Execution One of the Keys for Success in Software Companies
October 7, 2009
In the first 2 blogs I discussed Strategy and Focus as 2 of the 3 keys or traits that successful entrepreneurs consistently exhibit and that OpenView as a Venture Capital firm that provides growth capital to expansion stage software companies looks for.
The third key or trait for success is Execution. The ability to execute a strategy with focus will allow you succeed when others fail. It is the execution of your company’s strategy across all operational areas of the business that will ultimately determine the degree of success you will achieve. In fact many people would say that the key to Oracle’s success versus it’s competitors was based on the company’s ability to execute day in day out better than anyone else.
Many companies have an ability to execute well in one or two operational areas of their business. But if a company wants to maximize their market opportunity and build a world class software company they will have to demonstrate superior execution across all areas of the business not just sales or development.
If Product Management or Development can’t execute you will not understand your customers needs and will deliver a product that they are unwilling to pay for, with quality that is unacceptable or a time frame that is outside the market window. If Finance or Legal are not operationally sound you will suffer from challenges around being easy to do business with or collecting cash in a meaningful time frame which will impact your ability to scale the business because of cash flow challenges. If your customer service team can’t execute then the cost of supporting your customers will be higher, their satisfaction levels will be lower, your renewal rates will decrease and your reputation will suffer in the marketplace making it harder for your sales force to be successful. It is no different than the engine in your car… if only 6 out of 8 cylinders are firing properly your performance and MPG go down.
At OpenView when we make a growth equity investment in a company we focus our business development services around helping a portfolio company improve their execution in all areas of their business. That is why OpenView labs is the largest part of the firm with principles in all operational areas that software companies need to be successful like Finance, Legal, Product Management, Development, Customer Care in addition to Marketing and Sales.
If you go back and look at Venture Capital funded software companies that achieved successful exits with superior valuations they all had an ability to execute successfully in their marketplaces. If you are looking for a partner to help you improve your execution so you can reach a successful exit OpenView can deliver.
All the best!