So, you have a technology product and are seeking partners to get into new markets. Your offering is easy to explain, you know what type of customer you want, why they will buy and what’s involved in selling to them.
You think big and want to partner with the largest companies in the market? After all, they do have the broadest reach and the greatest financial strength and could deliver great sales revenues for your business and really broaden your user base. Have you considered the effort, the elapsed time to decisions and ultimately the time to get to your target end-user customer who is going to pay money? Have you considered the time-to-revenue in partnering with the big guys?
Would you prefer to get decisions quickly at a strategic level, quickly get an understanding of the commercial arrangements between both parties, understand how the sales team really sell and where your product fits neatly in their clients’ businesses? Will you get this with a SAP, Oracle or any other monster size, broad product portfolio and with diversified organisations?
For faster decisions with a narrower and clearer focus on their growth strategies and a much easier task in educating their sales teams, I recommend you seek out the “Aggressive Followers” in the market.
These are the companies that want to be an SAP or an Oracle, but today they have not yet saturated their primary markets and have not yet diversified to broaden the portfolios. In SAP’s ERP market they are still organisations with up on $1B annual sales revenues.
How do you identify the Aggressive Followers in the market?
1) Look at the leaders in the following pack
In reviewing the annual sales figures of the top players in the market, you will typically see a small group of the top players being much bigger than the second group of companies. Then, well below this second group is a group of much smaller companies at various stages of development.
The “Aggressive Followers” are likely the second group or the following pack. Review the leaders in this group. This depends of course on the size and the maturity of the market.
2) Look for focused acquisitions, not broad diversification (or ‘deworsification’ as Warren Buffett might call them)
The Aggressive Follows want to be leaders, but currently are much more focussed and not over-diversified. The value in working with these organisations is that they are focussed and will be capable of faster decision making around whether your products will fit or not.
Their sales people have a much smaller and more focussed product portfolio to sell and thus will have more mind-space to include your product in their suite, as long as it fits.
3) Look for clear focus taglines - what customer need do they solve?
Their focus can be seen clearly in how they market themselves. Their horizontal, vertical and regional focus is stated clearly and can be seen in announcements and trade events. They are usually the best in their selected niche industry sectors.
4) Look for strong year-on-year revenue growth, signifying strong execution and successful solution delivery
Their ability to execute on their business plans and deliver great solutions, services and support to their markets is very clear in their year-on-year growing sales revenues. They are aggressively tackling their markets and beating back weaker competition to grow their market-share and revenues.
5) Look for regular announcements of good customer wins
Review their website news sections or press releases to find that they have a growing number of customer success announcements and are working to capitalise on each one with effective PR and promotion materials.
6) Look for Culture and signs of life, awards won, clear company leadership and a general good feel about the company and people running it – It feels like a good team effort.
Look for awards they won that may signify the company to be a performance driven and having a strong team culture. Look for announcements, conference speakers with very capable people across their organisation and not only the CEO being mentioned. This likely signifies a strong team culture or multiple leaders driving an effectively structured business strategy and plans. Review the background and expertise of key senior team members to understand what they bring to the team. This will give you a greater feel of the culture of their organisation.
The Agressive Followers want to move fast. They want to make decisions fast, both YES and NO. So they won’t waste time, theirs or yours, on what they believe doesn’t fit. They are hungry to progress, so if you can give them something to progress their plans faster or better, they will listen.
This is not to say that you shouldn’t seek partnerships with the largest companies in the markets, but just be aware of what effort it takes to secure an effective partnership and how long it may take for the big wheel to turn and deliver revenue into your organisation.
So rather than thinking of partnering with the leades in the market, you might choose to have a number of the Aggressive Follower in different markets to gain faster return on investment and spread your risks and efforts to many companies.
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