Why ask "Why Now?" when building a formidable enterprise software business.
In almost all of the businesses I’ve run, our teams will tell you that when we made our initial product and go-to-market strategy decisions we simply broke things down to three fundamental questions to stress test a hypothesis:
Why…..Why Now?…..Why Us?
Why, as in why do it at all? What is the unmet market need?
Why Now? as in what conditions have changed in the market - be that the customer's own market or economic dynamics, or a technology advancement that can force or trigger a potential change in how the customer operates, or an available set of concrete and statically valid feedback on how the incumbent stack is working out for the customer, and or even the tech and cultural debt of our competition that prevents them from making a hard pivot to meet a customers evolving need.
And finally, Why Us? as in what unfair, flippers-to-a-swim-meet advantage do we have that gets us outsized gains by moats we have built in the past. Examples are a sales team that has access to our target customer list, a hungry systems integrator ecosystem that is screaming for upsells, potential coupling of a new product with existing products that have a big installed base, a certain brand promise, customer trust in a market segment, etc.
Answering these three powerful questions not only stress tests the hypothesis but also serves as an incredibly unifying mechanism to bring product and GTM together to chase a singular goal.
Answering the “Why Now” question.
I find that we as enterprise software leaders generally ask Why and Why Us, even subconsciously at times or not in those very terms, but we don’t stress test “Why Now?” nearly enough, if at all. And not stress testing this single criteria will at the very least demolish your CAC and deal cycle times requirements and at most, land you in the category of “great idea, but the market was just not ready for us”, and as a result, a loss of the full investment. I saw this missing element over and over again in our markets. And in the advisory work I am currently doing before I go back to a full-time role, I see it all the time.
Answering all these three questions is not science and not art. It’s craft. It takes having done it a few times to get better and better at it, each time with different ingredients and raw materials that you are handed. All these provide a wedge but you can also be a victim of confirmation bias, especially with Why Now, if it's not done with brutal honesty.
An example:
At Successfactors, we were maybe 6th or 7th in our category of collaboration and peer-to-peer learning software. We had a good product but were late with nominal market share, we had no real brand authority in this space, and our competitors had much larger marketing budgets and mindshare. But everyone was trying to our-feature other player and as a result, the margins were terrible.
So we set out to deploy this framework. The punch line: in 4 years we went from just a player to leader status in 16 analyst reports, achieved 100% CAGR, and grew from 6 to 34 million enterprise subscribers. We moved to the front of the pack.
Here is how we did it:
In answering the Why Now? question to find a wedge, we found that the entrenched competitors had at best delivered a product that could only be measured by soft-ish metrics that would never impact a balance sheet or that would never make the career of any C-Suite executive who had championed their products because the product could not be tied clearly to savings, revenue or risk reduction. And that broadly speaking because it was hard to tie the product in its current form to quantifiable use cases, adoption and renewals was a very expensive endeavor on the books of our competitors.
This reality gave us conviction around our Why and Why Us but kept us honest around the “Why Now?”.
So we set out to disrupt the conventional messaging and positioning of the space and massively evangelized the problem to get every CIO and CHRO, and our industry analyst partners to learn of another approach to collaboration that was tied to concrete financial metrics. Our goal for the first phase of this effort was not to expect immediate converts but to seed a kind of dissonance in the customer's mind about whether their incumbent approach was truly the right one. And that built pretty qualified pipelines for us to continuously educate and eventually unhinge them from their current tech stack. Our funnel was super qualified and our sales enablement was super sharp and focused.
We partnered closely with our engineering teams to build the right features and integrations into systems of record so that we could tie the value of collaboration to every day tasks of specific knowledge workers and make the experience seemless and within the application they lived in. We then edged our way into supply chain and CRM and HR conferences and conversation and drove the discussion around process transformation vs just talking about lose and sometimes feel-good collaboration benefits. Our sales teams loved it.
With hard metrics now an achievable thing for our category of software, we got the systems integrator ecosystem interested in using our products to spin up large business transformation consulting projects. And a sustainable indirect channel was born.
And we could show hard ROI, not with new metrics but how our software made the things that executives were already goaled on, more achievable.
To put a bow on this, because we recast collaboration as a performance enhancer, we got out of the soft pricing trends that had plagued our peers.
We downright owned a particular narrative in the market for hard-ROI returning collaboration and learning software. If you were a right-brained executive buyer, we were the best show in town.
All because we figured out our Why Now.
Find yours.