Do you want to make a fortune? Would you like to know how to do it?
In the Software Tech sector, fortunes can be made - and lost - in a very short space of time. As a result, competition is fierce. We live in a hyper-connected era, where buyers can search the whole world on a mobile tablet without even getting out from underneath their duvet. In this super-connected world there is huge competition and fewer winners. Copying the market leader in your sector will always consign you to being just a cheap imitation so it is essential you differentiate yourself and create your own unique, competitive space.
Zero to Hero and Back Again in the Blink of an Eye
Creating the right conditions for a fast growth tech company requires more than having a good idea and designing 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 super-duper technology. There continues to be an abundance of investment companies that are willing to invest money in start-ups and small to medium sized companies calculating that a percentage of tthem will generate enormous returns. Naturally, competition is extremely fierce for such investment as young companies jostle to be seen and heard in an increasingly crowded landscape. To create a fast growth company, you have to be smarter and perform better across an ever-broader spectrum of expertise.
Parallels in the Sporting Arena
Parallels with this environment can be found in the sporting arena. Under the leadership of Race Director, Dave Brailsford, the British Cycling Federation has carved out a dominant position in elite cycling for Great Britain. This was achieved via a laser-like focus on all areas of the squad's training, combined with an almost fanatical attention to every detail in competition. This included analysing and improving every aspect of the athletes’ preparation - from their sleep patterns, to their diet, clothing and even including precise instructions as to how they should wash their hands after using the bathroom in order to minimise the spread of bacteria and the likelihood of infection and illness.
A HIghly Competitive Sector
In the past, some purely technical software companies acheived success, to varying degrees, but still had a vulnerable "soft underbelly" within their businesses. The perception of technology as the perfect remedy for inefficiency, combined with the investment community’s willingness to invest large tranches of money in a relatively small pool of available fast tech companies, created a false economy. - and a falso sense of security for such pure-play companies. In the current climate, end users are increasingly savvy and, with competition fierce and plentiful, those Utopian days are now long gone.
Gaps in Leadership Skills can Permeate an Entire Organisation
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 permeate the entire organisation, reducing overall performance. At Boss Equity, we often encounter CEO's who have successfully made multiple acquisitions throughout their careers, tand have achieved spectacular growth, yet who sacrifice performance and value in their business because they lack digital marketing knowledge and have failed to create an environment in which their sales people can thrive.
A Cross-Country Rally Race
Think of your company as a racing car on an extensive, cross-country rally. The finish line would be your exit plan. Your strategic business plan would be your race plan; your marketing, your navigation system. The car dashboard would be the output from your finance department. The fuel in your tank would be your cashflow; sales your accelerator. Potentially, your Finance Director is also your hand brake - but maybe that is casting an unfair aspersion☺ If you remove or hinder the performance of any one of those elements, you are very unlikely to win the race.
Identify and Eliminate Skillset Deficiencies
An extensive skillset is required if you want to win at the game of business. Of utmost importance is leadership's ability to identify the areas where the company is lacking in expertise and the knowledge to eliminate that deficiency. For smaller and medium sized companies, it is clearly 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 or on a retainer basis.