organic growth: the business challenges

June 11, 2008 at 12:58 pm | Posted in Business, Technology Trends | Leave a comment

In addition to technical challenges of organic growth, there are also a substantial number of business challenges to growing organically as well. Let’s look at a few of the more common ones.

New projects often require new headcount. That means more expense, which is going to eat into your margins. How are you going to justify that? Usually, the justification is something like “We’re going to do $2M in year one.” Uh huh. I’m amazed at how little work is done on the back end to map target numbers to reality. Doing diligence to map that number back to real sales will expose other problems you may encounter. Here are eight very basic questions to ask yourself when you get started looking at an organic project:

    • Who will carry the quota? If you can’t map it to real people with real quotas, your chances of success are reduced immediately.
    • Does the market need educated? Where is the marketing budget going to come from to do this?
    • Are we going to hit international markets right out of the gate? Which ones? Localization required?
    • What will it do to support costs? What’s the estimated case load? Is it 24×7 critical?
    • What were the sales in the first year of the most successful product in your company’s history, and how does that compare to your estimates of the new product? Too often we look at mature products and say, “it’ll be like that one” without realizing how hard it was to get that product moving in the first year or two.
    • What is the sales cycle going to be? Critical for evaluating “success” as you move through the early months after GA. You may want to jump the gun and call something a failure in the first quarter, but perhaps the sales cycles are closer to 120 days.
    • What’s the plan for the dev teams to handle bugs and maintenance after the first release? This is a huge problem that requires a post all it’s own.
    • Are you counting on sales coming from a bundle? Meaning, are you simply going to attach this new product to your star and let it ride its coattails? (That’s not a bad thing necessarily, but just be sure to call it out for what it really is so you can make clear expense decisions.)

      Organic growth can be great, but it is also wrought with challenges, especially when lots of attention is being focused on your already successful product lines.

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