How can anyone fail to have noticed the sudden prominence of videoconferencing app Zoom since the outbreak of the Coronavirus crisis? Despite facing established competitors like Apple, Microsoft, and Facebook in consumer video-calling and Cisco and Google in videoconferencing at work, Zoom appears to have literally zoomed to the top of the charts in just the past couple of months.
Case Study – The rapid rise of mobile banking startup Clairmail
“Chasm crossing is not the end, but rather the beginning, of mainstream market development.”
“Entering the mainstream market is an act of burglary, of breaking and entering, of deception, often even of stealth.”
“To become a going concern, a persistent entity in the market, you need a market segment that will commit to you as its de facto standard for enabling a critical business process.”
“One of the most important lessons about crossing the chasm is that the task ultimately requires achieving an unusual degree of company unity during the crossing period.”
“You get installed by the pragmatists as the leader, and from then on, they conspire to help keep you there.”
– Geoffrey Moore, various quotes on the theme of crossing the chasm into the mainstream market
Sometimes the best company success stories only get to be told through informal anecdotes, press releases, Powerpoint slide decks, or video testimonials. In such situations, only those close to the company really benefit and the key learnings and best practices are never properly learned or leveraged by other entrepreneurs and management teams.
Among the thirty founder-CEOs of tech scaleups with whom I have worked over the past year or so, I’ve noticed that a disturbingly high percentage are experiencing or exhibiting signs of burnout, sufficient in some cases to place the continued growth of their respective businesses at serious risk.
“To win a race, the swiftness of a dart
Availeth not without a timely start.
The hare and tortoise are my witnesses.
Said tortoise to the swiftest thing that is,
“I’ll bet that you’ll not reach, so soon as I
The tree on yonder hill we spy…
The race is by the tortoise won.
Cries she, “My senses do I lack?
What boots your boasted swiftness now?
You’re beat! and yet, you must allow,
I bore my house upon my back.”
The Hare & Tortoise, La Fontaine fable (1668)
translated by Elizur Wright, Wikisource
I must say that I’m not sure that La Fontaine’s fable of the hare and the tortoise provides a totally apt metaphor for the question I am posing here. However, I think there are definite similarities to the competition between US and UK tech companies. The fable tells the story of a tortoise that, when suitably provoked by a hare, challenges the much faster hare to a race; the cocky hare takes a nap during the race, while the slow and steady tortoise reaches the finish line first.
One Problem to Avoid at All Costs: Premature Scaling
Today there is an abundance of incubators, accelerators, angel investors, and VC firms to help founding teams avoid the many risks of failure and take full advantage of their opportunities as they seek to get their startup business successfully off the ground.
Picture the following customer success story. In parallel, note the various dimensions in which the relationship between vendor and customer expands.
Further down, I summarize the six possible dimensions in which you may be able to expand each of your major customer relationships and, accordingly, the annual contract value of each relationship.
This specific story is about adoption of e-signature services by a prominent global organization, adapted from the vendor’s customer success page on its web site. From earlier field research, I have seen how proactive this vendor has been in deploying customer success resources in service to their major corporate customers. If only most Saas vendors were half as proactive in this pursuit!
One story of visionary buying behavior that I think still sums up the difference between how visionaries behave when responding to disruptive innovations is the tale of how Dell Computer changed the competitive dynamics in the ultra-competitive PC market in the mid-90s (*), and more specifically how Dell’s competitors failed to adapt or emulate their move despite all rational evidence that it was the only way to stay competitive.
Altogether now: Applications come first, platform comes second. Not the other way around!
In your marketing, on your website, or in front of customers, “platform” is practically a suicidal term until customers have shown that they care about what your product or service and the architecture behind it can do to help them solve at least one important, preferably urgent, business problem.
Ever since the advent of cheap and plentiful capital following the global financial crisis, a new business model has gradually muscled its way to the forefront, in many cases supplanting the conventional B2C — business to consumer — model and co-existing alongside the B2B — business to business — business model.
This is venture capital to consumer model which has become commonplace, particularly in consumer markets. Virtually every venture firm has one or more intentional or unintentionalVC2C’s in its portfolio.
At this point early in the new year, chances are that you’re either (still) celebrating after closing some of the large enterprise sales deals that you had in your Q4 pipeline, or lamenting one or more deals that slipped into the new fiscal year or – perish the thought – just fell out of your funnel.