Which Train Are You Hopping?

In a prior life, I was a systems integrator (SI). When discussing alternative business strategies with my partner, George Weihs, he would often pose this question; “Which train are we hopping?” Though a seemingly simple question, it cut to the heart of the matter. Meaning, is the strategy we are contemplating differentiating us, or are we merely jumping the crowded train that everyone else is riding? Sure, the destination may be desirable, but if the ride is unpleasant and our chances of success at the destination are low because of a torrent of superior competition, why hop that train?

These days, I spend a lot of time at KnowledgeLake recruiting and working with our valued partners. My goal is to help them be as successful as possible by leveraging the KnowledgeLake Platform and delivering customer-relevant point solutions. While my partners are free to sell our platform whichever way they see fit, my most successful partners are those who layer their solution-oriented expertise, their "special sauce" if you will, on top of our platform and solve specific customer problems. In other words, the ones who hop the train headed where their chances of success are highest, even if that destination is a bit more secluded.

What do I mean by that? Well, if you look at most SI’s websites, they often list the industries within which they “specialize”. You know the list: financial services, healthcare, insurance, telecommunications, etc. While some truly do have expertise in these vertical markets, most really don’t. Sure, they may have had a customer or two in that industry, but they are far from experts in it. However, they list these verticals because those are the fat parts of the broader market. In the US, financial services is a $1.5 trillion dollar market. Healthcare clocks in at $3.8 trillion. I understand the temptation to chase such colossal markets. But, so does everyone else. And therein lies the problem. If the SI does not have domain expertise and experience in a market, regardless of how big it is, the chance of success is low leaving the SI destined to operate hand-to-mouth on the opportunistic crumbs that fall from the table.

When I meet a prospective partner, I always ask them the following questions:

·        Does your business have a particular focus (vertical or tech-related)?

·        Are you better than most others who claim a similar focus?

·        How committed are you to that focus? Meaning, do you opportunistically accept work that draws resources away from that focus? How often does this diversion happen?

My best partners have clear answers to these questions and a business plan to back it up. A plan that addresses the following questions:

·        Who are we going after?

·        How and where do we find them?

·        What story do we tell them?

·        What problem are we solving for them?

·        Do we credibly talk the talk and walk the walk?

·        Why are we uniquely positioned to solve the problem?

·        What is our methodology for solving the problem?

·        How do we determine which vendor’s offerings comprise our solution stack?

·        How do we support and enhance our footprint within the customer?

·        How do we make this profitable and repeatable?

·        Who is our competition and how do we beat them?

How many SIs can credibility devise a plan that answers the questions above in pursuit of a giant market, let alone more than one? None. And prospective customers know that. So, don’t do that.

What’s my recommendation? Well, here’s what I’ve seen work. Specialize, focus and commit. My most successful partners are those who take the time to: get really good at something, get comfortable telling a story to people who care and in a language they understand, and deliver repeatable success. It almost doesn’t matter what “it is”, as long as you are delivering relief to a specific pain point within an approachable market - a market that is identifiable, reachable and winnable. In fact, the more obscure the market (assuming a certain size and propensity to spend), the better, because your specialization will put you on a less crowded train and make you more valuable to the folks at the end of the line. And while your total opportunity flow may be less than it would be if you were chasing a colossal market, you will be more relevant in each deal. As an SI recently told me, their focus on a niche market has now made them; “one of the go-to vendors that has to be brought in and evaluated in these type of deals” in the industry he has chosen. That is an enviable position to be in and KnowledgeLake is proud to be part of that partner's solution stack.

So, don’t be afraid to be the bigger fish in a smaller pond. Get compensated for your guidance and experience as much as you do for your solution. Your commitment and focus on a route less traveled will drive a heightened awareness of your solution to your target market, increase your win rate and boost margins. Fewer, but more winnable deal opportunities, fewer qualified competitors and higher margins, that’s the plan I want to help my partners get behind.