Scaling Your Startup by Peter S. Cohan

Author:Peter S. Cohan
Language: eng
Format: epub
ISBN: 9781484243121
Publisher: Apress

Case Scenario

Fuze was competing in what it deemed to be the $100 billion market for office communications. However, that market attracted significant competitors, including business messaging service Slack and videoconferencing service Zoom, which were doing far better than Fuze. After all, in August 2018, Slack announced a $427 million round valuing the company at more than $7.1 billion. With three million paying users, Slack had been able to generate “hundreds of millions of dollars in annual revenue.” And Zoom, which Doherty did not view as a competitor since it did not supply telephony and messaging, was valued at $1 billion in January 2017, when it raised $100 million. But Doherty was unflappably optimistic about Fuze’s prospects, he said, “There has always been speculation on private company valuations and we have never commented on any of them. Our revenue is over $100 million, and we are growing at 40% a year. There is a huge market opportunity and we win most times we compete with Microsoft’s Skype, Cisco’s WebEx, and Avaya.”

By August 2018, Fuze believed it was entering the second stage of scaling. As Doherty said, “We have 1,700 customers and we are modifying our go-to-market from a direct sales model to a blend of direct sales and partnering with the channel, which we think will welcome the opportunity to replace high cost hardware with a variable cost service. We are going after a more than $100 billion opportunity: 400 million knowledge workers who could potentially pay $35/seat/month. We are competing with products that cost companies $75 per seat per month and we combine six to 12 enterprise applications into one.” Trying to bring in revenue from the channel had the potential to help Fuze grow without spending as much on its sales force. Moreover, by adding a focus on the channel, Fuze hoped to improve its execution. Indeed in Gartner’s “2017 Magic Quadrant Unified Communications as a Service Report,” Fuze was among the leaders on Completeness of Vision but fell below the center line on Ability to Execute, according to industry analyst Michael Finneran who said, “To fuel their international aspirations, it looks like they’re stepping up to the plate with regard to bolstering their channel program, so the key now will be execution.” Chief Sales Officer Chris Doggett said in February 2018 that Fuze’s expanded program would enable value-added resellers, solution providers, and IT/communications solution consultants to offer Fuze’s products.

Doherty hired people who had considerable experience and who fit with Fuze’s culture . “I look for people with the ability to recognize patterns. When they see a familiar problem that can suggest the right solution. I emphasize EQ over IQ; it’s how you use your intelligence and how you collaborate. I want people with a fantastic attitude, high energy, the ability to collaborate to solve problems, and a will to win.” Fuze was organized by function. As Doherty explained, “I hired Doggett, who is doing an excellent job. He oversees sales, sales engineering, customer success, customer deployment, and account cultivation.

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