When the new CEO started, it was clear to everyone in DecisionPoint, he knew what our strengths were, and where we needed to go. He had formerly worked for a company that DecisionPoint competed with and knew the market quite well. He backed away from the end user access tool strategy of the previous CEO without completely leaving the market, and re-focused the organization back to our original product line. Additionally, the new VP of Engineering was going to work on re-organizing the engineering organization to align with the new direction and priorities. There was a renewed focus and energy all throughout DecisionPoint, and we were once again optimistic about where we were headed.
Both the new CEO and VP of Engineering were from the Bay Area, and they had no intention of moving to Portland. They wanted to establish a base in the Bay Area, but all of us that were based in Portland would be able to stay in Portland. There was a twist to this early on. We had three key engineers working in Portland, and they had spent the last couple of years working on the end user access tool. Originally, the new VP of Engineering wanted to re-establish the base of engineers in the Bay Area, and convert the three engineers in Portland to implementation resources. I knew that this would be a mistake as they represented the core of DecisionPoint’s collective engineering experience, and that if they were moved from engineering they would eventually leave. I fought hard to keep the three of them in engineering, but ended up settling for having two of them stay in engineering with the third moving to implementation. As expected, the third engineer left shortly after his first customer implementation assignment.
The VP of Engineering also brought in one of his former colleagues as an engineering manager. This individual split his time between Portland and the Bay Area for a while, but his assignment was to start building out the engineering organization in the Bay Area. The engineering manager was quite good at both people and project management, and he was very much a realist when it came to schedules. Also, he already came with the respect of the VP of Engineering, so he was able to accomplish a lot of things to solidify the engineering organization. When we released the end user access tool, it was clear that there were some quality issues, so the first goal of the organization was to clean up all of the quality problems and establish a more rigorous testing of our products before they were released. The engineering manager was pretty picky about the people he hired, and shortly after he came on board, he found two good engineers for the Bay Area office. The goal was to transition some of the responsibilities of the three engineers in Portland down to the engineers in the Bay Area.
The first product to be transitioned to the Bay Area engineers was our original product line, which I have called “plumbing”. This represented our oldest and most stable product line. The technology was a bit dated as the server code was written in C and the client code was written in C#. Additionally, the C# implementation had been done several years prior by engineers that were learning C# as they went. This meant that the client code needed a lot of cleanup and fine tuning. Also, the server code was to be converted to java in order to bring it up to the latest technology. Overall, the transition of the older product lines to the Bay Area engineers was relatively smooth. They handled the transition, conversion, and cleanup quickly, and customers that upgraded to the new code had a seamless transition.
The bigger challenge was how to resolve the quality issues that we had with the end user access software we had built and released. Again, with hindsight, the product was probably released prematurely. We did a lot of unit testing (testing individual pieces) on it, but there wasn’t a lot of integration testing (testing of how things worked together). Plus, we probably should have classified the initial release of the software as either an alpha or a beta rather than production quality. The goal was to get this tool up to the same production quality as the rest of the product line. So, the two engineers left in Portland were assigned the task to do that. Additionally, another engineer had been hired in the Bay Area to help in this area. The challenge would be getting this engineer up to speed quickly. As stated previously, the end user access tool was very complex, and was built using a lot of new concepts and technologies. So, getting any new engineer up to speed on it was going to be a difficult challenge to say the least. We did manage to get the third engineer in the Bay Area up to speed, but it took a lot longer than any of us had anticipated.
Turning back to the sales and marketing side of the equation, we were making real progress. The new CEO came on board with a lot of marketing experience, and he managed to retain our existing VP of Marketing from his predecessor. The goal was to spruce up and improve upon what we already had. He also retained the VP of Sales, so we had some continuity in our sales force as well. We were heading into a new year with a new attitude and new motivation. Our first quarter ended up quite well, and we hit our sales targets. Even better, we hit our sales targets for the second quarter after only being two weeks into the quarter. This was thanks to a large order from a company in the UK. We had done business with this company in the past, but our UK team persisted for close to two years with the customer, and ended up significantly growing the number of products we were selling the customer, as well as, growing the number of different divisions in the customer that were using our product. Out of all of our time as DecisionPoint, this is probably the best success we had experienced in the shortest timeframe. It was also at this time that our venture capital investors decided to give us another $5 million dollar investment.
With the revenue growth and the additional venture funding, we started to grow the business again. However, this time around, we were a lot smarter in how we were growing the business. We had a sales, marketing, and product plan that were in place, and our goal was to add people that would allow us to better execute that plan. Unlike other growth spurts, we weren’t heading in a lot of different directions at once. We simply wanted to execute what we were doing better and faster. It was working well as we finished the year very strong, and were able to have our first official sales reward trip for sales people that exceeded their quota for the year. It was quite a good feeling, and I was feeling like the people that we were adding to the organization were high quality. A lot of things were moving in the right direction for us, and it felt good.
Shortly after we returned from the sales trip, we realized that we were up against our first hurdle with the new management team. We were staring at our first quarter of the new year wondering where the revenue was going to come from. We had a lot of customers in our pipeline, but the question became how many of them would buy something before our first quarter would end. It became a real challenge with a lot of sweating from all of us as customers we thought would buy in the first quarter ended up holding off on their purchase until later in the year. We did manage to find a large retailer that we were able to get closed by the end of the first quarter, and it helped us make our sales target for the first quarter as the deal was quite large.
We were hopeful of the second quarter given the number of customers that had deferred their purchase from the first quarter. However, as the second quarter approached, things were not looking good. Again, there were a lot of customers in the pipeline, but nothing that seemed imminent to be closing. As the second quarter came to a close, we missed our sales targets badly. The management team got together to come up with a plan for how to avoid that from happening again. There were some ideas that were thrown out, but we didn’t have a lot more that we could do other than close deals faster. We did offer our sales people some additional incentives, and even extended some discounts to customers. However, both of these had limited impact on our sales, and we would close the year significantly short of our sales targets.
As we were winding down the year, several employees decided that our future looked unstable, and that they were moving on to other companies. It was a difficult thing for me to accept as we had hired a lot of good people. However, the fact that they were good made them appealing to other organizations that were having more success. So, I really couldn’t blame any of them for wanting to leave. It was just a result of the situation, and there wasn’t a whole lot I, or anyone else could do about it. It is what it is as they say.
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