Breathing Deeply

When we created the solution-set as it stands today, we were distinctly aware that it wasn’t going to be easy to commercialise. The problem wasn’t the product, or even the vast market for it, but the educational curve attached to using the systems well.

When you have the scale of an IBM, Microsoft, or Google, you have the resources to infuse the market with educational context, the manpower opportunity to develop the expert knowledge bases to attack multiple avenues of revenue at once, and the momentum to deliver the product concept as part of broader integrated offerings. When you consist of four bodies, you often consider it pure bliss to have enough resources to last to the next quarter and pay your individual bills. Worse than that, you can’t really hire the expertise to identify the best growth avenue, and even if you do, you usually can’t call upon a cash reserve to execute the plan.

As we researched our solution concepts, and developed the tools to deliver them, we often stopped to take some deep breaths. We asked ourselves, regularly, whether the fight was worthwhile. That the answer was consistently that it was worth the fight was surprising, given we have a spectrum in the four bodies that varies from a true altruist (he actually thinks saving people’s lives is worthwhile) to a true mercenary (who thinks life is cheap and it’s all about cash).

The problem with breathing deeply is that sometimes the air stinks.

In 2008 when we took a deep breath, we discovered the investment community had about as much interest in an actual product concept as it had in anything deemed hard. Of course, we saw how that worked out when the markets crumbled, losing billions that were invested in emptiness; and we saw how that played out in 2009, when desperate corporate bailouts were done to prevent the people who caused the problem from suffering and dragging everyone else down with them. Throughout that cycle, we noticed distinct odour of misdirected fear in the air.

In 2010, of course, there isn’t as much air around as there was in the past, apparently. Now, taking a deep breath requires the kind of faith that it takes to leap off a cliff because everyone else thought it was a good idea. The lemming effect that led the investment bankers to abortive doom (abortive, since they were largely bailed out by the small guys), seems still to be in effect.

Then again, part of the problem with our product-set is that it is a concrete product-set. It can be explained, and the explanation is scary to people who like double-digit returns on the quarter but can’t conceived an emerging market that really is one. They can’t think beyond what exists, making explaining the opportunity to the standard investment group complex. The real killer, of course, is that to accelerate adoption requires exposure, education, and massive deployment to support revenues quickly. The crux of the problem is that with most investment groups, education kills the interest, since it has no direct revenue stream according to the standard wisdom.

What is odd, is that in 2009, we became distinctly aware that the real champion of our product-set would eventually be in the technology domain. They are the only companies that seem to have any grasp of emerging markets, and because of the tool elements they have the component parts to engage the core on levels that would drive revenues indirectly until the direct market matured.

Microsoft, for example, is large enough to meld this kind of risk-management tool into their back-end services, expose its interface through SharePoint, and even link it to their web strategies. Google not only has the delivery infrastructure (the product has been a cloud application for longer than the idea of the cloud has even existed), but the broad reach to actually push this to enterprises on volume levels that would reduce the cost of entry to almost nothing.

Being the size of a flea, though, the best idea in the world has no fast uptake opportunity; and that deflects investment about the same way flea powder deflects fleas.

Amusement aside, the real challenge of 2010 is no longer about the product-set, which while dynamic and cyclically improving is a fixed value point, but about how to develop a mechanism to accelerate its introduction, such as functional pre-screening and integrated vendor management. Is it pursuing partners crazy enough to recognise the potential value of this opportunity, seeking a partner or buyer with resources, or reshaping the product and directing the knowledge we gained over the years into providing something more traditional?