How a CEO Retooled His Failing Company to Sell a New Product
Arrowsight CEO Adam Aronson got his original idea from the game videos that professional-sports coaches use to review plays. He developed a technology called remote video auditing (RVA). Hospitals, meatpacking plants and fast-food restaurants now use it to reduce health risks and improve productivity.
Although it's used in more than half of the beef plants in the U.S., Aronson's technology wasn’t always so successful.
He launched the concept in the mid '90s, when he started ParentWatch. Using his service, parents were able to observe their kids in daycare from work. But when the dot-com bubble burst, Aronson had to revise his strategy.
His story involves important lessons for anyone who is trying to sell a completely new product.
1. Have a Plan B and be ready to act
When things started to go downhill, Aronson had a choice: He could take a two-thirds loss and redistribute the money to his investors. Or he could try again.
He had already been toying with the idea of using RVA in other industries and began to test it in laundromats, fast-food restaurants and care facilities for the elderly. Aronson took the idea to his largest investor and got the green light to start Arrowsight.
Acting quickly was the key to Aronson's success.
“You have to be thoughtful and analytical, but at the end of the day, you have to make decisions,” says Aronson. “If I had sat around for six months thinking about this decision, I would have been out of business.”
2. Get help
To figure out where he would launch his product first, Aronson hired business consultants. They identified the meat industry as his best bet because ownership was consolidated into a few companies that he could target. The food-safety issue made the industry a good match for the product.
Aronson's consultants had significant experience in both the management and food-safety side of the meat business. They helped him get access to plants where he could test the technology and experiment with the results.
“Instead of trying to do things on your own, find the very smartest, most experienced people that you can and inspire them to help you,” says Aronson.
3. Adopt a long-term vision
“If anybody ever intends on trying to create a new service offering or product that you’re going to sell to other companies, you need to have a long view,” he says.
Aronson spent three and a half years testing the equipment in the meat plants before he began selling the product. In fact, for the first five years, the company was only in research and development mode and made no revenue.
“We had to do a tremendous amount of hard work with a lot mistakes, a lot of going back to the drawing board,” says Aronson.
4. Put yourself out there
Arrowsight’s first big break came in 2005. Undercover videos showed workers at a beef plant prodding sick cattle onto their feet so the company could sell them by USDA rules. The scandal that ensued received a lot of media attention and led to four congressional hearings.
Aronson hired a lobbyist who arranged for him to speak at one of those hearings. As a result of the exposure, Cargill, one of the largest meat processors in the U.S., hired him.
5. Work harder after your first big customer
Even when Arrowsight landed such a large client, Aronson knew that was only the beginning. He had read a book called Crossing the Chasm, by Jeffrey Moore. In it, he learned that when you’re creating a new business category, your risk is even greater after you land the first big customer.
“Just because you’ve got the first big one doesn’t mean that any other company will follow suit," says Aronson. "Those big first-mover companies are often viewed as innovators. They test things. The marketplace doesn’t believe in a new service offering or big product until the second company goes.”
After 18 months, Arrowsight landed JBS, which is considered the world's largest meat producer.
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