At DecisionPoint, I often describe our evolution as a company in the form of management regimes. When I use the term regime, I talk about the management team. Generally, in any company, when a CEO is hired, they will more than likely bring in people that they have worked with before at other companies, and that they also trust. Trust is an especially important trait as you want to make sure that when it comes time to make tough decisions, you are working with the people that you trust will help you make the right decision.
I experienced four different management regimes at DecisionPoint, each with its own “personality”. In other words, there were four different CEO’s that I worked for, each of which brought in their own set of management team members based on past work experiences and relationships. While regimes can provide a consistency from a management team perspective, there is also a pitfall associated with a regime. In this chapter of the book, I will describe each regime, but then follow it up with what I consider to be the pitfall to the regime concept.
Our first regime at DecisionPoint was what I called the “Teradata Regime”. Our first CEO was an ex-Teradata employee, and when he was brought on board as our CEO, he proceeded to hire a VP of Sales, a VP of Marketing, and several other non-management personnel that were either people he worked with directly or indirectly at Teradata. In some respects, what the first CEO wanted to do was to bring the positive traits he experienced at Teradata to DecisionPoint. Under the “Teradata Regime”, there was a good understanding of our product as both Teradata and DecisionPoint were suppliers of data warehouse solutions. However, in the world of Teradata, hardware and software were bundled, and in the world of DecisionPoint, we were focused solely on software. So, some of the things that the “Teradata Regime” wanted to implement did not apply to what we did at DecisionPoint as those things were more related to how you sell bundled hardware and software versus a pure software solution.
Our second regime at DecisionPoint was what I called the “Sequent Regime”. Our second CEO was an ex-Sequent employee. Initially, the main employees that came from Sequent were the team he inherited (i.e. the engineer and sales teams that were spun out of Sequent). The one thing that the second CEO initially did, which was good, was he understood our product was software, and began looking for sales people that sold software rather than try and convert hardware sales reps from Sequent into software sales people. However, as the second CEO began to build the headquarters staff at DecisionPoint (i.e. marketing, professional services, etc.), he tapped into his network of people he had worked with at Sequent. From a marketing and professional services perspective, Sequent understood data warehousing and the separation between hardware and software. However, all of Sequent’s data warehouse experience was based on professional services people building custom data warehouses specific to each customer where as DecisionPoint was providing a packaged data warehouse environment. What happened over time is that our product became less packaged, and our staff of professional services people grew significantly. A lot of the customers ended up spending more money on the professional services than they did on the software, and that was contrary to what our goals were at the corporate level.
Our third regime at DecisionPoint was what I called the “Brio Regime”. Our third CEO was the founder of Brio, but no longer part of Brio. Like the other CEO’s, he brought on board a lot of ex-Brio people. Brio provided an end user tool that made data easier to access. DecisionPoint’s product was based on building a robust set of data and infrastructure, not on the tools the end user uses to access the data. The folks that came from Brio were intensely focused on the tool that users used to access the data versus the content of the data. Through the “Brio Regime”, DecisionPoint spent a significant amount of money making a robust tool that was integrated with the data warehouse environment, and provided an easy environment for end users to access data in the data warehouse. Unfortunately, we lost focus on our core value (robust data warehouse environment), and spent a lot of engineering time and money on tools that were good, but not really part of the core value of our product offering.
The fourth and final regime was what I called the “Informatica Regime”. Our fourth CEO was and ex-Informatica employee, and was someone that was introduced to us via the venture capitalist that provided us one of our rounds of funding. The fourth CEO did not immediately replace the existing management team with ex-Informatica people that he had worked with. However, over time, our VP of Sales, our VP of Marketing, and several sales people were ex-Informatica people. From a data warehousing perspective, our fourth CEO understood our value proposition from a data warehouse solution perspective very well. What we were doing with our products matched something he was trying to do at Informatica. However, Informatica was an infrastructure (i.e. ETL – extract, transform, load) company, and really understood the requirements for moving data from a variety of source systems into a data warehouse. While DecisionPoint had infrastructure components, the real value was in the type of data we provided, and how we structured that data for end users.
I will not judge what I thought were the good and bad points of each management regime. That is water under the bridge. However, the point to take away from this is the effect that regimes have on a startup. In each regime we had at DecisionPoint, they all came from the data warehousing industry, but each had a different focus within that industry. Because DecisionPoint products span many different aspects of the data warehousing industry, we had components of our product set that each regime understood really well and others they did not understand very well. Generally, each regime tended to focus on the components of the DecisionPoint products that they understood the best, rather than focusing on the overall DecisionPoint solution. This led to different sales and marketing positioning that each regime used even though the DecisionPoint product was the same across all regimes.
The good thing about regimes is that they bring valuable past experiences about what has worked for them successfully. However, the pitfall of the regime mentality is that you don’t think “out of the box” in many cases. Management regimes will often do what worked for them in the past, especially when it comes to sales and marketing. In many cases, what worked in the past does not apply to the current situation. Probably the most obvious example I have from DecisionPoint is in how our product was sold. The consistent theme across all management regimes at DecisionPoint (and is generally true in the high end software market) is to establish a high touch sales force goaled on selling a lot of software to large customers. Each regime thought that they would be the one to finally make the high touch sales model work better than the last one did. They each thought that if they worked at it a little harder (better sales reps, better training, etc.), they could crack the code for how to sell DecisionPoint products with a larger high touch sales force. None of them put any serious effort to completely rethink how the product should be sold. In the third management regime, we attempted a low end offering that would be ideal for middle and small market customers, but the sales force quickly rejected it. The bottom line is that if your sales force rejects it, they won’t sell it. Unfortunately, management at the time did not address the issue with the sales force, so the product offering died a slow, painful death.
The bottom line of the whole story and our different management regimes is that no matter what you do or who is involved, you have to be willing to try new and different things. Doing the same thing as you've done, unsuccessfully, before while working just a bit harder doesn't necessarily result in improvement. You always have to be willing to look at what you're doing, where you've been, and change course appropriately. Everyone brings valuable experience to a startup. However, if you only use that experience to do what you've done before, you're selling yourself and the startup short. Be bold, do something differently than it's ever been done before, and be confident that no matter what you do, you can adjust and move forward.
No comments:
Post a Comment