I first met Jim Scapa way back in 1986. He was pushing the envelope back then, and continued to do so over the following 25 years. Back then Altair had about 20 employees. Now they have over 1300. Back then they had only a handful of clients. Now they serve over 3,000 businesses world-wide. As with our other Winner's Circle contributors, I asked Jim a single question: what was the single most important strategic decision that you have made? His answer follows below, and it is a truly classic example of a fundamental entrepreneurial rule of thumb.
What you are doing must truly matter to your clients, and it must set you apart from your competition.
Here is Jim's story.
To me, the most important strategic decision I have made was to invest in the HyperWorks business model back in 1999. At the time, most of my organization was opposed to this direction as they saw the short term risk of cannibalizing existing revenue streams. Since most of my team are engineers and extremely analytical, many developed impressive spreadsheets to demonstrate to me the weaknesses of my model and argued strongly in our open, dialogue rich culture. After one year of hand wringing and listening to all points of view, I went against the common wisdom and rolled out HyperWorks units.
The HyperWorks Unit (HWU) licensing concept was the first in our industry to utilize a pay-per-usage system, drawing units (tokens) from a central pool served globally. It was quite a revolution in the engineering software sector where licensing was typically restrictive; often geographically limited or hard-coded to machine ID’s. In addition, the clever “leveling” vs. “stacking” concept – assigning a unit value to each product in the suite and charging only for the highest priced product - offered tremendous value and flexibility in using products within the suite.
Today this model is the backbone of our value proposition. Customers recognize Altair’s commitment to deliver a broad solution set of best in class technology, backed by best in class engineering know-how and service for a very fair price. We continue to increase the value by adding new products and paying attention to evolving technology and business trends. We also continue to tune the model to adjust to the trends as we see them.
We see our business model as a fundamental advantage. With that in mind, we applied for, received and have periodically extended patents on it. We also invest in the technology to make the model work well for customers and for ourselves.
Exceptional products. Responsive service. Breakthrough, exclusive pricing model. And the MOXIE to make it real.
Result: remarkable success!