Navigation: | Home | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 |
Entrepreneurialism Information Click here for eBay Motors! Get 2 weeks FREE CA Anti-Virus 2007 Accept Credit Cards Get your FREE $250 Cash Card PhotoStamps

This Domain For Sale. Contact us for more information.

Go Slow to Go Fast - Why Over 80% Of High Tech Startups Fail And What To Do About It

With billions of dollars of venture capital residing down the street on Sand Hill Road, two Stanford professors are attempting to answer a fundamental question "why does it always take longer and cost more to build a hi-tech company than anyone ever expects?" For all the intellect, experience and graduate degrees in the venture capital industry, the sad truth is that 80% of venture capital investments do not pan out. While the reasons for this high attrition rate are too numerous to list here, a simple fact defines every successful investment - the company figures out how to bring in more money than it spends. The secret to solving this fundamental equation these two professors believe lies in the Sales Learning Curve.

Mark Leslie, an entrepreneur turned Stanford lecturer who took a startup company, Veritas, from nascent stages to over $1B in revenues and a recent $13.5B merger with Symantec, and Charles Holloway, the Kleiner Perkins Caufield & Byers Professor of Management at the Stanford Graduate School of Business have developed a framework, that goes a long way toward answering the question "why it always takes longer and costs more?" Leslie and Holloway call this framework the Sales Learning Curve (SLC) and believe that it will prove as powerful a construct in the high tech sector as the Manufacturing Learning Curve (MLC) was to the manufacturing sector in the early (date?). Today, manufacturers wouldn't think of running their operation without tracking the MLC because of the dramatic improvements in productivity that it offers. Similarly, Leslie and Holloway believe the SLC holds the potential to fundamentally change how high tech companies are managed and will lead to more high tech companies reaching the promised land of "positive free cashflow." Increasing the number of cashflow positive companies should lead to greater venture capital returns, more capital being allocated to the sector by LPS, more early stage company formation, more innovation, more jobs, and increased productivity.

So what is the Sales Learning Curve?

[Note to Editor -- there are 2 graphics that were stripped out when I pasted in the article into this form]

As illustrated above, the Sales Learning Curve tracks the contribution margin per sales rep (Sales Yield) against the number of customer transactions. The shape of the curve will be different for every company and every sector but the central tenant of the SLC remains constant - the "go-to-market" phase is when companies should "Go Slow to Go Fast" (which is some advice from a Nordic skiing expert that I recently received when I asked for some tips on improving my performance prior to an upcoming race - Google the phrase and you will find that triathletes, grade school teachers, executive coaches, swimmers, and karate instructors are all well aware of the Go Slow to Go Fast benefits).

Leslie and Holloway believe the "organizational learning" that occurs as sales reps interact with customers to close initial sales is crucial to the ultimate success of the organization. The classic "go-to-market" strategy involves hiring a VP of sales once the beta product is complete and then hiring as many reps as the balance sheet will allow in order to "drive revenue and get to breakeven." According to Leslie and Holloway, this strategy is doomed to failure because the company has failed to take the time to understand the shape of the SLC for its product in its market. Some reports generated over the last two years by Fenwick and West, a prominent Silicon Valley law firm, bear out their assertion. There is a consistent pattern of inflated B round valuations; the percentage of down rounds for C and later rounds is always greater than B rounds. As Leslie and Holloway state, "One inference from this is that both entrepreneurs and VC's underestimate the cost and time required to move up the SLC after completion of the Beta product. VCs and entrepreneurs often assume that the company is ready to gain market traction at this stage when in fact the company is only ready to begin the SLC learning process, which like product development stages has a somewhat indeterminate duration."

When moving from beta release to first release, Leslie and Holloway argue that only a few technically versant sales reps should be hired. These sales reps should serve as a conduit between the initial customers and the engineering team and compensated not on revenue targets but on the "organizational learnings" that are achieved. Only after enough of these "learnings" have been incorporated into subsequent releases of the product and the organization knows how to sell the product (defined as the point at which each sales rep's contribution margin is twice their fully burdened cost) does it make sense to aggressively hire additional sales reps. Leslie and Holloway posit that the SLC is immutable and can point to numerous theoretical models and concrete examples that indicate that until you have reached this pivotal point on the SLC, the capital invested in hiring additional sales reps is simply wasted.

My firm's principals have served as executives, investors, board members, and consultants to nearly 50 early stage companies in the technology sector - some successful (Microsoft) - some not. We have found consistently the go-to-market stage (more so than product development or market expansion) is where there is the highest degree of uncertainty and the greatest potential to burn through finite cash resources typically through a misallocation of sales & marketing resources. Needless to say, once we were exposed to the SLC, we immediately began working to develop the tools and constructs needed to apply the theory behind the SLC to the day-to-day operating reality of rapidly growing companies.

The last thing most CEOs and venture investors want to hear is "Go Slow" when they have a product that is out of beta testing. Having become intimately involved with the SLC and Leslie and Holloway's thinking, we are firmly convinced that is precisely what companies must do whether they are a start up launching a brand new product or an established company starting a new line of business.

When companies are pushing a product out of beta, it is not unusual for a startup to have a relatively poor handle on questions such as the following:
? What is the true Customer ROI?
? Does the company have a clear segmentation and customer focus strategy?
? Has the Sales Model been clearly defined?

Most management teams feel like they have a strong grip on these topics based on a few "high touch" initial sales, the feeling that it is time to put the "pedal to the metal." Typically, when "v1" is shipped, it is a time of rising excitement, enthusiasm and confidence within the organization. There is also an expectation from investors that with rising expenses that management is going to push to get to breakeven in the shortest time period possible. Since revenue is only generated from sales activity which is directly related to the number of sales people in the field, there is a tremendous amount of pressure to hire and deploy reps ASAP.

Unfortunately, these sales reps are frequently deployed before the product is grounded in market reality and an effective sales and marketing process has been developed. Consequently, these sales reps are unproductive, "sales activity" never turns into revenue, and precious cash is wasted at an alarming rate.

What is the alternative? Our experience, which is echoed by the SLC, has shown that taking a much different approach to sales when introducing a new product into the market can result in far more favorable out comes. At this stage, management should focus on capturing market and customer feedback rather than strictly on generating near-term revenue. The rate at which this customer feedback is acquired and assimilated into the product is critical to a company's ability to move up the SLC. Defining sales success in terms of the "amount of feedback collected from customers" influences the type of sales people hired at this stage as well as how they are compensated.

How does a company know the shape of its SLC and how to gauge its progress along it? A number of primary drivers of the SLC exist: readiness of the product, sales and marketing, product type, market structure and macro-economic conditions.

In tandem with the Venture Dynamics Group, we have developed a dynamic simulation model that estimates the SLC under different scenarios. The model helps entrepreneurs and investors model the shape of the SLC given a certain set of assumptions and then see the resulting impact on cash flow.

There are several actions an early stage business should take to apply the SLC framework that my firm, as well as Leslie and Holloway, are espousing. The following are some highlights:
? Identify and prioritize product, sales and marketing factors impacting the SLC
? Shore up gaps as well as exploit your strengths based on findings from broad customer contact and market experience.
? Engage in a regular process of analyzing how learning can be accelerated.
? Mobilize entire organization to engage with customers (engineering, product marketing, sales and finance)
? Staff and operate at the appropriate levels based on where you are on SLC.

The management team can then mobilize their entire organization towards learning and accelerate their path up the SLC. While some of the management team may believe that this process will slow the rate of revenue growth, it is important to remind them that this process is intended to accelerate the process by which companies reach the ultimate corporate goal, cash flow positive.

Though it can seem counterintuitive to slow down the go-go energy upon initial product delivery, a well-grounded approach that keeps the SLC principles in mind will end up being the fastest path to rapid market penetration and sales growth. This will ensure you avoid the old saying, "haste makes waste" while giving your team and investors the kind of financial return you desire.

If you would like to see a complete SLC presentation given by Mark Leslie at a recent event, go to

Dave Chase is a partner with Altus Alliance, which specializes in driving revenue traction for emerging businesses. He publishes a blog entitled Chase Market Velocity that focuses on how emerging businesses can gain market traction via the Enterprise Sales Learning Curve principles espoused by Mark Leslie. Before joining Altus Alliance, Chase spent nearly 20 years in the industry with over a dozen years at Microsoft in various senior marketing and general management roles, including his role as MSN's managing director for industry marketing and relations. In that capacity, he was responsible for MSN taking a leadership role within the Interactive Marketing industry to grow Online's share of the overall ad market in concert with AOL, CNET, Yahoo!, Google and other market leaders. Chase played leadership roles in launching several new businesses within Microsoft including Microsoft's entry into the enterprise software and server business which is now an $8B business. He was integral in Microsoft's entry into Internet businesses that achieved both critical and financial success.

Business:Entrepreneurialism Articles from
12/24/2021 04:03 PM
How to Maintain Business Momentum
Not all goals are equal. The secret lies in setting a goal that will motivate versus one which will defeat you.
12/21/2021 09:19 AM
How Do Business Owners Stay Focused?
Many entrepreneurs think their biggest problem is finding funding. But what those entrepreneurs forget is the demon of distraction.
12/20/2021 06:01 AM
How Do You Embrace a Growth Mindset?
People with a growth mindset believe they can grow. And if you want to succeed as an entrepreneur, a growth mindset is what you need.
12/20/2021 06:00 AM
Affiliate Marketing Secrets - What I Wish I Knew Before!
The so called affiliate marketing secrets are really just things that some affiliates know and others don't. I wasted years as an affiliate making many mistakes which I could have avoided if I had have know better! Here I share some of the "secrets" I wish I had known about before I started on the affiliate journey!
12/20/2021 06:00 AM
Autopilot Money Making System - How To Create One
Is it really possible to create an autopilot money making system which runs completely hands free? Since the early 2000's I became fascinated with the idea of generating an income completely hands free from the internet. After purchasing an eBook, I realised that automated downloadable products could allow a "hands off" income source, and be created from anywhere.
12/16/2021 09:17 AM
How Do You Evaluate the Future of Your Business?
Revisiting a business plan at the right time and adjusting the strategy can save or destroy a business. Here are 5 ways to evaluate your business and your future.
12/16/2021 09:17 AM
Affiliate Marketing Mentor - Why You Need One
An affiliate marketing mentor can help you better understand the steps needed to build a successful affiliate business and earn an income online. A mentor can also help you overcome your own limiting thinking when it comes to building an income online.
12/14/2021 10:10 AM
4 Signs That You're Losing Interest in Your Business
Only time will tell if you're really losing passion for your business. But these questions will help you know, make changes and take your business to the next level.
12/13/2021 08:47 AM
Are You Losing Interest in Your Business?
It's a fact that many people lose the passion for their work. As an entrepreneur, if you don't love what you do, pouring your heart into your business will be difficult.
12/08/2021 09:40 AM
How Do You Get Your Business Out Of a Rut?
Entrepreneurship is not for the weak! The emotional rollercoaster is full of highs and lows. And managing and motivating your team needs a consistent positive demeanor. As a result, having ways to get yourself from these lows is crucial.
12/01/2021 08:33 AM
Why Is Momentum So Important in Business?
If you lose momentum, evaluate what choices made this happen. Doing research will help you undercover the missteps that could be avoided in the future.
11/24/2021 08:59 AM
How to Stay Motivated and Excited About Your Business
As a business owner, you're building your dream. You're putting your mark in a world full of conformity. And it'll take a lot of consistent and constant motivation to move past the hard times. Use these six tips to tap into your inner power and use that motivation to build your entrepreneurial momentum.
11/18/2021 10:55 AM
How to Ignore the Haters and the Naysayers
Whenever you get distracted by naysayers, it's because you've lost focus. All you need to do is remember your goals. Remember who you are and what you want to achieve. Think about your goals and ask yourself if it's worth putting your goals on hold because of what naysayers say. Don't deny yourself the life you should live because of haters and naysayers.
11/16/2021 11:17 AM
Are Your Habits In Line With Your Business Priorities?
We all have regular practices which give us structure. These practices help us remain mentally and physically healthy, and they enable us to approach life consciously. These habits are important every time, and they're crucial in our busiest and most chaotic times.
11/15/2021 01:49 PM
Don't Focus on Being the Best, Focus on Being Unique
In a world where competition is the constant factor, it's hard to differentiate and build your own identity. It's difficult, but it is possible to be unique!
11/12/2021 10:14 AM
How to Launch Your Coaching Business
As you prepare to launch your coaching business, remember it's possible to build a successful coaching business. But you have to believe in yourself and in your idea before it becomes a reality.
11/08/2021 05:43 PM
7 Steps to Find and Retain Quality Staff
Finding and retaining quality staff whether you're hiring employees or contractors, can be a difficult task for many entrepreneurs. There are a myriad of reasons this is true. It takes a focused, strategic approach to hiring and growing your team that will help propel you and your business forward. Apply these 7 steps to find and retain quality staff.
11/08/2021 05:42 PM
How to Know If an Opportunity Is Right for Your Business
To become a successful entrepreneur, you need to know how to detect unique and good opportunities. Also you need to test and execute them more efficiently than your competitors.
10/28/2021 10:26 AM
Why Your Mindset and Beliefs Impact Your Business Success
What do the world's most successful entrepreneurs have in common apart from successful businesses? The answer is, the right mindsets. Mindset together with consistent action is the key to achieving and maintaining momentum.
10/26/2021 02:36 PM
How to Clear the Way for New and Better Business Habits
The success of your business depends on you. That means increasing your output, improving your performance, and focusing more on important things.
10/19/2021 07:20 PM
Choosing The Right Courier Company For Your Small Business
If you need to send a parcel for you or your business, then choosing your courier is very important. If your business is online, then the courier service you use to send goods may be the only human interaction your customers have with your company. Therefore, it is very important to choose smartly who will represent your company when delivering your parcels.
10/19/2021 06:20 PM
Bust These Myths About Co-Working Spaces and Start Being Productive
The more you learn about the advantages of co-working spaces, the more it sounds too good to be true. When something has been hyped up over and over again, you start to wonder what could be wrong with it. Flexible workspaces have their share of naysayers and their opinions may give you pause in patronising such establishments. However, let us help you alleviate your fears as we debunk popular myths regarding co-working spaces.
10/19/2021 06:19 PM
An Entrepreneurs Untold Story of Work in Progress
A story of how an Entrepreneur worked his way to a multi million dollar company overnight until it became to big for him to handle leading to a failed success. He has now gotten back up and is about to use this experience to create something even bigger by not making the same mistakes.
10/19/2021 05:53 PM
Article Marketing: The Marketing of the Future
As society evolves, we develop and think of new products. And as new products come to the market, we need to think of better ways to sell them.
10/15/2021 10:26 AM
4 Business Strategies You Probably Haven't Thought About
Every business should find a strategy that helps it to achieve a competitive advantage in the marketplace. This strategy should be based on the strengths and weaknesses of the firm's products/services and the position it wants to have regarding its customers.
10/13/2021 11:39 AM
4 Ways To Build Momentum In Your Business
Momentum doesn't happen by chance, and nor is it willed into existence. To achieve momentum, you need to understand its source, and then relentlessly fuel it.
10/06/2021 01:43 PM
How to Be Better at Hustling and Entrepreneurship
Success doesn't come to those who wait - it comes to those who go out and get want they want. You don't want to the person who waits for things and gets what's left by those who hustle - be a hustler yourself!
10/04/2021 09:25 AM
How Does a Business Become Scalable?
Some businesses are scalable, meaning they can grow income exponentially. Others are not open to growth, but they generate a reliable income which is not lucrative.
08/31/2021 02:45 PM
Nine Books Every Successful Entrepreneurs Has on Their Shelf
Take advantage of the best the entrepreneurial community has to offer. Whether you read each book cover to cover or just use them for reference they represent ideas and techniques that will see you through the dark days every entrepreneurs face at some point.
08/16/2021 10:16 AM
Ready to Grow? Top Positions You Need to Fill to Expand Your Business
Do you wish to reach a point where your business is ready to scale and move to the next level? Hiring crucial people will help you move quickly, while proving excellent products and great customer service.
08/04/2021 03:16 PM
6 Reasons To Start A Business During This Pandemic
This is the best time to start your dream business. This article will provide tips for you to use immediately.
08/02/2021 06:06 PM
Go Read a New Business Book a Week
Reading is essential. Go and read a business book to enrich your business.
07/23/2021 11:26 AM
How to Be an Entrepreneur With a Full Time Job
It may seem difficult seeing how you can create a successful business for yourself. In addition, having a success formula takes time.
07/15/2021 05:54 PM
What Is an Entrepreneur and What Is Entrepreneurialism
What is an entrepreneur and what is entrepreneurialism. What makes them what they are?
07/12/2021 10:52 AM
Personal Branding Strategies for Women in Business
Personal branding for women is critical for business success to build your brand. When you align your personal brand with your business brand, you're much more likely to not only connect with the right people but also turn them into raving fans. Build your business with these personal branding tips.
07/12/2021 10:51 AM
How to Increase the Value of Your Business
There are many ways to boost your sales and grow your business, no matter your budget size. However, increasing the value of your business on a tight budget can be daunting.
07/09/2021 11:08 AM
Innovative Business Shares Tips
Innovative businesses are showing the road map to success: have a real connection to their customers, be proactive for the environment, show support for local social causes and events, and concentrate on providing a great service/product while building a strong networking system. It is the only way to survive in this "new normal".
07/01/2021 11:19 AM
What to Do in a Creative Dry Spell
While most creatives can't get away with allowing a dry spell to keep going on indefinitely, you can get out of the dry spell simply by trying these ideas. Often, just stopping the internal pressure you have on yourself can unleash your creativity again.
06/29/2021 05:38 PM
Top 3 Ways You Can Generate Ideas for a New Business
1. Start a Business that evolves around your innate ability. Innate abilities help you do things with ease. Often times I hear people say, "what do you have flair for?" Innate abilities help you do things better, quickly and 'naturally' than others. It helps you do things effortlessly!
06/28/2021 07:29 PM
How to Train Your Brain for Maximum Creativity
Training your brain to be more creative, to be creative on demand, and to be creative in more than one way is within your power and control. When you find something that works for you to unleash your creativity, use it.
06/01/2021 08:49 AM
How to Create an Innovative Mindset
In general terms, a traditional business mindset is always looking to improve the quality of products, services and processes. On the other end of the spectrum, an innovative mindset issues mandates for new and better ways to do business.
05/27/2021 01:14 PM
How Can Growth Mindset Lead to Success?
How do people create and grow a mindset strategy? Here are some practical tips that will show you exactly how to get started.
05/07/2021 09:30 AM
Why Becoming an Author Boosts Credibility
When you author a book that is well received by your audience, it's really an automatic boost to your credibility. The book gets press, which means you get press, and the snowball effect happens.
05/04/2021 10:31 AM
Online Working Capital - Fast But Expensive
Small business owners often need working capital to cover expense incurred to make or create their product or service before payment comes in. Banks are loath to lend to small business owners especially the small amounts that the business owners usually need. Many online working capital lenders have been created to serve this underserved market.
04/26/2021 08:41 AM
When Impatience Can Lead to Business Success... Or Failure
As an entrepreneur, have you ever asked yourself "Why am I not reaching the level of success I was promised?". It could be because a lot of entrepreneurs fall victim to impatience to succeed.
04/20/2021 11:35 AM
What Is the Best Online Business You Can Start?
Starting an online business is a great way to create a lifestyle that you enjoy living. But, you must be realistic as you develop your business.
04/11/2021 02:42 PM
Looking to Build Your Network? Please Avoid This 1 Mistake
Networking isn't just about meeting new individuals. It's also about you maintain connections. Ignoring the current connections of your professional network because you're excessively focused on development is a big blunder. Don't just consider about meeting and getting to know new professional contacts. Don't fail to remember to keep up with the people you by now know.
04/11/2021 02:39 PM
How to Face Your Fears and Get More Business Leads
What fear do you have lurking inside of you, preventing you from enjoying life, or creating a successful business for that matter? When it comes to our business, fear can definitely stop us in our tracks, preventing us from moving forward and achieving our goals.
04/06/2021 11:39 AM
A Realistic View of Being Self-Employed
If you are thinking about becoming an entrepreneur, you'll want to know all about your field, your products and your customers... but you'll NEED to know about running a business. It is important for business owners to realize all the hidden areas that eat up a surprising amount of time and energy behind the scenes in running a business.
04/06/2021 11:33 AM
Business in a Slump? 13 Ways to Get Your Motivation Back
Truth be told, it's a fact of life for every entrepreneur and business owner... we are going to get into a rut every once in a while. We're human after all! The good news is that this slump can be very temporary... if you choose it to be. Here is a list of things you can explore the next time you feel this lack of motivation sweep over you.

home | site map | contact us