together:

1. Outline the value proposition: Why are customers interested in the new product or service? How do they benefit? Why will they be inclined to pay what you are asking for?

 2. Describe what makes your company unique: Why is your offering special? What differentiates your company from your competition? Why are you able to compete?

 3. Outline how you defend your Intellectual Property: Is there IP in the first place? How well is it protected?

 4. Name the key players: Who is making this company successful? What is the background of these key people? What are the key hires you are considering?

5. Explain the funding request: How much money are you looking for? What are you going to do with it? What is the predicted impact on your business?

In general, there is no replacement for confidence. Open strong and accelerate from there. Investors appreciate clarity. Be sure that your planning assumptions are explicit and will survive the back-of-the-envelope test. The judges, who are coming to this event without any personal business interest, are highly efficient in discovering anything that doesn’t make sense at face value. The feedback is direct, so be prepared. However, after talking to all presenters at the end, it became clear to me that everybody appreciated the professional input.