Strategy Change: Make Money

In my conversations with a number of CEOs of small tech and communications companies, one thing has become clear. The market for exiting businesses has become tougher. This is common sense and the added challenge is with today’s stock market valuations, there are thousands of bargains out there. This just means the odds of a start-up or existing concern getting picked up at significant valuations has been considerably decreased.

There are a number of company heads who have recently come to the conclusion that while hoping for an acquisition by Google, Cisco and others they need to simultaneously work on getting customers.

For most logical and sane people in any other market, this is business as usual. For some reason, in tech, you can have an interesting technology, have almost no customers (or focus on getting them) and get purchased for a nice valuation.

It is worth mentioning however that this is changing… and fast. A record number of CEOs are calling me to ask how TMC can help them with customer acquisition and branding.

There was a period of time when companies really didn’t care too much about getting customers. This is especially true of serial entrepreneurs who sold their last company before they even hired an accounts receivable clerk.

What we are seeing in this economic slowdown is that the communications market is resistant but not immune to the slow down. This means we may seem intensified competition for customers and if your company’s exit strategy has recently become questionable, it may be time to start rethinking your model and figuring out how to monetize as much as possible while waiting for that special call from Armonk, Redmond or Silicon Valley.

Oh – and one last point… Start-ups have added pressure on them because I expect a number of them to go belly-up as they run out of financing. As this happens, the remaining start-ups will become potentially toxic and customers could very well wait to purchase from them. This cycle of waiting will drive more small companies out of business.

In fact, more than once this past week, people have told me customers today would rather buy inferior technology from a well-known company than superior technology from a company they aren’t familiar with. This marks a big change in thinking and you need to be prepared for this change by focusing on getting your name out in front of potential customers more often.

I saw this very thing happen in 2001. I believe history has a good chance of repeating itself in the next 18 months.

There is one way to combat this cycle.

Come out strong. Daily press releases help and so do customer win announcements. You need deployment stories, case studies and smart but effective marketing to show strength in the market. Now, more than ever, you need to show your company is strong and will be around for the long-haul. If the news section on your website hasn’t been updated in weeks or months, potential customers could think you are about to close the doors.

The era of engineering-run companies hoping for a buy-out may not be at an end but for sure it will be hibernating for at least a few quarters or more. If you are engineering run and want to make it through this slowdown, now is the time to get the marketers involved. The engineers need to go back in the closet where they belong.

Rich Tehrani regrets the fellow-engineer bashing that took place during the writing of this article. No actual engineers were harmed during the writing of this piece.

  • Rob Adler
    October 24, 2008 at 3:36 pm

    Great post, and really useful advice. Though I am assuming that the daily press release was metaphorical. As PR person, I agree that you need to make sure that you get the word out regualrly. But credibility is even more important than frequency.
    Another audience that needs to be targeted is the venture capital and finaincial community. Sales is now a key factor in companies ability to get funding. If you are interested, check out

  • Rich Tehrani
    November 2, 2008 at 3:04 pm

    Rob, thanks for the comment. I really did not intend the frequent press release comment to be a metaphor. If you can put one out a day you are doing very well. There is immense value in being in front of the media and customers on a regular basis.
    Subconsciously, we all believe companies with more frequent releases are more stable and financially sound. I have no research to back this up but am willing to bet a large sum that research would easily confirm my feelings.

  • rey
    August 16, 2009 at 1:19 pm

    That was a excellent comment and well said.

  • Noureen
    August 24, 2009 at 9:22 am

    Companies that put out freqent and MEANINGFUL press releases are up in front. But also there are companies that they put up frequent press releases without anything is hapeening, and they are doing bad. You got to seperate the good from bad apples every single time.

  • Joshan
    September 5, 2009 at 9:21 am

    Call me and I will give you press releases every day. I don’t think ever I had read any of those press releases for any company.

  • Ben
    October 7, 2009 at 4:43 pm

    Press releases are only good for internal matters to the company and its employees. It is a moral booster, and image, nothing more, nothing less.

  • Mal
    October 14, 2009 at 12:47 am

    Daily releases only good for company investors before they go public. After they go public (if they succeed) it would only be good to only effect the value of their stock to a certain point. Not much more than that.

  • Dinle
    February 4, 2010 at 2:45 am

    Press releases are only good for internal matters to the company and its employees. It is a moral booster, and image, nothing more, nothing less.

Leave Your Comment


Share via
Copy link
Powered by Social Snap