Read the article in Arctic Start Up site:
I’m writing this at an altitude of 10 kilometers in a plane to London. For an entrepreneur dedicated to the cloud service model the view outside of the window is rather fitting to be writing an article like this. ValueFrame was founded back in 2001. In ten years we have managed to become a key player in the Finnish Professional Services Automation market. We currently have 300 customers with 12 000 users in 14 different countries. This year we were nominated Country Representative for the HSBC European Business Awards. For the last five years we’ve been among the Deloitte Fast 50 list of fastest growing technology companies.
Back in the fall of 2001 when we founded ValueFramed the dot-com bubble had just burst. Most companies had lost their belief in internet-based applications (or actually most companies in our target market had never heard of them). Salesforce had been in the market for only two years and Amazon was still a small-scale player. Many firms still relied on ISDN or modem to connect to the internet. Only 360 million people were using the internet which is rather puny compared to the current figure of about 2 billion.
Against that setting our concept to start developing and selling a strictly internet-based SaaS solution to small and medium sized professional services companies may sound like Sancho Panza type of struggle. In the beginning you could say it was. It took a lot of legwork to find the first clients willing to trust their sensitive corporate data to the hands of a startup software company with no name. Especially since the data would reside “somewhere in the internet” so to speak. The market for our product didn’t actually exist but we were on the quest to create it.
Despite the early years we quickly saw that we had been right to believe in the rise of the cloud (even though it wasn’t called a Cloud service back then). In only about five years the SaaS model had become the norm especially within our potential target market. We have managed to achieve something but I can’t say that I’d do everything the same way if I started all over again with my current experience. Here are a few thoughts on issues that I’d advise fellow startups to consider (in arbitrary order):
- Focus. When you have selected your target market remember to stick to it. We decided to focus on the Professional Services SME’s from day one and have stuck to serving this segment. Focusing on them has allowed us to develop a competitive offering with limited resources.
- Do not underestimate the power of look and feel. You can never be too good at this. Most buyers, even though you would expect them to be rational, still make their decisions based on gut feeling. If a product or a service looks good – it must be good. Be prepared to spend enough on outside help to achieve a compelling design both for your product and for your marketing and other related materials. No need to remind anyone what Apple has done in this sector.
- Be prepared to fight for your position. If you are first to market you will most certainly not stay the only company in your field. Keep your eyes open for potential competitors. Find out their market entry strategies and prepare alternative counter strategies so that you can strengthen your own position.
- Arrange time for planning and follow-up. Yet another mantra that we always hear but never obey. This is one of the things that I could have paid more attention to during the past decade.
- Aim for early release (minimum viable product). A clinical, lab environment is not the right place to develop your offering. Expose yourself to the market as early as possible to get real customer feedback. We had five different companies in our pilot group and came out with the first official release 10 months after we’d started ValueFrame.
- Closing is just the opening. When you close a deal you open a relationship with a new client. Be prepared to spend enough time with them especially in the early months. Our aim is to achieve long-term relationships with our clients and try to avoid potentially damaging quick wins. Word of mouth is a key element in getting new clients. Satisfied long term clients will evangelise your offering to others.
- Involve everyone with sales and marketing. You would be surprised how your consultants and even programmers may contribute to selling and marketing if you give them the opportunity. A lot of our sales to existing clients come from our consultants meeting with our clients.
- Tell the world about your idea. Even though you and your team may feel you have come up with a brilliant product or service that everyone will be drooling to buy, the hard fact is that nobody outside your organization could actually care less. They won’t be lining at your door unless you yell it to the world. The best you can do is to tell about your offering to everyone you meet. You never know when the right person is on the receiving end. I’ve managed to close some deals by opening my mouth for example in the train.
- Do only things you believe in. When you go out to potential buyers you must radiate utmost confidence in your idea. Steel your heart against any doubts. Potential clients will sense if you don’t believe in what you do and steer clear from your offering.
- Be quick to fire and slow to hire (compliments to Mr. Guy Kawasaki). Finding the right people and then hanging on to them is one important key to success. You should take time to be sure that you are hiring the right person. However, if you see that the new hire is not a good fit to your team do not hesitate to make the tough call. I recommend Kawasaki’s book “The Art of the Start” for good advice on the subject.
Obviously the list above is far from complete. I’ve tried to avoid stating things such as “remember to have enough sales muscle” that are blatantly obvious instructions (yet often forgotten in the startup world). There could be dozens of other things I could also list. But I hope you find at least one of these worth further thought.
Harri Kanerva is the CEO, partner and Co-founder of ValueFrame Oy. He is also a partner and member of the board at TietoAkseli Yhtiöt Oy and a member of the board at IT start-up Observis Oy. Harri started as an entrepreneur first time at the age of 21 when he founded a firm operating two movie theaters. Prior to ValueFrame he has worked in IT Consulting and Information Systems Development at Bowne Global Solutions, ICL Data and F-Secure. Harri has a master’s degree in economics from the University of Jyväskylä. In his scarce free time he enjoys the company of his family of wife and two girls. His hobbies include jogging, historical novels and classical singing.