This is the second post in a series featuring successful entrepreneurs. The question I posed was this: "What is the single most important strategic decision you ever made?" Here is the answer from Ed Williams, co-founder and President of Blue Ridge Numerics.
This is a fairly easy one for me. It comes down to the fact that no one is good at everything. As entrepreneurs, we tend to have deep skills in some particular areas, but we often do not want to recognize the areas where we are weak. In our case, that was sales. We were a strong technical team, but we had almost no skills in sales.
We had built a new product from the ground up over a 5 year period and that product had one sales channel which was an OEM relationship. That was a critical revenue stream in the early days, but our OEM partner knew that they were our only source of revenue and they wanted to drive the price down. We were adding lots of capabilities and functionality that was adding much more customer value so we felt like we could be driving the price higher.
The strategic solution was to find an experienced, passionate, and ambitious sales leader who could help us begin to build and drive our own sales channel. That would reduce our dependency on the single OEM sales channel and also allow us to begin lifting the product price and selling the high value proposition that out product was delivering.
As many entrepreneurs have learned, knowing what to do and doing it are two different issues. We knew we needed a top notch sales leader who had the experience and expertise that we did not have, but cash flow was limited. That was not a good combination!
The first attempt was a complete failure. We hired someone we could afford and had some potential; but he did not have the right experience and expertise. That lasted only a few months. The next attempt, we tried not to let the cash barrier stand in our way. This allowed us to begin to engage with some people with more experience. Trying to come up with a compensation plan that was acceptable to these candidates and affordable for us was tough. What we had to offer was opportunity. We needed to find someone who saw it - and believed in it. We structured a plan that had a much lower base than a typical sales compensation plan but offered far more upside for someone who could deliver the revenue. This worked as a very nice filter to qualify candidates who were confident that they could do the job.
In the end we came across Kevin O’Shea. He had the right experience and expertise; and he also had serious passion for our chosen mission. After some negotiations we included an ownership stake in the company, and we were able to land a key sales leader. This was a big turning point for our company.
We went on the grow revenue at ~100%/year for the first 2-3 years after Kevin joined the team. We were an Inc 500 Company in 2003; and we were on the Deloitte Technology Fast 50 in Virginia from 2002-2008. Only three other companies have made that list for 6 years running.
This was not only our best strategic decision, but also the best investment that we have made!
Editor's note: On March 11, 2011, Autodesk, Inc. (NASDAQ:ADSK), a leader in 3D design, engineering and entertainment software, announced that it had completed the acquisition of Blue Ridge Numerics, Inc., a leading simulation software provider, for approximately $39 million in cash.