What is failure: the vital signs
What are the vital signs that an innovative B2B tech company may be in trouble? A deeper problem may be covered up by glimpses of success. Narrowly missing your quarterly sales target, but with big deals forecast for the end of the year does not seem to be a red flag. However, come the end of the year and none of the big deals have closed and suddenly it is panic stations. For most early stage growth companies that are constantly running on tight funding it could be terminal. It will certainly be the end of the CEOs career.
These signs should alert executives and investors to take a closer look at their strategy, go to market (GTM) and business model. For starters we have:
- Every business buyer you approach loves the solution, didn’t realize you even existed and is unable to find any serious budget.
- It is proving impossible to forecast sales closure on deals.
- You are making sales, but they are only pilots, and the larger follow-on deals are stalling and delayed. Often you have multiple pilots in a single client.
- The cost of sales is too high to be sustainable long term: the business model does not work.
- You have hired a big-hitter sales guy with a proven track record from an established big tech company, but they are not delivering.
- The analysts firms such as Gartner or Forrester don’t seem get it and there is no Magic Quadrant or Wave that you naturally fit into.
- You are struggling to recruit partners who are able to resell the solution without huge levels of support from you.
- You have high levels of professional services vs. license sales.
- The customer’s IT and procurement teams are getting involved and are now proving to be a major roadblock.
Our 25 years of research has shown that every buyer follows a universal buying process, irrespective of industry, country or market and we have distilled this process into 6 steps; IMPACT. Idea, Mentor, Position, Assess, Case, Transaction.
The buyer of your disruptive and innovative solution is the Early Adopter (Geoffrey Moore; “Crossing the Chasm”). Early Adopters talk to vendors at the Mentor stage and work with them through to Transaction. Sadly most early stage companies try to engage their buyers as though they were Early Majority, which is not until the Case stage. With disastrous results.