Building a $7 billion software company – How to Scale Up

BUSINESS OF SOFTWARE EUROPE

Stephen Allott

Chairman, Pebble Code

Crown Representative for Small and Medium Enterprises, Cabinet Office

Forecast

Trinity College, Cambridge

Xerox

Sun Microsystems (1st lawyer hired outside the US)

McKinsey strategyTech and corporate finance

Micromuse President, CFO and main board director. NASDAQ MUSE

Cambridge Computer Lab

Trinamo

UK Crown Rep SME

10 chairman roles

MICROMUSE TURNOVER

1

142

83

39

1963

1995 1996 1997 1998 1999 2000 2001

(£M)

“Market cap of $5.1 billion”

G-CLOUD DIGITAL MARKETPLACE SALES£m

Forecast

So ….what is the number one thing that you need to Scale Up?

OEM STRATEGY

1. Dell big: what’s the growth plan and rep deployment?2. Huawei growth plan and location of manager?3. Decide on plans for Lenovo, Intel and Cray

AMBITION

Forecast

What else do you need ….?

Forecast

ProductPlanPeopleProcessesProblem Solving

Forecast

ProductPlan build financial model, decide strategic issues,

identify optimal growth rate, how do you create a model?

PeopleProcessesProblem Solving

ANALYSE DATA BUILD MODELREFINE ASSUMPTIONS

PHASE

ACTIVITIES

- Agree financial terminology

- Establish and explain structure

- Set basic linkages

- Review model and debug

- Discuss parameters with Senior Management

- Set initial assumptions

- Review initial results with senior management

- Debug/problem solve specific issues

- Tighten and agree assumption ranges

- Benchmark against comparative companies

- Sales productivity by experience band

• Orders by rep

• Rep start and finish dates

• Senior management sales effort

- Field technical productivity

- Typical sales cycles

- Historic financials

- Historic costs per head

- Typical order profiles

- Understand growth strategy

17Jan Board Meeting►13 Jan►18 Dec► 31 Dec►

FINALISE PLAN SIGN OFF

- Further refine assumptions

- Review results with senior management

- Syndicate output to individual board members

- Secure sign-off for output

►31 Jan ►

Board Meeting

- Discussion on timing of future fund raising

Forecast

ProductPlan

People Sales, Finance, Product Mgmt, Dev ProcessesProblem Solving

S:\Trinamo Internal\TRP\Trinamo TRP Brochure 300407

Hiring great people using the “TRP” (Trinamo Recruitment Process)

TRINAMO RECRUITMENT PROCESS OVERVIEW

• Defining candidate specifications

• Creating advertisements, briefs for agencies, head-hunters or other CV sources

• Reviewing CVs and finalising a candidate shortlist

• Candidate interview process

• Compensation plan design

ANALYSING THE SCORES

8.06.38.08.37.0Average

7.086786EF

8.087898CD

7.686987AB

AverageCompany Fit

Functional CompetencyLeadershi

p

Problem SolvingInterviewe

r

Averages : a definite hire

Leadership : the greatest strength

Teamwork : good at this

Company Fit : will be an asset

Problem solving : just good enough

Functional competence : will need to learn their role

Teamwork

SALES SEMINAR DISCUSSION TOPICS REQUESTED

• Setting and reviewing the most effective sales strategy• Setting and reviewing the most effective marketing strategy• Hiring and motivating effective sales people• Partnering with bigger companies - worth it or not?• Gauging why people are or might be interested in your offering• Growing deal sizes by a factor of 10• Winning mission critical product sales as a small company• Managing big sales cycles• Understanding the sales process and customer decision making• Post sales support• Direct or channel• Customer budgets,sales forecasting, bad debt management

SALES APPROACH DEPENDS ON LIFESTAGE

Lifestage Search Focus Scale

Customer Count 0-10 10-100 100 plus

Reason for winningdeals

No one else willtouch it

Customer is sodesperate they’ll tryyou

Better, cheaper,faster

Customer Need Unique Emerging Patterns Customeracknowledged

Lead Generation Random From top 3 Areas From top area!

SALES NATURALS

• Holds situational conversations• Asks relevant and intelligent questions• Is solution focused• Targets business people• Relates product usage• Manages their manager• Empowers buyer to achieve their goals• Patient

TRADITIONAL REP

• Makes presentations• Offers opinions• Is relationship focused• Targets users• Pitches product• Needs to be managed• Attempts to sell to buyers• Impatient

Forecast

ProductPlan

PeopleProcesses targets, comp, flash

Problem Solving

Why are UK software companies underperforming?

Here’s part of the answer

SHORT TERM MANDATORY REQUIREMENTS

SHORT TERM MANDATORY REQUIREMENTS

SHORT TERM MANDATORY REQUIREMENTS

Forecast

ProductPlan

PeopleProcessesProblem Solving

THIS BIG MARKET NEEDS SOFTWARE

WHAT ARE THE ATTRACTIVE VERTICALS FOR THE COMPANY?

MARKET SIZE, $B

COMPANY SUCCESS INDEX (current revenues/market size)1.0

0.5

1.0 2.0 3.00.0

AerospaceCAE / Mfg

Weather

Federal

Defence

Invest

Harvest

Weather?

Wild card

FInanceBio Sci

SHORT TERM MANDATORY REQUIREMENTS

1. Lead generation in target verticals2. Sales and SE training3. New hire on-boarding4. Full collateral (corporate powerpoint, white papers,

vertical presentations)5. Upgrade web site6. Key OEM account plans7. Quarterly sales kickoff8. Install best practice hiring process

GEO STRATEGY – FIGURE IT OUT……

GROWTH PLAN EX INTERNET SALES

MICROMUSE TURNOVER – BRIGHT WILL BE BIGGER

1

142

83

39

1963

1995 1996 1997 1998 1999 2000 2001

(£M)

Building a $7 billion software company – How to Scale Up

BUSINESS OF SOFTWARE EUROPE

Stephen Allott

Chairman, Pebble Code

Crown Representative for Small and Medium Enterprises, Cabinet Office