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If you’re so clever, how come you’re not making any money?
I like profit. Whatever my turnover, as long as my profit number looks good, I’m doing ok. How many tech vendors are there out there wondering why turnover is growing but they are still running at a loss?
Those running a plan based on losses until year X may be ok but what I’m seeing is more and more vendors at 10 years still failing to hit even half the industry average 30% net profit.
Here are 5 reasons why you are not making money. Some of them are easily addressable, while some are more challenging, even existential.
Who told you there was demand for your product?
No one does research anymore. Total addressable market, market penetration, competition, forward demand and so on. Everyone I ever met had a great piece of software; there’s never anything wrong with the product, it’s just that demand may simply not be there. It’s not that companies do no research, it’s just that they tend to look for results that serve their case.
Who told you marketing wasn’t really all that important
In a crowded and competitive market, marketing is everything. Sure, you’d expect me to say that, but I’ve seen tens of millions lost for want of marketing strategy, planning and execution. It may be your only differentiator if you are just another mobile wallet, recommendation engine or POS vendor. Marketing can not only help define your why and what, but it can also tell a better story than the next guy.
Who told you that decision makers are just waiting for your solution?
They’re not. The landscape that sits between you and them is overcrowded with incumbent and competing vendors, established points of view, complex politics, strange corporate cultures, a host of influencers who have nothing to gain by talking to you, evil procurement trolls, and a permanent sense of unease brought about by rapid market changes.
Who told you your product was any good?
You can win awards, accolades for the company most likely to … , an audience of thousands at a trade show, and a flood of followers on social media. But it’s all fuel for your corporate narcissism from people who seek similar approbation. Only when you deliver something of value to a user is any of it real. And then deliver it again and again. Plenty of vendors have a flagship customer that they won partly because they were prepared to do a deal for less than cost price. That can cause things to look as if they are going well, when they are really not.
Who told you not to worry and just keep going
You all know this one – If you always do what you’ve always done, you’ll always get what you always got. My advice, which I need to take as much as anyone is :
- Seek advice from perfect strangers
- Change your routine
- Review your costs
- Qualify your opportunities harder
- Understand the difference between an opportunity and a lead
- Review your messaging – does it contain a powerful value statement?
- Throw all your marketing weight behind sales
- Take more time to think
- Call your Mum
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