What we can learn from the success and failures of eClinical companies - Part 2 / 3

Continuing a study on what causes eClinical organisations to succeed or fail. Part 1 is here. This is based on my experiences working both with and at a number of eClinical software vendors over the last 20 years. Due to the length of this, I have split this into a 3rd and final part to come out next week...

Right-size your business

I mentioned in Part 1 that the time-frames for projects, and success are extended with eClinical. This has a direct impact on 'right-sizing' your business.

A popular football manager was once asked for a 'quick word' by a news reporter. His dead pan response was 'velocity', before walking off.

In startups, 'Velocity' determines how quickly you want to a). sell, b) resource your company c). generate income and d). take capital.

Blow too hard, too fast, and your cash will dry up before the real conversions (pilots --> growth business) occurs. This is especially hard on businesses that have chosen a resource dependent model.

Today, in particular, if you are in the virtual trial solution space, and you have on-boarded a large number of staff and you are burning cash quickly, you are probably already in trouble IMHO. The already invested cash means the company will not disappear - the investors will not allow that - but the original investors and founders will be wiped out, and the reality bump will be hard on the 'boom' employees that are offloaded as the business model is consolidated.

Setting a velocity early on, and having this velocity understood and accepted by the board and investors means no (or less) painful surprises during the company development cycle.

Loss leading services

If you are in the SaaS business, it is tempting to charge for subscriptions, and then swallow subsequent costs within the services unit. In my personal experience this is a mistake.

The services staff should not be seen as the software support unit. This is something I have seen first hand - put in place a limited capability offshore 1st line helpdesk, and then rely on services to deal with the client and site fall out.

These service overheads result in poor services utilisation and can lead to high service staff turnover that drive a company into long term losses.

If an early software product has issues, using free services as an excuse for the problems might seem like a way to improve customer satisfaction. However, it results in a sponsor that 'expects' cut price, or even free services.

One method is to ensure you carry out a services hand-over at the end of your implementation phase. This is effectively a thank-you and goodbye from the services team, and a hello to the support team. Further services can be brought in, but only under a change order.

Of course, ensuring your product is high quality through adequate investment in quality, design and testing in particular can mitigate services resource drag.

Sponsor demands

As a vendor, often, feature requests submitted are seen by the sponsor as being 'fundamental to the product', and of 'significant value' to others... so should not be charged for, and should be prioritised. In big business SaaS that can work - the actual cost of the development work is a small % of the overall ticket price with the customer, but in eClinical, the idea of investing in a client now, for return later is wholly unsustainable. Our business space, and long cycle times make this unaffordable.

It is easy to throw in free software changes, even in a Single Instance / Multi-tenant platform in order to win business, but don't. Your clients will pay with squeezed development capacity later.

The solution vendors responsibility is to define the real value and importance to the sponsor and work with them to achieve a solution that works for both parties where feasible. If that cannot be achieved - and this can be very difficult - walk away.

Managing a company

“The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint to keep from meddling with them while they do it.” – Theodore Roosevelt

If you can excuse the historical sexism in the above quote, it is very pertinent here and emphasised when working in eClinical. You will often have a very diverse set of resources - Techies, Sales, QA, Services, Creatives etc. Some staff will drive you mad with their creative burps. Others will put their heads down and plough on regardless of logic. Herding these variants is not easy.

A good entrepreneurial manager is someone that can understand, and get the best out of everyone.

A company I worked at in the early 2000's was led by a highly intelligent MD. He was known for very begrudgingly delegating work, but it was known to his delegates that any deviation from the CEO's approach, vision or preference would result in trouble. It was like receiving a task, and having an axe held over them. Under that climate, most managers wilted. As the company evolved, the time to 'axing' grew shorter and shorter... The company eventually folded with no staff able to exactly match the founders often un-communicated expectations.

Founders will often want to have a say, and even control every significant decision. Initially this may not be a bad thing until the team are onboard with the vision. However, before too long this can become damaging. Capable managers will enter into a cycle where they will become disempowered, their performance will reduce, they will be criticised, leading to further disempowerment... a negative cycle with a poor outcome. The good ones will move on, the bad ones will stay.

If you start to see a cycle of staff performed well before they joined, and after they left.. then the faults are in the company and not in the individuals.

Part 3 to follow...