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My most satisfying moments as a senior executive in the software industry and as a venture partner at OpenView have been watching the people I work with and mentor successfully grow within their roles, build great teams and companies and achieve amazing results.
In the past I have written blogs based on my experiences with portfolio company founders, CEOs and management teams during the operational reviews and board meetings we hold with the companies in which we invest venture capital.
We are in the middle of board season right now, and I am spending time with the portfolio companies doing retrospectives on their performances during Q4 and 2011 in total.
This week I spent 2 days with a company founder/CEO and his management team. I have worked with the team for over two years (5 quarters) and have watched them grow and mature as they have become more focused on their target market segment.
In previous operational reviews and board meetings I have sounded like a broken record when I pushed on:
- The need to focus on the right target market segment
- The need to stop doing Anything For A Buck (AFAB)
- Not all customers are equal
- It is OK to fire a customer
During the board meeting I smiled inside as the CEO discussed with the board how he turned down a contract worth $100K in annual bookings with a company because he did not feel it was a good fit for their target market. He stated that while it might have felt good to close the deal and add it to the year’s bookings number he knew he would need a case of antacids afterwards to try and make them happy.
I got a grin on my face when he discussed how the management team tiered the customer base:
- Customers who fit their target market, they could make successful and had tremendous growth potential… nutritional revenue for the company
- Customers who fit their business model, they could make successful, did not distract development and that they could be profitable with… non nutritional revenue.
- Current customers that were not a fit for their target market segment, were a distraction for the team, that with whom they would not be successful or profitable.
I got a big smile and applauded the CEO when he told me that they had already budgeted for the lost revenues for the tier 3 customers that they were going to manage out of the business because they could not make them successful as customers and the company would not be successful with them as customers.
Watching a portfolio founders/CEOs and management teams grow up is My Definition Of A Perfect Day!
All the best!
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