How to Maintain Momentum
- Introduce a new marketing strategy every two years that puts the competition on the defensive.
Your customers, prospects and salespeople will appreciate it. This means your competitors’ salespeople will be answering your questions. This is a sure sign that you’re outselling the competition. However, the new strategy must be backed by good products, for which there is no substitute.
- Have a major cost-cutting every two years.
In a growing company it takes two years for costs to get out of control. Therefore, it is imperative to cut costs, including a staff reduction, at least every two years. If you do not cut costs, regardless of how profitable the company is, costs will get away from you, and you will eventually need a major cutback. This creates all kinds of attendant problems.
- Never invest in real estate.
Management of a growing software company invariably becomes enamored with real estate. There is a great temptation to build a corporate headquarters located on a corporate “campus.” The problem is that, while rapid corporate growth taxes management to the utmost, real estate is also a great consumer of management’s time. Size of executive’s offices, color of rugs, style of desks, floor layout and media capabilities of the executive conference room become major issues. A planned waterfall in the reception area is a sure sign that big trouble for your company is just around the corner.
- Find ways to get around the system.
Management by walking around is one way; personally meeting with customers and prospects is another. It’s imperative that you get around the “system” because the “system” will rarely give you the right answer with the proper emotion. The bigger and more successful you become, the more the “system” (i.e. bureaucracy) takes over.
- Understand that good references are key to selling your products.
Users are remarkably loyal to products they select and that are supported well. If you give them good service, they will sell many copies without you realizing it. Damaging this relationship with new versions or products that don’t work or with unreasonable fees should be avoided at all costs.
- Avoid investing in the “black hole.”
Every successful company becomes so confident with its success that it feels it has the “magic.” Consequently, it finds some new venture to invest in that allows it to pour the profits of their main business down the “black hole” of expansion. No successful company, regardless of size, is immune to this disease.
- Raise cash whenever you have the chance.
Raise cash when things are going well because something completely unanticipated will happen. Having sufficient cash reserves will help you through the bad times.
- Promote people with good judgment.
Most decisions in business are fairly obvious to which candidate has the best judgment. In addition, most “technical” decisions are really ones of judgment. When it comes to promoting someone in your company, the most important question to ask is critical. For example, knowing which products you make money on and which you don’t is a good start. See The Nines and Sixes