CRM Idol Lessons for Emerging Growth Companies
CRM Idol Judges and Founder Paul Greenberg Share Success Factors
CRM Idol offers a classic business lesson in what the most successful emerging growth technology companies do differently than their peers. CRM Idol is an unmatched and unbridled competition where smaller CRM software companies present their stuff in front of the most die-hard and diligent analysts bar none. Make no mistake, the analysts are super nice people, but that doesn't impact their job to cut through public facades and identify those emerging growth technology companies that have the muster to rise to the next level in business performance and corporate growth.
To find out what the most impressive CRM Idol candidates had in common, I reached out to the primary judges, and the founder of CRM Idol, Paul Greenberg in this CRM Idol conversation. Here are four critical success factors for entrepreneurs and business leaders to keep in mind if they aspire to achieve a market leading position.
- Good businesses start and end with good people
Good start-ups start with good engineers who build good products. But that's just the ante and in no way ensures business success. The bulk of high acceleration companies tend to have very experienced leaders, who more often than not bring significant industry experience, and who consistently apply their domain expertise to clearly articulate their value proposition and solve complex business problems. According to CRM Idol judge Laurence Buchanan, “the most impressive candidates had a very clear understanding of the business problem they were solving and often a disruptive way of solving it. Their pitch was clear, consistent and value based.” Laurence went on to share, “the finalists all punched above their weight, and the winning candidates tended to have a very strong understanding of the CRM market, where they sat and how they complimented others.”
- Innovation rules the day
All start-ups seek to create competitive advantage, but not all start-ups know what that really means. Competitive advantage is achieved when solutions are relevant, unique, measurable and preferably sustainable. As primary judge Denis Pombriant points out, in creating a unique CRM solution, many firms turn to social solutions, but the leaders look not to where social is, but where it’s going. “There is a strong social theme but the leading contenders have gone upstream from the social vendors of just a year or two ago,” Denis shared with me, and went on to say, “If you imagine a social stack as I do then at the bottom you have communications, the next level up captures data and analyzes it, the next level might act on the information that the data analysis generates. This year we see many more companies innovating around the concept of doing something with the data and doing something with social that is more than simply opening a line of communication. This is important because the communication level makes social little more than an interesting curiosity. The next levels up provide practical business value and I think the theme of this year's Idol is driving that value.”
- If you're not found, you're not relevant
I have long recommended that the companies with the best mix of the 3 P’s – People, Product and Promotion – win markets. You don't need to necessarily be the best in any one of the P’s, but miss any one and you're doomed. I've also found that entrepreneurial technology leaders often fail to recognize the criticality of the third P – Promotion. They assume if you build a great product, the business will win so they allocate the bulk of their limited budget to R&D and product development. That's naïve thinking. In fact, Paul Greenberg calls it the uber flaw and counts many engineering-oriented business founders who are overtly product focused and without recognition for the criticality of messaging and marketing. Essentially believing ‘build it and they will come.’ As Paul shares, the top business leaders and CRM Idol contestants create messaging this is clear, business (not product or features) focused and outcomes-based. CRM Idol judge Esteban Kolsky shared with me, “it was not all about technologies and data sheets, it was about how well the message and go-to-market strategy was carried out: identifying the right segment, producing the appropriate message for that segment, testing and re-testing, and using lessons learned to improve the message further. The vendors that did that well are the ones that succeeded at becoming differentiated from the crowd.” This may come as a shocker to several company founders, but the most successful technology companies spend more on promotion than they do on product development.
- Is venture capital really required?
Venture capital fuels company growth, but isn't required to build a great company. In fact, where the most successful ventures offer value is with the synergistic combination of money and advice. Company founders often feel alone. They have few independent and expert resources to call on. Venture capitalists are generally proven business practitioners that can spare entrepreneurs from making the same mistakes they’ve already made in prior ventures. For the founder that doesn't want to give up equity or control, consider assembling a board of directors that will both provide counsel when requested and push the CEO and executive team further than they may otherwise push themselves. One caution though, if you assemble expert governors, and fail to truly consider their advice, or fail to rise to your potential, they won’t stick around long.
CRM Idol is a microcosm of the CRM technology industry as well as the broader technology market place. The lessons demonstrated by the winners, as well as those that fail to achieve their potential, serve as a real world reminder and recommendation to every company founder, start-up CEO and emerging growth business leader that aspires to create the next great technology company. Those that learn from their peers will clearly traverse their business journey in an accelerated and more predictable manner.