There's much talk these days about elites. And there's no question that the elite of the elites is the small collection of executives, investors, political leaders, and intellectuals who show up at Davos, Switzerland every January for the World Economic Forum (WEF).
The fee to attend -- $325,000 -- would be steep for the average person.
What would it take to get that fee waived?
One answer is that WEF could select you as one of the world's 20 Technology Pioneers. For that, all you have to do for that privilege is to be selected by leading executives such as the former CEO of Cisco Systems, John Chambers from a pool of 4,000 to 5,000 nominees
On June 30, I interviewed one of these talented 20 -- Justin Moore, CEO of 10 year old Axcient, a Mountain View, Calif.-based provider of disaster recovery services that has raised $70 million and employs 150. Inc. ranked Axcient the #1 fastest growing Security & Data Protection company in the US for three-year growth of 3,116%.
With thousands of customers ranging from SMBs to large enterprises combined with over $70M in funding to-date, Axcient has the momentum and backing of premier investors to execute against its vision of true IT resiliency in the disaster recovery market. Axcient was an original disruptor in the space, and is now disrupting itself to pave the way for a new frontier in cloud-converged infrastructure after having spent immense internal resources over the last three years to develop the new offering.There's much talk these days about elites. And there's no question that the elite of the elites is the small collection of executives, investors, political leaders, and intellectuals who show up at Davos, Switzerland every January for the World Economic Forum (WEF).
The fee to attend -- $31,473 -- would be steep for the average person.
What would it take to get that fee waived?
One answer is that WEF could select you as one of the world's 20 Technology Pioneers. For that privilege, all you have to do is to be chosen by leading executives such as the former CEO of Cisco Systems, John Chambers, from a pool of 4,000 to 5,000 nominees
On June 30, I interviewed one of these talented 20 -- Justin Moore, CEO of 10 year old Axcient, a Mountain View, Calif.-based provider of disaster recovery services that has raised $70 million and employs 150.
In 2013, Inc. ranked Axcient the #1 fastest growing Security & Data Protection company in the US for three-year growth of 3,116%.
That's when Moore saw changes that would threaten Axcient's growth rate and on June 28, he launched a new service -- Fusion -- designed to revive the company's rapid growth.
Here are the five steps he took to get to this point.
1. Look hard at the future
Most industries are beset by changes that threaten to yank the tablecloth out from under cherished assumptions about how to make money.
And among those industries, segments of the information technology industry are subject to the most rapid, gut-wrenching changes.
If you are running such a company, the pressure to meet ambitious growth targets could easily justify spending your entire day trying to find sales prospects and closing deals.
But it's probably better for you to delegate that role and spend a good chunk of your time thinking about the trends that could upend your business and what to do about them.
That's what Moore did. As he explained, "In 2013, I saw a shift in the market. We focused on three trends: 1. More and more small businesses were moving to the cloud; 2. Axcient's service would therefore be commoditized -- meaning its revenues would be threatened; 3. Organizations would reevaluate their IT budgets and push vendors like Axcient to offer services that could do more at lower prices."
2. Build the case for action
While analyzing trends is difficult, leaders face an even more daunting challenge in thinking about what to do about these trends and why that course of action will boost growth.
Such as case for action is particularly important for small companies because building a new product requires resources that represent a significant risk for the company.
In order to justify such a bet-the-company decision, business leaders must build a compelling case for action. At a minimum, such as case would explain that the new product would give the company a chance to go after a much bigger opportunity which would lead to the company to, say, a $1 billion in revenue.
Moore's case for action centered on the big jump in market opportunity that would be created by the new product he wanted Axcient to build. "We had been focusing on businesses with fewer than 100 employees and wanted to target companies with up to 4,000. For that larger pool of potential customers, we saw that they would spend $100 billion on the cloud -- but that only $30 billion of that spending was generating business value for companies," he said.
Axcient's proposed service would make the other $70 billion -- spent on infrastructure rather than analysis -- a much smaller number. As Moore explained, "We saw that if we could broaden our platform from backup and disaster recovery to other activities such as data protection, test and development, archiving and compliance, data warehousing and analytics, we would be able to reduce that $70 billion by 80% to 90%."
And that would translate into millions of dollars of IT budget savings for companies that Axcient hoped would buy its new service. "A $500 million (revenue) company might spend 5% of its revenues on IT -- or $25 million. 70% of that, or $17.5 million would be spent on non-productive infrastructure. Our new service could reduce that by 80% or $14 million a year."
Simply put, Moore's case for the new service was that it would open Axcient up to a larger market that would make up for the loss of revenues from its declining core business by saving companies millions in less-productive uses of its IT budget.
3. Persuade the board
Once you have a case for action, you still need to get the resources to turn that case into a new business -- or more specifically, you need to get your board to approve your desire to dedicate considerable people and capital to developing the new product.
Moore was able to persuade Axcient's board that dedicating such resources would pay off. "I wanted to dedicate 50 engineers full time for three years to developing this new product. I argued that the new product would give us access to a much larger market -- from $4.5 billion in our old market to $70 billion in the new one -- that could make us a $1 billion company. And with customer acquisition costs rising and customers' willingness to pay declining, we needed to attack a new market to replace the lost revenue," he explained.
4. Dedicate the resources
Once you get the resources, they need to go to work to build the new product. And that is what Axcient has been doing for the last three years.
Moreover, Axcient decided to conserve its scarce resources to fund that development. As Moore said, "In July 2015, we saw that the funding landscape was changing and we would need to get more efficient in order to pay for the development. We made the decision to control our destiny by reducing our cash burn rate in line with our revenues. We invested 287,000 development hours and have 23 patents on the technology."
5. Test, iterate, and launch
In order to be ready to launch a workable product, engineers must build prototypes, get feedback, and respond to that feedback with improved versions.
Axcient's development team followed that general approach. As Moore explained, "We just launched Fusion on June 28. We already have our first customer -- a chain of gas stations."
Moreover, Axcient has dedicated a sales force to selling to larger business customers. "We need a dedicated sales force to go after larger customers but we think it will pay off because the average Fusion deal size is 10 to 20 times bigger than our previous service. We are going from per-year customer deals of $1,000 to hundreds of thousands per year."
It is way too early to know whether Axcient will succeed. But it's clear that Moore's approach to building the company's future is courageous and based on compelling economic logic.
What's more, you can benefit from his approach without having to pay those steep Davos entrance fees.