Paul Landsman, Investment Director at private equity firm Livingbridge, an investor in growing software businesses, offers advice on which New Year’s resolutions software companies should be considering for their business to continue growing in an ever-congested technology marketplace.
Develop a sales and marketing function that matches your technical capabilities
Small software business owners that have developed a unique offering will often receive great initial feedback from customers and prospects, generating good word-of-mouth sales. These entrepreneurs will be blessed with technological acumen, however, great technology is not enough to build and sustain long term growth. To generate ongoing momentum, entrepreneurs should surround themselves with a great sales and marketing team to ensure exposure to and education of prospective customers.
This year, software businesses should take time to consider how they are augmenting their marketing and sales capabilities, with particular consideration towards who they should be hiring to keep them ahead of the curve. Specialist recruiters can help in this area, determining what kind of personnel a software business needs to grow to ensure they are hiring staff with the relevant experience to aid their development.
Ready your business to be cloud centric
Software businesses often choose to offer their technology on-premise, stored locally on computers or a local server, as part of an upfront licencing agreement. This approach suits many of their customers as they have full control over the software; they can administer the security controls of the product and the flow of data into and out of their networks. It removes some of the risks and delays of using a software product hosted in the cloud.
However, cloud-based software is becoming increasingly popular, offering different benefits such as the preferable economics of commodity hardware and shared infrastructure, flexible licensing contracts and the scale afforded by a cloud environment. Software businesses should be prepared to follow the preferences of their customer base if they see the industry shift towards accessing software in a cloud-based environment.
To ensure they can meet the demands of their entire customer base, an option to consider is the move to a hybrid cloud model, combining on-premise, private and public cloud hosting. This will allow them to adapt to any direction the industry moves in, whilst ensuring that they offer services in a cost-effective, convenient way for each customer.
Roadmap your international expansion
International expansion offers software businesses exciting prospects for growth and the chance to better serve existing clients. Many businesses in the industry will have identified international expansion as a priority this year, and for this to be successful, meticulous planning is required. There are a number of things to consider, including: How does the technology that your company uses enable you to scale your service? What regulations need to be complied with to expand into new target markets? How can a business ensure that it expands in a cost-effective way? Does the company have the right people internally to enable international expansion to happen?
Assessing these key factors for international expansion will ensure that the business can scale in a way that is efficient and cost-effective, without losing the levels of service that helped grow the company in the first place.
Ensure your business is GDPR ready
With the GDPR coming into play in May this year, companies that do business in the European Union are faced with the prospect of huge fines (up to 4% of turnover or a fine of up to 20 million Euros) if they cannot prevent vital corporate and customer data from falling into the wrong hands. For many software businesses, this could spell the beginning of the end for the company, hugely damaging profitability, reputation and the opportunity for growth. It is imperative that these businesses ensure software applications are secure throughout their lifecycle, with data protection measures built into the technology from the very beginning.
Achieving full GDPR compliance is complex and likely to be an onerous task, particularly for smaller companies trying to achieve and maintain compliance for in-house platforms. In contrast, the major cloud platform providers are all aware of the need for GDPR compliance, have the resources available to ensure compliance and can provide the tools, such as access controls, monitoring, logging, and encryption, to enable their customers to be equally GDPR compliant.