Case Study:
Collaborative Software Company
Background
We started at the collaborative software company in May 2002. It was a high risk, rescue and recovery operation. The founders had established the Company as a leading brand in its market, with a few large customers. However, the Company had generated only negligible revenue in the years since its founding in 1998.
Business challenges on arrival
- Sales pipe under $1 million, with sales cycles greater than twelve months, and a new sales force
- The burn in Q2 2002 was averaging $600,000 per month, with $1.8 million in the bank
- The software product needed a major upgrade
- After years of struggle, the Company had become demoralized and disorganized
- Customer and partner relationships were damaged (sometimes badly)
- The marketing, product management, and finance functions were rudimentary
Actions taken
Lewis Stanton joined as CEO, Lisa Leight as interim VP Marketing, and Jeff Kniffin as interim CFO.
- Introduced high performance sales management
- Implemented strong financial controls
- Installed comprehensive cash management system
- Built integrated business plan across all functions and put metrics and reports in place to measure results and hold everyone accountable
- Established incentive compensation structure to drive behavior and create a performance culture
- Launched user group and utilized customer input for product enhancements
- Executed marketing campaign associated with major 2.0 release
Results
- Cash flow positive and GAAP based profitability for 2004
- Bookings of $2 million in 2002, $7 million in 2003, and $14 million (forecast) in 2004
- Product upgraded to be interoperable (12/2002) and XML-compliant (11/2003)
- Customer wins included some of the world's largest enterprises, sold in conjunction with marketing partners (IBM, SAIC, and ESRI) with whom we forged strong relationships