The Midas Touch
We all hear about those entrepreneurs who have the “Midas touch.” We marvel at how easily they can turn ideas into what can only be described as gold mines— solid, multi-million-dollar companies that survive the turbulent business landscape time and time again.
One of these entrepreneurs is EO Tampa member Mark Swanson, CEO of Telovations, Inc., his fifth technology startup to reach the multi-million-dollar mark in annual revenues. When asked to reveal one of the secrets to his success, he advises: “Have a system in place that enables you to recognize big trends, and then find a niche in it.” This system isn’t as mysterious as one might assume. After talking with Mark, it turns out the Midas touch comes from aligning trends with emerging technologies.
In this interview, Mark touches on the not-so-secret keys to successful startups, as well as how product decisions impact the overall success of business initiatives.
EO: Is there a common denominator that you see in your companies?
MS: One common denominator would be picking the right technology to fit a market niche. It sounds simple, but a lot of business professionals miss this one. They get enthralled with cool technologies and not ones that solve real problems or have an actual business impact. If you are in the technology business, it is important to regularly meet with customers, as well as scan reading lists to identify industry trends. Also, spend time not only on the macro trends, but on what technologies are being developed that could solve emerging problems. Once you find the right technology, focus your energy on getting that “product-market fit,” and eliminate “chore” tasks so you can do “core” tasks.
EO: How do you determine whether a technology is worth your time or if it is just another fad?
MS: I ask myself one question: Is it obvious that this technology saves me time or money (or both)? Do you remember the first time you used Google? I do. Up until that point, I had been a Yahoo! user. The first time I tried searching on Google, it was immediately apparent to me that it was different and faster.
EO: How do you determine what is “core” to your business and what is simply a “chore”?
MS: This is not as simple as going through a checklist of items and marking them as one or the other. It takes a deeper analysis. Some things at face value look like chores, when they could very easily fall under the core category. Perhaps you can pick something that is a chore to others, but you make it core by picking key technologies to deliver a different value proposition.
A great example of this is when, during Telovations’ inception in 2006, we launched our hosted business phone system. Most competitors were offering this service over the Internet, as they deemed “network” as not being very core. However, we decided that we were going to build our own network and make it part of our offering. Because quality and privacy were core to our business model, we chose technologies to provide the control we needed to guarantee high levels of quality and reliability. Many of our peers in the telecom industry initially thought of this as a chore, almost as if we were unnecessarily re-inventing the wheel. We saw it differently, and it has turned out to be one of our biggest differentiators and drivers for success.
EO: So how do you know when the time is right to jump on a new technology?
MS: In my experience, getting out in front of trends and finding your niche is really the only way to effectively succeed as a startup. You’re competing against all kinds of big, well-known brands. Identifying trends before the big guys and finding your niche is your only competitive weapon as a small or medium-sized business. That said you don’t want to be too early, either.
In 1991, Geoffrey Moore wrote an excellent book titled “Crossing the Chasm.” He talked about the technology adoption life-cycle and pointed out that those innovative technologies still in their infancy are not technologies businesses should deploy. He stressed that only when those technologies have matured enough to “cross the chasm” into the early adopter phase—where enough folks have shaken out the bugs—should you take a closer jump. Asking yourself whether this technology will save time or money can help you decide if a new technology can perform a chore, so that you have more time and resources at your disposal to focus on your core.