Thursday, October 6, 2011

Mistake: Being Too Small. Solution: "Look Bigger"

This post by Scott Weiss of Andreesen Horowitz doesn't dwell on a mistake as much as recovering from one. As a tech startup selling to large enterprises, Scott's company IronPort learned that they were being disqualified from consideration because of their size alone. [This is an issue faced by B2B-focused startups everywhere.] As one prospect stated: “We like what you guys are doing but there’s no way we’d replace the aorta of our communications infrastructure with a beta box from a 20-person startup.”

So: the mistake, as Scott and his fellow leaders determined, was acting small. Now, the fascinating part: Scott goes into great detail about what they did to fix their mistake.

We felt like the little kid that kept getting turned away at the height chart at the rollercoaster—we can handle the ride, just give us a chance! Somehow, we had to find a way to look bigger and more credible quickly. After an intense brainstorming session, we hit upon a really important concept: since perception was reality, any weakness that the customer couldn’t see and couldn’t touch did not exist. By being absolutely maniacal about each of our customer touch points, we would appear to be far bigger than we were. No matter how rinky-dink the “man behind the curtain” was, it didn’t matter because the Great Oz would be massively impressive.

What IronPort did to change how they were perceived included both surface items (website design, business cards, custom faceplates for their servers) and, most profoundly, operational strategies and tactics:

All of these details mattered, but the key to the entire plan to make our little company appear big was to perform like the very best large companies. For us, this meant dramatically beefing up customer care (CC). In general and especially in high tech, CC had been a backwater—treated like a cost center to be minimized. Since this was arguably the most important early customer touch point, we took a completely opposite approach: we treated it like a marketing expense. With a firm belief that this was the primary catalyst for word of mouth, we invested heavily in the entire post-sale ecosystem. Our approach was to answer email inquiries instantly and telephone calls on the second ring with little to no hold time. We concentrated on how to deliver the best possible experience first and then went back and figured out how to cost-optimize it later
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To me, it's very instructive that customer service was the key operational area that made IronPort appear bigger than they actually were. Telling the board and investors that they needed to staff up in customer service must have been a difficult discussion. But, as Scott points out, support was the most visible aspect of their service offering to customers; therefore, it needed to be world-class if they were to be viewed that way. I have never read a better business case for excellent customer service before (and I've read a few).

There's more elaboration on all these items in Scott's entire post.

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