A great quote from a recent Sterling-Hoffman newsletter:
Angel Mehta: Why do you think the climate is so difficult for enterprise software companies, even with the economy having recovered?
Stu Schuster: For as long as I can remember, the process of growing a company has been the Geoffrey Moore, ‘Crossing the Chasm’ approach. When taking technology to market, find the innovators first who buy the technology, and then you go through the early adopters and late adopters, etc. This process, I think, all good high-tech marketers understood.
Throughout my entire career, there were always people who wanted to do something for their organizations that they believed would be a leap forward and would make a name for themselves. Call these the entrepreneurial Chief Information Officer… they were at companies like FedEx or Wal-Mart. They would try to do something with technology that would give the entire company a competitive edge.
After the technology crash, the focus became so oriented around cost-cutting that the entrepreneurial CIO was replaced with a financial CIO. There are so few entrepreneurial CIO’s out there that today everything has to be easy to implement, available by the drink, with very short time to ROI. The innovative buyer, the entrepreneurial CIO has been terminated out of the industry.
Eventually, it’ll cycle again because people will eventually feel that they’ll need a competitive advantage and will look to technology to do that. But today, it’s brutal. It’s amazing how hard it is to find people who are willing to take a chance on a new company or new technology. Fear dominates every IT department. As a result, growing an early stage software company is just harder than ever.
That’s why I place so much more emphasis on the people-side of the equation these days. It doesn’t matter how great the technology is – if the right people aren’t in place, you’ll never convince customers to take a chance.