For more than 25 years, I have been a consultant and industry analyst in the enterprise software market.
I have seen many companies come and go. Some have been lucky enough to be at the right place at the right time and have had unbelievable success.
Some of these companies have survived to this day. Other companies could not sustain that luck and have vanished.
In my newly published book, “Smart or Lucky? How Technology Leaders Have Turned Chance into Success,” I have analyzed what makes the difference between companies that turned their luck into sustainable success and those that failed.
Many of the 25 or so companies in the book are companies that I worked with or analyzed while they were emerging.
I was privileged to have a front-row seat within a very dynamic industry.
I have concluded that there are some key lessons and rules that are common across most of these companies – and many others in software. So, I have come up with my 10 rules for success in software.
Follow the pain.
Focus on the problems that your customers or prospects cannot solve right now.
It doesn’t matter if you work for an established company or an emerging one – customers always need solutions that address their most important problems.
Rule Two. Know when and how to listen.
Listening to the market, your customers, your prospects and your own team, can mean the difference between success and failure. However, listening too closely can also be risky. Make sure that you are not listening to the wrong voices.
A few customers or prospects can give you a laundry list of functions that they would like to see your new product perform. Are these customer requirements widespread enough to help you sustain leadership?
Listening to the wrong advice can cause you to focus on tactics, rather than on new opportunities.
Emerging markets are always evolving.
If a technology requirement has already become mainstream, it may be too late for you to have a major impact. But, if you listen actively, you may be able to anticipate the future ahead of other market players.
Rule Three. Don’t rest on your laurels. You are not guaranteed future success just because you are currently the market leader.
It is never wise to assume that the past is a predictor of the future. The best companies are always looking ahead.
A good technology market is never mature. It is always evolving.
If the market you have been selling your products in is stagnant, it is time to change your approach.
Rule Four. Study your market carefully.
Technology businesses tend to get consumed by internal issues like planning the launch of a product, opening sales offices, or working with potential partners.
While these day-to-day business issues are extremely important, don’t lose sight of what’s really important: how your market is changing. You need to pay attention to what competitors are doing, what new players are entering the market and what they are offering.
Learn from the tactics and strategies of your competitors.
You are at most risk when you first begin to gain market traction.
When your company seems to come out of nowhere and suddenly gains the attention of prospects, financial analysts, and the press, your competitors will be watching. Plan your next moves by anticipating and understanding what your competitors might do as a reaction to your success.
Rule Five. Don’t follow blindly. Emerging technology markets are exciting and there is typically a lot of venture capital available.
It is very easy for an entrepreneur to get caught up in the excitement without a well thought out plan for success.
Don’t simply rush into an emerging market with an undifferentiated product.
Many entrepreneurs who discover a technique or winning approach are unprepared for competitive pressures.
If lucky entrepreneurs with innovative products aren’t prepared, they can be easily challenged by startups and aggressive market leaders.
Successful entrepreneurs focus on creating sustainable companies rather than on hitting a quick jackpot.
Rule Six. Build relationships as diligently as you build technology.
In an exciting, emerging market, you need all the friends you can get. There are a number of benefits that result from building relationships with important market influencers. Take the advice of successful leaders and learn from their successes and failures.
Build relationships with important corporate leaders, press, analysts, bloggers, and social networkers are imperative in building a strong brand.
This isn’t a one-time proposition. Building relationship takes time and effort.
Rule Seven. Focus on the value of technology to your customers, not on the pure value of your technology.
Even the most brilliant technology platform can fade away if it doesn’t practically focus on customer needs.
If you find that all of your discussions with your leadership team are about the technology, you may be losing sight of the big picture – what your customers need and how you can get to revenue growth and business sustainability.
Rule Eight. Be prepared for perpetual change.
The only certainty in expanding technology markets is that they will change.
Therefore, even if your company has been lucky enough to emerge as an early leader, be prepared for new technology innovations, new competitors, and changing market conditions. The companies that fail are the ones that fail to react to new conditions.
Embrace startups and their innovation.If you are lucky enough to have made it through the startup phase and smart enough to become a player in an important emerging market, this is the time to look to new, emerging startups. Most companies in this position view these startups as competitors. However, always be prepared to partner with emerging companies that may help you sustain your luck.
Apply knowledge to new markets in inventive ways.
No technology emerging out of nowhere – great technology ideas sometimes need decades before they are mature enough to succeed.
In addition, there may be an important technology used extensively in one market that can help transform a completely different market. Therefore, if you are building a new startup, you can gain competitive advantage by applying a great technology in a completely different way.
Click here for more information on the book.
Judith Hurwitz is president and CEO of Hurwitz & Associates, Inc., a strategy consulting and research firm focused on the business value of emerging computing technologies. She has written five books including “Smart or Lucky? How Technology Leaders Turn Chance into Success” and four books in the Dummies series on topics including cloud computing, service orientation, and service management.
Hurwitz holds B.S. and M.S. degrees from Boston University, serves on several advisory boards of emerging companies, and has started three consulting firms over the past 18 years.
Hurwitz was named a distinguished alumnus of Boston University’s College of Arts & Sciences in 2005 and is also a recipient of the 2005 Massachusetts Technology Leadership Council award.