Guest Column | August 10, 2018

How Successful Tech Companies Become, Well, Successful

A conversation with Charles Foley, Talon Storage

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Charles Foley, senior vice president at Talon Storage, is a seasoned high-tech executive with experience in enterprise computing, storage and storage networking, and software. A board member for both public and private companies, Charles has experience building and growing dynamic, fast-moving teams in the high-tech industry including fundraising and liquidity, strategic development, and positioning for long-term success. Charles took time to speak with Software Business Growth about how successful tech companies set themselves apart from those that struggle, as well as offers advice on outsourcing and scaling.

Q: What do successful tech companies do to set them apart from the ones that struggle to scale?

Foley: The companies that do well have a laser-like focus on a mission that meets two tests in the minds of today’s market: Is it worthwhile, and is it valuable in the minds of the buying market? Don’t get caught up in developing a product looking for a market, or thinking up something creative and determining you’ll educate the whole world so they’ll buy into your vision — that takes way too much money.

Fast leaders determine exactly what it is they want to do and why that’s important to the market. They not only define the solution in their own minds (which brings clarity of focus), but they translate that quickly in the mind of the buyer (which brings clarity of value). They crisply outline the logic of why this is better than the status quo (or any alternatives). Then, they paint the picture of the end-result of the vision — what the world will look like once this is implemented.

SHORT ANSWER: Don’t spend resources trying to educate the market to buy into your vision, tell them how you’re enabling their vision instead.

Q: What do software companies get wrong when trying to scale?

Foley: The single most deadly trap a young software company can fall into is lack of focus. This will drain resources, damage quality, erode the message, and dilute the value proposition. When you’re a young software company you’re like one sub with three torpedoes and lots of stuff to blow up — so you need to prioritize wisely.

Sure, the ability to change and adapt is necessary to survive but the ability to prioritize and ride out brief storms without being blown off course is necessary to thrive. As you drive down the path to success, there will be boulders in your way, as well as rocks, as well as pebbles. Spend the time/effort to move the boulders and ride out the rocks/pebbles until you’re sure the path is clear. Stay calm and always analyze the latest winds of change, asking, “Do we really need to respond to this right now?”

Q: What is your advice when it comes to outsourcing?

Foley: Outsourcing is a double-edged sword (many of my colleagues in that industry are getting really upset at me right now). In my experience, you never want to outsource your “core value.” If you come up with a great idea/architecture, you have to implement that with your own team so that you own both the intellectual property and the intellectual capital from whence it sprang.

However, that doesn’t mean outsourcing isn’t a great tool. In order to make outsourcing work well, categorize the work by its intrinsic value to the company. That which isn’t core, such as documentation, testing, UI work, etc. can be done externally if you find the right team. But please note: Outsourcing isn’t a panacea — the rate card may be attractive but you need to be extremely concerned with quality and turnover. Some areas of the world have extremely high turnover simply as a part of the culture or business climate and each time a team member needs to be replaced, you face a new training curve which impacts both quality and schedules. You have to add that implied cost to the hourly rate to get a clearer picture.

Q: What other advice do you have when it comes to scaling a software company?

Foley: You need to have key principles that you live by and every one of your employees should know them. Some of the key tenets that have served companies I work with well are:

  • Protect the king … and cash is king: There is no reason to spend money on something unless the value can be defined. Want to do a trade show? Define what value you’re looking for out of it. Want to travel to meet with potential customers for future product feedback? Define the value you’re looking for out of it. Want to attend an industry conference? Define the value you’re looking for out of it. Until you’re generating cash, you need to be able to define the value you’re getting out of each investment you make.
  • Take care of the downside, and the upside will take care of itself: Too many starry-eyed, young companies run after opportunity as if they’re a cat chasing butterflies and not realizing there are wolves lying in wait in the grass. There are many potential risks — from a cash standpoint, a legal standpoint, a resource standpoint, etc. — so make sure you’re good at identifying them. This doesn’t mean don’t chase opportunities, or take risks; in fact it’s the opposite. If you become good at identifying and cataloging risk, you can put processes in place to mitigate them freeing yourself up to pursue opportunities with even more vigor.
  • The world is made up of people: Don’t forget your employees, your customers, or your partners. I’ve never seen a great company made by one person, I don’t care who it is. If you want to achieve great things, your people are going to have to want to go along for the ride and make it happen. If you want early adopter customers, they are going to have to want to do business with you, and to see you succeed. If you want others to sell your product and introduce you into their customer bases, they’ll have to trust you with their reputation. Integrity and professionalism are everything and, in the long run, they’ll buy you as much value as your technology.