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Tips for Thriving in the Software Market

By July 29, 2010Article

Editor’s Note: We asked Tony Zingale, CEO of Jive Software and a thought leader in the “consumerprise era,” to share his lessons learned as CEO of three highly successful tech firms – Clarify, Mercury Interactive, and Jive Software.
My advice to people looking to grow companies is first and foremost to find a vibrant market – one where there’s real pain and customers (consumers or companies) are willing to spend money to solve that problem. In the software world, it better be a must-have, not a nice-to-have, solution. And in the enterprise world, where the vendor needs to monetize the software and services, the solution needs to deliver tremendous value. It needs to move the needle for the customer businesses, either from revenue/top-line point of view or from a productivity or cost-effectiveness point of view.
When I joined Jive’s board four years ago, we saw a vibrant market. I came inside as CEO in February of 2010. The company had been self-funded until 2007 and had been delivering only an external community discussion forum to Sun Microsystems and a handful of other large technology companies. But we were also using the product internally and clearly saw how it increased productivity and reduced costs. Also, when Jive took its first venture funding from Sequoia in 2007, Facebook was three years old and we realized that there was an opportunity to bring social apps to the workplace.
What we saw then and are seeing now at Jive is a desire to take the paradigm of innovation of community, collaboration, cloud and mobile in which we live our personal, social lives and embrace it in the workplace. Quite frankly, there’s been limited innovation in the workplace from an application productivity point of view for years.
Despite cloud delivery and mobility and infrastructure improvements, and the fact that the chips in computers have gotten faster and smaller, the software applications that are still running on the devices in the workplace are very old. E-mail is 45 years old, the business applications from Microsoft are ancient, CRM is 15 years old and ERP is really old.
How companies typically fail when going to market
Having spent a lot of time with venture capitalists over the years, I’ve learned that entrepreneurs are usually very good at building a technology product or capability that fills a need in the marketplace; but a lot of them break down when it comes to developing a go-to-market approach.
How are you going to market the product? What’s the target market, who’s the buyer? What’s the price point? What’s the competition? How are you going to generate awareness? How are you going to create brand appeal for what you have? How will you enable your sales channels? How are you going to hire salespeople?
My observation is that these critical strategies are often an afterthought. There’s a little too much of an “if I build it, they will come” mindset. Especially today in the consumer world, we’ve poured gasoline on that because of the advent of downloading everything for free on the Web, or “there’s an app for that.”
There’s a low hurdle – and low investment – in building something and throwing it out there on the Web and seeing if there’s some stickiness to it. In the consumer world, you can get away with focusing on the cool software because it’s not as necessary to build a sales channel or do a lot of marketing. But in the enterprise software world, the chances of success are compromised if the go-to-market approach isn’t thought out up front.
At Jive we saw the paradigm shift of a new way to get work done – and maybe also make work fun by bringing in community, collaboration, and social communication and building it into a very secure, scalable cloud or on-premise approach. Because Jive is private and nimble, and social business is all we do, we have an advantage over the traditional enterprise software companies, which now see the same opportunity of social in the workplace that we did.
We have a very experienced management team and paid a bunch of attention to our go-to-market strategy up front while building our technology platform for social business.
The art of leadership
In my opinion, the only scenario for a software CEO is building a significant, independent, stand-alone company, as measured by strong earnings growth, strong profitability, market-share dominance, leading technology, successful customers, happy employees and happy customers.
It happened that Clarify and Mercury Interactive, the two companies where I was CEO prior to Jive, were in two very hot markets and were acquired. In the event of an acquisition overture, a CEO must bring maximizing shareholder value into the equation, particularly when the company is public. But my advice to CEOs is to build a foundation for the long term. If you build the other way, planning for an acquisition, and it doesn’t come into play, you will have made a set of decisions that will affect long-term viability. Then you’ll have real problems.
Being decisive is one of the top skills in leadership, and I saw that demonstrated by three of my mentors throughout my career. I learned the importance of admitting when you’re wrong and moving on. That leadership skill of being willing to make decisions, which I learned while playing organized sports in my youth and in college, is necessary in building a team.
Communication is also a critical CEO skill. Early on, I lacked the confidence to communicate effectively. I picked up on its importance over and over again from the time I landed my first job at Intel through my years at Cadence, Clarify and Mercury. I fashioned my CEO framework, if you will, from observing the communication skills of my three mentors.
For the first five or six years of my career, Andy Grove at Intel – 27 levels above me in the organization – was a role model. He drove the company with a strategic vision, building what’s now known as the Intel culture. He managed by objectives, confronted people in a constructive way around their business strategy, and held himself accountable. He wrote about what could happen to the business and managing in advance of that, and that was a huge lesson for me.
From Jeff Miller at Intel, and later working with him again at Cadence and serving on the McAfee board with him, I learned the leadership skills of building operational excellence by demanding results and communicating early and often the good news and bad news as well as the areas needing improvement. In observing him over 30 years, I learned how to conduct myself as a business professional.
Joe Costello, whom I worked for at Cadence for 10 years, and who served on my boards at both Clarify and Mercury, taught me the art of leadership. From him I learned the importance of leading from the front, being willing to put forward the strategy and vision, and then execute against it with absolute commitment.
Joe also taught me that it’s appropriate to have fun while leading, that you have to work hard and play hard within the company’s point of view.
I also observed the value of Joe’s communicating all the time, and that was prior to the social communication technologies we have today and even in advance of widespread e-mail adoption. He demonstrated that communicating was crucial in leading from the front. There wasn’t a day as CEO at Clarify and Mercury when things were challenging that I didn’t think about how Joe would communicate in handling particularly tough situations with people or the media.
A Harvard Business Review study several years ago asked CEOs, “If you had it to do again, what would you do differently?” Nearly all of them responded that they wished they would have acted faster. They said they knew intuitively or they had the data for a decision, but they were slow to act. That goes back to my earlier comment.
If I had to choose only one piece of advice for CEOs, I’d say: be decisive. It’s okay to be wrong. Just don’t deliberate too long. Don’t let another quarter go by to see if a trend changes or if a person improves or if the competition falters. If you know it because you recognize a pattern, your intuition kicks in or your advisors or your management team tells you in one form or another, then act. Be decisive. You won’t be sorry later. If you’re wrong, you can correct it.
Yes, correcting a wrong decision can slow the time to market. But waiting to make a decision is lethal – especially in a vibrant market. I don’t think Steve Jobs ever waited.
Tony Zingale is CEO of Jive Software.

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