July 06, 2018
In a recent interview with Andrew Goldsmith, the COO of a six-year-old startup, Peter Scott revealed how the company has managed to survive in the dynamic market where 60% of high tech firms are dying within their first five years.
Divvy Cloud is a budding startup in Silicon Valley that was started by CEO Brian Johnson in 2012 with CTO Chris DeRamus. The company, as the report by Forbes suggests, is trading in a much-sought-for technology that produces “bot armies” to optimise the IT cloud network infrastructures for security, compliance and performance. At present, the company is serving corporate clients like GE, Discovery Communications, and Fannie Mae. Not only that, it also accomplished a successful VC financing round in the later months of 2017.
Though the services that the company is offering are quite useful and innovative, they alone cannot be credited for its success in this highly competitive market. Scott mentions in the interview, that Divvy Cloud’s founders, too, have faced all the challenges that most high-tech startups deal with, but it is the effective leadership and great interpersonal skills of the company’s leaders that allowed it safely to the shore of stability.
To support his point, Scott shares an experience when one negative feedback was about to change the course of the company’s growth, and how a timely response from one of the leaders saved the day. Scott explains, “One of our board members introduced us to a great prospect. We take the train to Connecticut, meet the COO of corporate IT, go through our sales pitch. After an hour, the COO politely lets us know there were half a dozen companies offering similar solutions, some 12-18 months ahead of us from an enterprise capabilities perspective.”
This would have brought down the morale of many founders, who would consider backing out as the best move in such situations; but CEO Brian Johnson is not among such people. Instead of accepting defeat he started highlighting the ‘underlying bot technology, and how it could respond to IT network governance problems in real time.’
This little difference caught the attention of the prospective client who was then successfully converted. Reminiscing the incidence, Scott recalls, they didn’t just win one project that day but also realised the ‘key point of differentiation’, which now affects how the company positions itself in the market and how they propose to evolve.
Scott further explains the importance of interpersonal skills in leaders, by demonstrating how it played a central role in the building of an effective team and a contributing customer base.
Scott says that regardless of how great one idea or in his case a technology is, the market is too noisy to attract the right customer and employees. In such a hyper-competitive market, what saved Divvy Cloudis its leader’s ‘ability to capture customers’ imagination in person’. He states that effective leaders use innovative and visionary thinking to solve tricky problems and create strong relationships with individuals who would help in the survival of their organisation.
Furthermore, it’s not just leaders. For a new startup to thrive in the market, a right team is as important an asset as anything else. So, when hiring the staff for the company, they didn’t necessarily look for the people who have experience in selling technologies with tech titans. Such people, Scott explains, will “struggle with the uncertainty and rate of change that comes with a startup.” So instead, the company invested time and resources in creating a team of passionate people who are flexible and not just experienced.
These managerial skills, along with a solution that genuinely solves people’s problem, formulate the key to the success of Divvy Cloud and most other thriving startups. So even though times are tough in this market, with the right people, solution, and skills, any worthy idea can finally win the battle against all the odds.
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