Scaling up ‘in the tornado’

Organization:
B2B Information Provider
Challenge:
As sales took off, the client base exploded in size. How to scale delivery from a handful of corporate clients to over a thousand in just 12 months?
Action:
Built out key operational areas with scalable staff, processes, and information systems needed for order-of-magnitude growth.
Results:
Operational scaling allowed a doubling of revenue every quarter for more than a year along with increasing client satisfaction.

speedometer-inlineThere were 30 people in a single-room Manhattan office bursting at the seams. During a channel strategy project I mentioned the need to service their growing number of clients — I quickly found myself responsible for several delivery and support areas. The next year was a whirlwind ride as our client base exploded, doubling the company’s revenues every quarter resulting in a NASDAQ IPO. Ensuring operations kept pace with the rapidly growing client base felt like building an airplane while flying it — we were, as Geoffrey Moore described it, ‘in the tornado’.

Removing Barriers to Growth:

1) Unblocking the Supply Chain

The client’s revenues came from high end subscriptions sold to corporations needing highly specific content. This was an easy value proposition to sell because of the pressing need for fresh, relevant, quality content, but it was difficult to deliver because the content pool was small and our ability to match it to clients’ content requirements was still developing. Our content executives had recruited top media brands, but we struggled to receive their content because of technical difficulties in getting access to their back-end systems. The situation grew steadily worse and with IPO approaching it became critical.

At this point the content from more than 100 contracted media partners was held up in a technical and bureaucratic logjam with no end in sight. I was not responsible for content acquisition at the time nor was I authorized to do any software development, but I realized this was a time to be unorthodox because so much was at stake for the company and its shareholders. Without formal approval, I hired three gifted programmers and created a skunk works project to develop a tool to lift the content directly from partners’ servers bypassing our proprietary software package. Simultaneously, I hired multiple knowledge engineers in a budget-busting move to improve the matching of content to client needs.

Within a few weeks the logjam was broken and within a few months the backlog was gone. Our client satisfaction rose supporting our successful debut on NASDAQ.

2) Overcoming a Recruiting Crisis

Technical talent was in particularly short supply and we needed to build out core operational areas on a tight budget. We discovered that anyone properly qualified for the work would demand far more than we could pay. This presented an increasingly difficult challenge to scaling the business especially as implementing each client was taking much longer than anticipated.

The solution assumed we could function with a mainly junior technical staff. We streamlined and proceduralized as much of the implementation process as possible. Through changes in quality assurance we increased the stability of the product across OS platforms. The heart of the solution was a new recruiting strategy. We formed personal relationships with faculty at a nearby technical college and aggressively recruited career-changers with a 4.0 GPA in their one-year diploma program. We hired a dozen or so of their best and brightest by gaining a reputation as a great place to work and establish a technical career. These measures allowed us to handle the growth from 30 to 1100 plus clients over the next 18 months.

3) Build-Your-Own CRM System

Our SVP of sales counted the suits walking into the conference room: “Three… four… five… So this vendor will propose five million bucks to build our backend systems and it’ll probably end up costing twice that much”. Although I didn’t believe him at the time, he was dead on. We had an exploding client base and a myriad of issues to track, but no CRM system. Each client’s history lived in an employee’s head and cross-departmental communication was very weak. We could not afford to wait for the long overdue system. I had been in this situation several times before at other startup companies. Each time I cranked up Microsoft Access and went into hiding for a week and emerged with a basic client-server CRM system for managing customer information, contact histories, and logging of issues and configurations. Recent cloud-based solutions make the job easier.

Perfecting the app occupied my evenings and weekends for several months. It had eight tabbed forms, lots of reports, and an easy-to-use interface. It became mission critical and soon everyone wanted it on their desktop. The CTO became aware of it as it reached the 25-user mark. He became concerned about it at the 40-user mark. And he demanded control of it around the 60-user mark. The system’s popularity was its simplicity, speed, and user-driven design. Inevitably, all that disappeared when it was migrated to a behemoth RDBMS platform, but it had gotten us through a year of crazy growth so it had more than done its job. After the IPO, I left the company but heard that the multi-year CRM initiative failed to deliver in some areas and that my MS-Access CRM database had been resurrected. The little app that could.