Transitions - Sales & Marketing
Solution providers spend the early years of their existence immensely focused on building their product(s). The vast majority of resources are allocated to programmers, engineers, product development people, etc. This is as it should be for without a solid product little else is possible. And yet as a company aspires to grow there comes a point where, as a percentage of total resources, a proportionately larger share must be allocated to sales and marketing. This transition point is a vital prerequisite to growth and yet many solution providers miss this timing and, in so doing, miss windows of opportunity – sometimes for years on end.
Some guidance:
Don’t wait for the perfect product before making the transition. While you always strive for product excellence the sales & marketing transition should occur at the “good” stage of product evolution. There is a temptation to believe that one more feature or function and the world will beat a path to your door. It very rarely works that way. We have all seen examples of lesser products doing well in the marketplace. The reason is almost always that they place a greater emphasis on sales & marketing. There comes a point where that next resource dollar is better spent on sales & marketing rather than on the next feature or function. Do an assessment and determine if the timing is right for this transition and then, if so, make it an overarching organizational objective.
CEOs and members of executive teams are often founders and can be quite technical in their world view. They have impressive domain expertise and understand their products inside and out. They may not, however, have great expertise in sales & marketing or worse, may view sales & marketing people as “overhead”. It is certainly true that quality sales & marketing people are not easy to find, but the good ones are worth their weight in gold. I speak directly from personal experience. Early in my career my entire focus was on technical and product related issues. I was very fortunate to have worked with people who broadened my understanding. When the timing is right surround yourself with people who see the world through a sales & marketing lens and truly listen to their perspective.
Sales & marketing people are expensive and no one has unlimited resources. You may know that the transition needs to happen, but you simply don’t have the resources to do it. That’s a very tough spot and many companies find themselves in exactly that situation. As a general rule investments in sales & marketing precede significant growth. It is what drives growth. However, there is an agonizing lag between that investment and the anticipated payoff on account of long sales cycles and numerous other factors. If you are confident in your product and you are confident in the demand for that product within the marketplace, then it may be time to raise capital. Raising capital is major subject unto itself, but most sophisticated investors would prefer to provide growth capital (sales & marketing) once product development risk has already been mitigated.
There is nothing easy about orchestrating a transition to greater focus on sales & marketing. It can be expensive and risky (without the right people). And yet without this transition it is very difficult to fully realize your highest ambitions for growth. First and foremost it starts with recognition and I would encourage people to assess their situation and put some form of plan in place. Good luck.
By Lance Jacobs
Lance is a veteran of the retail technology space, having grown and orchestrated a liquidity event for both TCI (acquired by Retalix / NCR) and KSS (acquired by Dunnhumby). He has learned much along the way and at this stage of his career has a genuine desire to give back to the industry that has been his life’s focus. Lance roots for the entrepreneurs of early and mid-stage tech companies that drive innovation. He serves in an advisory role, providing strategic and tactical guidance across strategy development, sales & marketing, product development and management, finance, and implementations. Lance can be reached at lancecjacobs@gmail.com, or 520-906-4313