Member Edmundo Costa Speaks: Stop Trying to Boil the Ocean
The case at hand was brought by the CEO of a small technology company with proven success in several industries. He was looking for strategies to scale up across multiple verticals, yet recognized his resources were limited.
If you were in this situation, what would you do?
If I were in your position, I’d devote 100% of your sales, marketing and business development to a single market. Once you intimately know how to sell to that market, you can replicate sales tactics and scale the business.
We’ve traded insights for years together, and I’ve always admired your drive for success. Yet, I would be cautious at this tender point in your company’s growth. The problem you are describing is common: the technology has many successful horizontal applications. Which one to choose? Manufacturing? Healthcare? Financial? You’ve had success in all of these markets, so why not choose them all? You shouldn’t, because if you did, you’d be trying to boil the ocean. Investors cringe when they hear of under-resourced companies biting off more than they can chew. The dilution leads to ineffectiveness. Your product is surely capable of solving all these problems, but you lack the resources to adequately develop these different markets. Choose one.
Look at a way to segment the opportunities and pick a small enough market that has the best possible characteristics for you to succeed. Devote your resources there. Generally those markets are self-referencing: they have a similar sales process, purchasing behavior, as well as similar problems – all the things that define a common market. Moreover, these customers frequently have common applications or an application vendor that they use, and there may be some dominant partners who service that market. With one or two wins in that market, you have enabled yourself to replicate and scale-up, while containing your sales cost. Then, envision yourself achieving that same level of intimate knowledge and resultant success across multiple verticals.