Re-launch as Product Company
European Software & Services Company
To transform from a services firm to a software vendor my European client needed product plans, pilot customers, a U.S. presence, and new investment.
As an interim executive, I created, staffed, and led a US subsidiary company, co-authored product plans, and pitched their business plan to investors.
Spearheading deals with pilot customers and OEM partners led to us securing $6M in Series A funding.
I knew little about computational linguistics but a former colleague convinced me this was a great opportunity to help a company at a pivotal moment in its evolution. The CEO had a Ph.D. as did 45 other employees – more than half the headcount; there was no shortage of IQ in this business. Having participated in a $100 million R&D effort funded by the European Union and seeing a market opportunity, the company’s CEO was committed to a new strategy based on developing licensable software products to build the company’s long term value.
Removing Barriers to Growth:
1) Securing Additional Capital
Developing and marketing software products would require a significant capital infusion. Unrelatedly, one of the client’s major owners wanted to divest their shareholding at this time so the goal became finding a buyer for their stake who would also provide new funds. Transforming from a mainly services company to a software vendor is a major change that would be a lot easier to achieve with the help and resources of the right investors. So we sought a consortium of US and European venture capital firms with the experience and industry connections to facilitate the envisioned change and growth. I played a supporting role in securing a $6 million A Round for the new corporation from two lead investors and two others. With the new ownership and funding in place we had the platform and resources to grow.
2) Creating a US Operation
The technology may have been European but its largest market was major North American enterprises. My role evolved from strategy consulting to interim executive and I became the company’s VP of North American Operations. With the company’s attorneys I helped incorporate the US subsidiary, set up bank accounts, procured phone equipment and IT systems, and leased office space. I recruited personnel for direct and indirect sales, client implementation and support, and administration. For cost-efficiency I used outside contractors for other activities like marketing. In parallel with these setup tasks, I led the charge to sign up pilot customers and secure the LOIs required to close the A Round. We were now in business and growing.
3) Partnering for Broad Market Penetration
Direct sales of software licenses to large enterprise customers would be our major revenue stream, but this would not give us the rapid market penetration we wanted because of the length of the sales cycle involved with this type of technology and the difficulty of cost-effectively scaling the direct sales effort. To grab a significant market share we would need a successful indirect sales strategy so I recruited talent to work the channel opportunities one of which resulted in a major OEM licensing deal with a leading search engine company.