Solving Business Problems = Money
Many times, companies that are in the software business lose sight of how to maximize their chances for success. This is especially true of companies that serve multiple market segments. Sometimes it is easier to solve the problems of one segment that is not profitable than it is to solve the issues of a more profitable market segment.
This was the subject of an email that I sent to the management team of one of our portfolio companies that is on the verge of growing exponentially in the next few months. As they begin the path of growth, they will be looking to solve problems of businesses, which is where the core of their future revenues will come. With this on my mind I sent this email:
This is wonderful work by all involved. And there is probably a message here for the business customers as well: People love things that are completely turnkey. While it is great to be amazingly flexible and adaptable, most people do not have the creative energy to make things work in that kind of environment. When we solve business problems for businesses, we win. That is when our price point goes from ~$4/seat to $12/seat. So congrats to everybody; being the leader in the educational market will make us loved by schools everywhere. And hopefully these teachers, students, and parents will take us to their jobs where they will spend money with us. The next step, being a leader in the business environment, is the part that will make us rich.
