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November 12, 2008

Focusing On Revenue

Focusing On Revenue

Mark Larosa

Techdirt

Summary

The collapse of the market will bring the focus back to  where it should be revenue .  And that is good news for salespeople.  Why

The collapse of the market will bring the focus back to where it should be revenue.  And that is good news for salespeople.  Why?  Because companies have drifted away from being sales driven, sales focused revenue machines into ones that focus on building features that generate and create buzz.

Sales and revenue are going to come front and center once again, and the customers and prospects that pay will once again drive product design and direction - not exclusively the product managers and marketing team.

What was sexy last year was how much traffic you could generate, where your product was discussed, and how futuristic your idea was.

What will be sexy in 2009 is how you've turned that into cash. And who is going to make that a reality?  The sales team!

Those of us that know how to jump start sales in a startup and drive big dollar transactions are the key to the small businesses that want to survive.  This is in no way a slam to the FREE model as promoted by Chris Anderson.  After all, I work for a company right now that promotes a free product.

However, we've had a plan since day one on how to generate revenue from our free product, and it is already starting to be realized and we are on our way to profitability - almost guaranteed to be realized in 2009.  So its not a question of where your revenue comes from - but making sure that there is revenue - and that the revenue goal is realistic to support your business.

If you are to become a truly revenue-driven company, it sometimes means building features and services your customers want that perhaps are not the most sexy or most fun to build, but they are features that can be sold.

When I founded and ran Dynamic Mobile Data, my main product was a desktop application, as it was developed before web sites existed (man I'm old). As the web evolved, my product team kept insisting that we needed to move our entire product to the web.  I resisted.  Why?  Because when I looked at my customer base and my prospects, I realized that my software was mostly installed on machines that ONLY ran my software.  It was what they used all day long and having this computer running a browser and my software offered them nothing additional.  My customers were willing to pay for other technologies including dynamic mapping, alerts, driving directions for delivery personnel, etc.  So, my resources went there.  It was a few years before I had fully integrated the web into my product - and even then it was not as sexy as what was out there.  But guess what all that time we made a lot of sales and a lot of revenue!

In my second post, I talk about how to do this.  Companies need to focus on designing and motivating sales teams correctly:

The bottom line for all start-ups is that this next year its all about generating your own cash.  Funding will not be nonexistent, but it will be very hard to find especially without a properly designed plan to revenue.  Make sure that sales teams have the right message, pitch, and motivation to ensure the best chance of success.