If You’re Not Fixing Someone’s Leaky Pipe, What Are You in Business for?

By Philip Lay, Senior Advisor, The Chasm Group LLC Tuning Your Strategy for Post-Covid Times   You campaign in poetry. You govern in prose.” – Mario Cuomo, former three-term governor of New York State, 1983-94 If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” – Albert Einstein Change does not roll in on the wheels of inevitability but comes through continuous struggle.” – Martin Luther King, Jr.   My purpose here is to clarify why in today’s C19 downturn virtually every tech company needs to have a clear picture of how they fix critical breakages in one or more of their target customers’ business processes. In order to bring this concept to life it sometimes helps to use a metaphor such as the Leaky Pipe, which I’ll describe further down. But let me start by describing what the three quotes above have to do with our key topic. Cuomo quote: It is my belief that tech companies spend too much time rhapsodizing about how they plan to “disrupt” the world – the equivalent here of campaigning in poetry – while they spend far too little time digging into the painful

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Why Now’s the Time to Get Customer Success Right

By Philip Lay, Senior Advisor, The Chasm Group LLC Synopsis: Customer success is a broken promise in 95% of tech companies. CEOs, CROs and sales teams are generally preoccupied with chasing new logos, and scarce CSMs scramble to minimize churn and secure upsells. Frequently, they have no idea about their customer’s business objectives or success criteria. In a downturn like today’s Covid-19 crisis, the risks of cancelled contracts and lost relationships is heightened, just when winning new logos is harder to pull off. This is exactly the time when executives and their customer-facing staff must engage more fully with their major customers – and really help them achieve their desired business outcomes. Don’t celebrate closing a sale, celebrate opening a relationship.” – Patricia Fripp, speaker, author and entrepreneur Customer success is simply ensuring that your customers achieve their desired outcome through their interactions with your company. That’s it.” – Lincoln Murphy, growth consultant, Sixteen Ventures Every company’s greatest assets are its customers, because without customers there is no company.” – Michael Leboeuf, business author & former professor, University of New Orleans For many if not most enterprise SaaS companies, customer success is still a new game, and one they are playing with a weak

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Zoom – The Latest Product to Become a Verb

By Philip Lay, Senior Advisor, The Chasm Group LLC 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. What Just Happened? With so many millions of people worldwide now stuck at home to avoid the contagion, we’ve seen a massive surge in demand for ways of connecting with the outside world. Be it in our personal lives, in how we run our business, or even in how world leaders keep governing through the crisis, this is a time when we are all leaning heavily on technology to not only keep us connected but keep us alive. Consequently, TV news announcers and newspaper reporters are increasingly using “Zoom” as a synonym for videoconferencing, something that until recently was only happening in business settings. Until now FaceTime, Skype and WhatsApp have been the predominant video-calling apps for friends and family to stay in touch, but something has changed here too. Thus the work-from-home (WFH) and

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The Scaleup Journey: Crossing the Chasm in Style

Case Study – The rapid rise of mobile banking startup Clairmail   By Philip Lay, Senior Advisor, The Chasm Group LLC   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.

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The Scaleup Journey: Dealing with Founder-CEO Burnout

By Philip Lay, Senior Advisor, The Chasm Group LLC 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. The companies in my informal “survey” range from $3m to $40m in ARR, with growth rates anywhere between 15% and 100% plus. The vast majority were founded in the 2009–2013 timeframe, so they are between six and ten years old. The majority have been financed through three or as many as four or five rounds of VC/PE funding. Many of them have developed a second and third product offering, and thus may already be veterans of more than one hazardous and nerve-wracking “chasm-crossing” experience, which can severely test the most resilient of founding and executive teams. All of the CEOs in this cohort except two were founders or co-founders of their respective companies; of the two hired-in CEOs, they’ve been in the job for six years and seven years respectively. Most of these individuals are first-time CEOs who, in light of the instant gratification culture in tech

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UK vs US Tech: Can the Tortoise Ever Catch the Hare?

By Philip Lay, Senior Advisor, The Chasm Group LLC “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. In this scenario the US tech industry is the hare, quick to act

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Scaling Up is Hard to Do

By Philip Lay, Senior Advisor, The Chasm Group LLC 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. Furthermore, various industry experts over the years have provided a roadmap for startups to navigate their way from brilliant idea to nascent business; one recent example is Eric Ries’s Lean Startup framework, which teaches entrepreneurs to develop a “minimum viable product” (MVP), perform systematic iteration as they engage with early customers, and execute strategic pivots where necessary as they seek to prove their product/market fit. However, companies in “scale-up” mode, to use the use the favored lingo of our times, do not yet have a commonly acknowledged framework or clearly defined set of best practices to help them mitigate the risks as they seek to grow from little or no scale to larger scale. B2B SaaS is Very Different from B2C SaaS and Requires a Different Growth Strategy Worse, a Get Big Fast mindset often takes hold among investors and the founding team itself,

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The Six Dimensions for Expanding Customer Engagement and TCV

By Philip Lay, Senior Advisor, The Chasm Group LLC 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! Land & Expand – Customer Success Story “The major business problem that Salesforce (the customer in this story) needed to address was the problem of scaling their business efficiently by closing more deals faster without increasing administrative or sales resources. Because many of its customer onboarding processes were manual, sales reps complained that up to 40% of their time was taken up by admin tasks including chasing document signatures by customers as well as Salesforce managers. The company eventually determined that

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Visionaries are from Mars, Pragmatists are from Venus

By Philip Lay, Senior Advisor, The Chasm Group LLC 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. Not only did this move – the adoption of one of the first full-blown business-to-business e-commerce sites, often referred to as Dell On-Line – consolidate Dell as a household name but it provided the company with a gorilla-strength moat against Compaq, Packard-Bell, IBM (the three largest makers at the time, plus Gateway, Acer and other PC makers in what was virtually a “moat-less” marketplace as far as the essential laptop and desktop product capabilities were concerned. The dramatic business outcomes for Dell from this major process re-engineering initiative – multiples of the profitability at a fraction of the inventory handling cost in a generally low-margin business, and a surge up the charts into the top 3 alongside Compaq and HP – set every competitor on its

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Nobody Cares About Your “Platform” Till They Know What Real Problems It Solves

By Philip Lay, Senior Advisor, The Chasm Group LLC 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. Once you’ve successfully deployed a solution to that problem, you can talk about how your platform enables them to solve another important problem or use case, and then another, and so on. As your customers see the versatility of your technology and services, it will dawn on them to ask about other problems that you may not yet have contemplated. The more your technology can address multiple use cases, and the more widely adopted they are, the more permission you get to talk about the power and versatility of your platform. What makes your company even more relevant to customers from then on is how your platform enables other companies to develop applications leveraging the benefits of your architecture. And if your platform an generate network effects, even better. Salesforce and Amazon: Two

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