We all know, or read about, entrepreneurs with the “Midas touch.” We marvel at how they can turn ideas into what can only be described as “gold mines” solid, multimillion-dollar companies almost as easily, we believe, as we check items off a grocery list. We console ourselves that they know a secret we don’t.
One of these entrepreneurs is Mark Swanson, the CEO of Telovations Inc., an IP communications company that was co-founded by Swanson in 2006 and is his fifth consecutive start-up company to reach the multimillion-dollar mark in annual revenue. 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 may assume. It turns out, that Midas touch comes from aligning these trends with emerging technologies.
Smart Business discussed with Swanson how technology decisions impact the overall success of business initiatives.
Is there a common denominator that you see in your previous successful companies?
One common denominator to the success of my businesses would be aligning technology to 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. As a business leader, you should regularly meet with customers as well as scan reading lists to identify trends in your industry. Spend time not only on the macro trends but on what technologies are being developed that could solve emerging problems versus fad technologies. Once you find the right technology, focus energy on getting that ‘product-market fit’ and eliminate ‘chore’ tasks so you can do ‘core’ tasks better.
How do you determine what is ‘core’ to your business versus what is just a ‘chore’?
This is not as simple as going through a checklist of items and marking them as ‘chore’ or ‘core.’ It takes a deeper analysis. Some things, at face value, look like ‘chores,’ when they really fall under the ‘core’ category. Picking unique value propositions that are core to your business and picking technologies to deliver on that is a key to success.
A great example of this was when, at Telovations’ inception in 2006, we launched our hosted business phone system. Most competitors were offering this service over the public Internet as they deemed ‘network’ as not core. We decided to build our own network and make it part of our offering. Because quality and privacy was ‘core’ to our business model, we chose technologies that provided us the control we needed to be able to guarantee high levels of quality and reliability. Many peers in the telecom industry initially thought of this as a ‘chore,’ as if we were unnecessarily reinventing the wheel, since they could use the existing public Internet. We saw it differently and it has turned out to be one of our best differentiators and a driver for success.
What do you do with all of those ‘chores’?
Successful entrepreneurs recognize that time is the most valuable commodity. To build and grow a successful business, you need to look for ways to save time and allow for scale.
This is why outsourcing has become so popular. Whatever your business is, you likely know that your time is not best spent trying to figure out why your printer won’t print or how to manage a complex PBX system. Instead, you hire an IT professional or outsource it to a specialist in that particular industry.
How do you determine whether a technology is worth your time or is just another fad?
Do you remember the first time you used Google? I do. Up until that point I had been a Yahoo user and the first time I tried searching on Google it was immediately apparent to me that it was different and it was faster. When determining whether or not a new technology is worth using or if it’s just a passing fad, I ask myself one question: ‘Is it obvious that this technology saves me time or money (or both)’?
Fast forward a dozen years to a great example of an emerging technology today that I think is not a fad: unified communications (UC). I know this because it makes me much more efficient. Before UC it was very hard for me to organize all the various mediums of communications. Now I have all of my communications like voice mail, faxes and e-mails regarding a specific customer stored in one place. With the new desktop search capabilities, it’s at my fingertips without me even having to upload it to my CRM system.
On the flip side, an example of technology today that I think might be a fad is point-to-point videophones. Although it is obvious that bringing groups together on teleconferences saves you time and money, it’s not obvious that you enhance communications or save time or money by installing the video end points.
How do you know when the time is right to jump on a new technology?
Getting out in front of trends and finding your niche is really the only way to effectively succeed as a small business. You’re competing against all kinds of businesses that are 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.
But 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 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 look. 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.’
Mark Swanson is CEO of Telovations Inc. Reach him at email@example.com.