Mark Woodward grows E2open by understanding the marketplace Featured

6:37am EDT August 11, 2010

Mark Woodward is trading in-your-face sales pitches for a few extra finger exercises. That’s why, when you visit the website of E2open Inc., you’ll go three clicks in before you even see a product name.

Right away, though, you’ll learn about the broader problems E2open aims to solve with its cloud-based supply chain management solutions that enable visibility, collaboration and control across large trading partner networks.

“Where many companies fall down is … [they] get really hung up with the details of their products and get enamored with the widget they’ve created,” says Woodward, president and CEO. “They go out and they try to sell the widget, as opposed to the business benefits of what that widget does for you. Where companies go from being marginally successful to really successful is when they change the focus from the product they’re selling to the problems that they’re solving.”

By getting his 300 employees into that mindset, Woodward led E2open to record revenue in fiscal 2010, up 20 percent from fiscal 2009. 

Smart Business spoke with Woodward about shifting your focus from vitamins to aspirin.

What are the keys to growing a company?

One is just focus. You need to understand what it is you’re going to do and also be pretty focused on what you’re not going to do.

Something that we’ve done at E2open really well is understanding what the value proposition is for the customer, making sure that they understand the benefit. Before we go launching a lot of time and effort and resources behind pursuing an opportunity, we really put a lot of time and effort into qualifying that opportunity and making sure there is a business case. Make sure that you’re focusing your limited resources on the opportunities that are the highest probability to close.

A lot of people get really hung up on putting a little too much emphasis behind having a really fancy growth strategy. But if you’re really focused on growth, it’s really understanding the market you’re in, who you’re selling to, what your value proposition is and then just putting all your resources behind making that happen.

How do you gain an understanding of the marketplace?

It’s through analysts, basic research and then talking to your customers.

Sometimes companies get caught up in thinking they know better and they know the problems that need to be solved without really doing very good market research or without talking to their customers enough. It’s really important to understand not what you think your customers want but really knowing that by having those conversations with your customers.

We’ll just start off with very open-ended questions like, ‘What are your problems?’ Not even asking about our particular area but just very high-level, top-of-mind: ‘What are you thinking about? What keeps you up at night? What are your greatest challenges?’

And then, based on that, start to bore in and even ask, ‘What vendors do you look to for solving those kinds of problems?’ As you get answers, get a little more specific. Customers are usually very open to telling you about other vendors they’re working with or problems that no one has solved for them yet. That can actually help in your product strategy, as well. I’ve learned about a number of really interesting new areas, things that we didn’t even get from analysts, just purely off of customers telling us about shortcomings they had with other vendors. So the customers give you a more real-world perspective, not just the marketing spin that the analysts are hearing.

How do you position yourself to meet those needs?

You have to be careful so it’s not looked at as the sales guy looking for a sale. It’s multiple meetings with different people. That highest level meeting might be with myself or a chief technology officer or possibly head of marketing; basically, you’re just in there information-gathering.

Then if you think there’s specific opportunity for the company, you’ll follow up — maybe myself, but probably with the head of worldwide sales — where we start to bring in people that are more on the solution side of the business.

Customers don’t mind you selling to them if you have a solution. But there does need to be a separation between the process of information-gathering for purposes that are not specifically related to a sales process, and then the sales process itself.

How do you decide which needs you’re capable of meeting?

I would bring it back to [the executive staff] and say, ‘Here’s what we have found,’ and just open discussion up to the whole group, which will typically then lead to some assignments of tasks. We’re going to say, ‘OK, we need to now go prove out these two things. So you, vice president of marketing, go talk to XYZ analysts and ask their opinion on this. And you, head of my deployment services, go talk to three other customers and tell them what our point of view is on this and get their feedback on that.’

Then, based on that, we may make the determination, ‘OK, we now need to make a change in our product strategy,’ or, ‘In the upcoming releases of our products, we need to start moving in this kind of a direction,’ or, ‘We should go look at an acquisition in this particular area because it would take us way too long to develop ourselves into that space.’

What makes an opportunity attractive?

One way that I put it — I’ve thought about it this way for a long time — is, ‘Are you selling aspirin or are you selling vitamins? Is this something that really fixes a pain, or is it something that just makes somebody feel a little bit better?’ That’s an acid test for me.

I want to be selling aspirin, not vitamins, because when people don’t have money, you can do without your vitamins. But if you’ve got a really bad headache, you’re going to pay a lot of money for those aspirin. So that’s a way that I look at these kinds of things: ‘Are we truly solving a problem where our customers feel real pain, where they have a real need that they are going to pay money for? What is the business case justification for that customer?’

If you can’t find that business case, no matter how great you think it is, they’re not going to buy it.

Understand … the pain points and then what that means in terms of dollars. So you have this problem where you don’t have visibility into your inventory on the customer side. What does that mean to you?

‘Well, that means that we have to ship an extra $10 million in products and put them in these different locations just to make sure that we don’t run out. But if we had visibility, that would allow us to put the inventory there only when we needed it. Then instead of having $10 million in inventory, we could have $1 million in inventory.’

So if I could solve that problem for you and I could save you $10 million a year, it’s almost like you don’t even have to ask the question, ‘If I could save you $10 million dollars a year, would you pay me $1 million?’ It’s obvious.

How do you prioritize opportunities?

Sometimes we will create a matrix. … First prioritizing pain points of the customer — low, medium, high, in terms of … how important of a problem is this to solve.

Then understand what is it that we’re good at and are we already talking to the people that we would sell that to. Then it’s understanding: What is your capability in terms of product distribution? At least for us, we want to be selling more stuff to the same buyer. We don’t want to have to have a different sales force or a whole different sales process or whole different set of relationships to sell something else. So it’s understanding: Who is the buyer, and is it the same person that we’re already talking to?

And then what would it take for us to get this thing to market? What’s the level of effort?

You’re going to have to go put all those things together, and you get input from everybody. You’ll be getting input from marketing, from sales, from R&D and from our chief technology officer, and just go through this vetting process.

You need to tell people outright that you want their honest, complete, unfiltered feedback. And then when you get it, you can’t smack them for doing it. You’ve got to make them feel like there’s a safe environment to do that. Once people give open and honest feedback, you’ve got to make them feel good about that input. It doesn’t mean you’re going to use it.

Hopefully, you ultimately get to a point in conversation where you have general consensus. But if you don’t, everyone can understand at some point a decision’s going to be made. … Then we have to move forward and execute.

How to reach: E2open Inc., (650) 645-6500 or www.e2open.com