We’re a week away from our next CEO Tales and have nearly sold out. If you are interested in hearing the inside track on what makes a successful sale in the TMT sector, then we suggest you get over to registration very soon:

As well as our speakers, and the well informed perspectives of our supporters: Erevena Executive Search, First Capital, Rackspace and UBS, the discussion will be driven by our attendees. Here’s who is coming so far:

What’s a trillion between friends? Cisco and GE have both published analysis of the IoT recently (see Mark’s post on GE’s report here and Cisco’s original White Paper on the topic here) which suggests the market is worth respectively $14 trillion or $15 trillion.

But those folks still waiting for their internet fridge may have a bit of a  wait yet – one outstanding feature of both reports is that they assume the immediate markets are largely industrial/B2B. Manufacturing, energy/utilities, transportation, healthcare, these are the poster boys of the IoT roll out, and the efficiency gains that connected devices allow drive the market valuations for IoT.

Behind all the noise about industrial applications, however, an increasing number of very familiar names are offering products based on connected devices. Nike (Nike Plus), Belkin (WeMo) and Phillips (Hue) all have products that improve consumer experience through internet connection. IoT functionality is very firmly on the product roadmap for nearly every  manufacturer of appliances and consumer electronics.

The most interesting piece of the jigsaw for us at BLN is the simple question: what are the great new business ideas that IoT devices will allow to fly? What will be IoT equivalent of Amazon, Google, Facebook: all business models that simply didn’t, couldn’t exist before the internet? There’s a great deal of work to be done to build those new businesses, so we’re looking forward to hearing some of the earliest entrants to the market consider how to make a successful business from IoT at the IoT13 conference in Cambridge on 27th June.

We still have some speaker slots available: if you know a company building an interesting business in the Internet of Things, we’d love to hear from you. Just drop us a line.

 

This is a guest post by Ian Gotts, Nimbus, our speaker at the next CEO Tales.

You’re an innovative and growing software vendor, I get that. You’ve got a fab new product that’s going drive dramatic benefits for enterprise customers, I get that.You’ve even got a blog to push out great customer stories now and then, I get that too.

But how do you accelerate growth without piling on expensive sales guys? And how do you make it easier for the large corporates to find you and get comfortable placing big orders with you?

ANSWER: You create relationships with the analyst community. And here’s why.

Analysts are important

Analysts have the ear of people with the purse strings. When they speak, the C-Suite listens. When a company goes out to tender for a third party product invariably an analyst will be involved in the decision making process, whether directly as a result of a consultation or indirectly through a research paper. They are able to influence not only potential customers, but they also coach and advise your potential acquirer on their product strategy including which vendors to buy.

Being included in an analyst research note is worth more than 100 blog posts, column inches in the FT/ WSJ or exhibiting at the next xyz conference. You need the analysts, whether you like it or not, to survive in both the short-term and thrive in the long term because their word carries weight. If a customer refers to an analyst for a product shortlist and you’ve never engaged with the analyst you can guarantee you’ll never make that list no matter how mind-blowingly awesome your product is.

Analyst Relations (AR) can deliver far greater short term and long term tangible benefits than any PR campaigns. Yet many vendors start engaging PR before they even consider AR.

It’s never too early

It takes time to build a relationship with the right analysts that cover your product’s area. Let’s not confuse a relationship with meeting the analyst once or twice and fire-hosing them with your product pitch. You are aiming for a relationship of mutual respect, and that takes time to develop which is why engaging as early as possible is critical for survival for a startup. Done well it can position a vendor ahead of the short list in product selections and gain the attention of the leaders of industry, the media, and the competition. Poor (or no) analyst relations can result in your product being ignored by potential clients and it may limit your penetration in your existing clients

Being spotted by an analyst early on is major kudos for a small company but also for the analyst because they love to be the one who discovered a cool new vendors and write about them. And it’s also their opportunity to help you out and form part of your success. Analysts are no different from anyone else, they love being part of the action and have an ego to fuel. And again, it can’t be stressed enough, if they don’t know you neither will their clients when they ask about the market.

But they are expensive and we don’t have the time!

Certainly there are costs with engaging with analysts. Most charge an annual fee to be a client and have access to the analysts and research. But don’t think that you can buy your way to the top of a Magic Quadrant or Wave, or into the minds of the analysts. Or that paying for one or two consulting engagements with the analysts will do it. Think relationship, not prostitution.

Often it is the amount of money that vendors perceive they have to spend which stops them building a relationship with the analysts. The issue is most vendors spend too much money in the wrong places. It doesn’t have to be that way. And apart from the hefty fees they ask you to sign up for there’s also the potential overhead of someone in an Analyst Relations role. Traditionally this is a new, fairly junior hire or it is outsourced to a PR/AR agency. Both of these lead to the wrong relationship being developed with the analysts, but it is a very common mistake.

Analysts need to be briefed on product functionality, but they are far more interested in customer stories. However, meeting or calls with analysts, understanding their needs and providing the information they need in the format that they want can be time consuming. They often feel like they are more difficult to deal with than clients. But they can afford to be as their influence and value is so much greater than even your best client.

What is required is a carefully crafted strategy and deep understanding of what drives analysts and how they operate. It also needs someone who has the ability and gravitas to engage them as peers and forge that professional relationship your company and product deserves. It’s not about booking appointments or grovelling for time. It is the role of a senior exec or founder who inevitably has other priorities – company operation, client sales or product strategy.

So how do I make this work?

Few senior executives have engaged with analysts or developed an effective analyst strategy. And with conflicting priorities they do not have the time or luxury to learn. But companies readily hire a Non Exec Director to add an external perspective, exercising their ancient Rolodex and to sit on a board. Their brief is often financial or governance and they offer pithy advice like “if you sell more and spend less”.

A more cost effective approach is to hire a Non-Exec Director or Advisor who understands Analyst Relations and can help shape the analyst strategy, coach the senior team on the best way to engage with analysts, and act as a sounding board for decisions. They will add more value to the business as your go to market plans are meaningless without the visibility in the market that strong analyst relationships will bring.

For the price of a junior in your AR/PR firm you can bag a NED or Advisor who knows how to tango with the analysts.

In summary: Brains, not budget. And leverage the skills of others.

Ian Gotts is an author and serial technology CEO. At Nimbus, where he was founder he drove the strategic direction and growth of the company over 14 years and handled the acquisition by TIBCO Software Inc. He personally managed all analyst relations where highlights included “Gartner Cool Vendor in 2007″, “Company to watch in 2010″ and “Leader in Gartner BPM MQ in 2011″.

This post co-authored with Theo Priestley  He has written analysis on the industry and tech space in general since 2007 which isn’t long to get the notoriety and recognition he has earned. He has collaborated with and advised the large and the small, from stealth startups to industry established players, introducing new ideas and connections, adding value, industry insight, analyst relations and marketing analysis for those who ask for it.  As an independent business transformation consultant of over ten years he is closer to the real enterprise issues that keep the execs up at night and what they’re looking for to solve them.

If you would like to hear more from Ian and three other fascinating speakers, the registration link is below:

 

The world is full of enormous numbers about the Internet of Things, but creating it will rely on human relationships and a healthy ecosystem of developers and suppliers. Which is why, on June 27th,  we are running a one day forum for corporates, entrepreneurs and investors building IoT businesses.

This is not a technical conference – there are plenty of those around. Instead we will be looking at the commercial applications of IoT and how it can disrupt business models and provide new opportunities. Our aim is to build the commercial ecosystem of the IoT by getting companies to share their experiences and to meet each other, create new business opportunities and make new connections.

The speaker challenge

The day will feature corporates talking about the projects (with real world budgets) that entrepreneurial businesses can engage with, where the smart money is going and will also showcase some of the best entrepreneurial businesses in the industry.

We’ll be mixing up war stories from those that have been there and done that, among the larger brands, with panels on some of the more contentious topics and short pitching presentations from the entrepreneurial businesses using IoT technology to disrupt existing industries.

If you are doing business in the Internet of Things or if you know a  company that is doing outstanding work, then get in touch. You can find some more detail on our speaker criteria and the topics we’re looking at on the website. Join us in building one of the best business events about the Business of Things in the world.

 

Sorry…we can’t be the only team that have come back from the break with a surfeit of a) chocolate and b) bad egg related puns.

So it seems timely to share this lightning talk from Business of Software last year. It won’t help with the pun problem, but it can certainly help you deal with confectionary overload

I met a gentleman at our Digital Doers dinner on Tuesday night who is a serial entrepreneur with a couple of very successful software businesses under his belt.  I asked him about his latest business (all of two months old). What was his biggest challenge? ‘Planning for an exit.’

Now this might feel a bit like putting your baby’s name down for Eton at birth, but of course he has a point: your chances of achieving a successful exit (sale or IPO) are hugely improved if you have a few years to prepare. Ahead of our CEO Tales on April 17th, we asked FirstCapital for their top five recommended steps for companies preparing for sale:

‘1. We meet a lot of people who think “if you build it they will come”.  Sometimes that’s true, but mostly it’s not, so it’s better to be proactive if you want something to happen. Well before you expect to sell, maybe even a couple of years ahead, start making some noise with your expected buyers. Talk to the business units, develop partnerships if appropriate, beat them to important customer contracts if you can. Be visible. Make sure they know who you are.

2. Always be thinking about how you can be the market leader in a growth sector. Even if it is a niche, market leaders are more valuable and more attractive. People pay higher prices for market leaders. The old “we are 1% of a billion dollar market” is not generally very interesting.

3. Do some housekeeping. Get rid of that subsidiary which has a difficult ex-employee as a minority (but blocking) shareholder. Make sure all your customer contracts are signed and that your IP is properly protected. Develop the KPIs you need and track them effectively. Focus on operational efficiency and profitability. Above all, make it easy for your buyer to get through due diligence without giving him/her an excuse to chip an agreed price.

4. Start to get to know the advisers in your sector. They will have their fingers on the pulse of the market, and can help you understand market activity and timing. They may well offer some free advice, as well as keeping their eyes open for potential relevant acquirers.

5. And finally, be ready. In most acquisitions, the target is already known to the buyer. If you do get an inbound enquiry, even if you had not planned to launch a sale process yet, you will need to respond quickly if it looks interesting. And even if you are minded to accept, in order to keep your buyer honest and keep the pressure on, you should introduce some competition into the process. That’s usually the best way to maximise the deal.’

Hazel Moore, Chairman, FirstCapital

Of course, every sale is different so we are looking forward to seeing how our speakers at CEO Tales approached the selling challenge with their four very different businesses.

If you have questions you would like to put to them, do let us know by email or on twitter, using the hashtag #CEOTales.

We’d like to thank FirstCapital and our other supporters for the event, Erevena Executive Search, Rackspace and UBS

 

Some interesting questions from attendees at our forthcoming CEO Tales: How to sell your technology business successfully. 6-9pm, 17th April, London.

Looks like it will be an entertaining discussion. What would you like to know?

Speakers

• Martin Leuw, Clearswift (still Clearswift!)
• Wendy Tan White, Moonfruit (now hibu)
• Shirin Dehghan, Arieso (now JDSU)
• Ian Gotts, Nimbus (now TIBCO)

If you could put one question to the speakers and audience, what would it be?

• Will being in the US & Asia increase value for a mobile ad technology business
• Should I consider a trade sale to a ‘benign acquirer’ as an alternative to private equity funding?
• Do I need IP Patents to create large value
• What is the most valuable asset in a technology startup?
• How was your experience with the M&A adviser?
• What was the process you went through?
• Were there any mis-alignments in sellers interests and how did you deal with them
• Valuations for tech businesses vary widely.  Can you give some concrete examples of how valuations were settled.
• How did you become attractive to the acquirer
• Entrepreneurs sometimes have a number of start-ups on the go at once – How is this considered by a VC looking into invest into one of these companies?
• Tips to exit successfuly
• Tips to maximise exit
• How much attention to exit should technology companies pay in the first 3 years of operations?
• What is the M&A market actually doing at the moment?
• Is the UK a good place to grow a software business, if so why – or why not.
• to a speaker: what would you not compromise on when selling your business and why
• Should an entrepreneur be thinking about exit strategy from day one … or just building a great business
• What value does an investment bank bring to the table?
• Building situation to create multiple bidders
• IPO or Trade Sale?  What are the benefits and pit-falls of each option
• How much should entrepreneurs starting a new venture think about their exit?
• Which are the the more engaged VCs. European or North American for Early Stage Tech businesses
• The best way to exit to US companies (without them knowing that you are trying 🙂
• In which country shall the business be sold?
• To what extent should succession management be built in pre-sale and to what extent can the buyer be relied on to supply it?
• To what extent should succession management be built in pre-sale and to what extent can the buyer be relied on to supply it?
• What tips would the speakers have for an entrepreneur to deal with the emotional ups and downs of selling their technology business?
• What would the panel advise is the best way to leverage the exit value of a technology business?
• What was your biggest mistake in the sale of your technology business and what would you do differently next time?
• How can I find the best prospective purchaser for my company?
• Do you think that Brit/Euro investors should focus less on business models (actually making money) and more on building huge user bases like is more common in the US?
• Would you recommend using an advisor to sell your business – if so, why?
• How do you choose when is the best time to sell?
• How did you identify who you wanted to court to aquire your business and any tip on how to run the courtship
• How did you judge the time to exit your business, and when did you plan your exit stratergy
• What the pros and cons of using a Corporate finance Advisor for a relatively small transaction? How do you choose them? And what does it take to be an effective client?

Format:

• Drinks networking, panel discussion and audience Q&A, drinks networking.

We’re very grateful to our sponsors for the evening who share our interest in making networking fun and informative, Erevena Executive Search, First Capital, Rackspace and  UBS:

 

 

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