Ready for 2015? Why you shouldn’t bet the farm!
Will you pursue growth rates, surpassing your competitors?
Are you moving into new geographic markets you know very little about?
Are you launching a Cloud based version of you current perpetual licensed product?
Are you contemplating one of your first acquisitions?
With the speed of changes facing the software industry you must be making bold moves all the time. Staying ahead of competitors and moving towards the global leadership position in your market segment will not happen by itself.
Increase in velocity will increase risk and cause failures. Therefore you should not bet the farm on a business venture where you cannot mitigate the risk. It may cause the death of your company.
There is no “safe” way but there is a “safer” way
The “safer” way is to make many small and short steps instead of a few gigantic steps.
Big companies can make gigantic steps and can afford to loose billions of dollars en route. Believe me, this happens all the time.
The academic approach to eliminating risk is gaining more insight. Market analysis, feasibility studies etc. should shed light over the circumstances of your future.
The issue is that any attempt to map or predict the future takes time, costs a lot of money and may be inaccurate.
The “safer” way is to actually do what you intend to do, but downsize it to a small scale, real life, test scenario.
If you want to move into the German market, then start by talking to some of you potential customers. Pick some who fits your ideal customer profile spot on and hear what they have to say. Sell to them and monitor their reactions. My bet is that you will learn 100 times more than a market analysis done by a major consulting company will ever teach you.
You will have to respond and act upon what you learn from talking to potential customers. You may have to make changes to your product, you may have to set up a subsidiary, you may have to work with certain partners etc. etc. The big difference is that whatever you do brings you one step closer to a deal and you are building relationships with real customers all along the way.
Agile or Lean Business Development – Engage a Guide
We may call this agile or lean business development. For most software companies this is the approach that will take them into new business ventures without having to bet the farm.
Unfortunately it takes solid business acumen to apply this approach. The big challenge is to constantly interpret the feedback and draw the conclusions. What do you ignore? What do you act upon? What needs further testing?
If you are responsible for the project you will not be able to make the correct conclusions. Your obsession with delivering the results on time will distort your assessment of reality. You will make the wrong conclusions and you will fail. You need someone with considerable experience in business development who can guide you and coach you through the process.
No one climbs Mount Everest one their own. Not the fist time, not the second time and not the third time. Neither the planning nor the actual climb.
The biggest issue for NASA in the sixties was not getting a man on the moon. It was getting him back again.