Managing During Turbulent Times

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Managing During Turbulent Times

• Jon K. Hirschtick
• CEO, SolidWorks Corporation
• MIT Enterprise Forum
• June 6, 2001

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Its Easy To Start A Company, But Its Hard To
Start A Business

• Company people, idea, name, logo, capital,
  product
• Business sales, sales growth, profitability
  growth
• During turbulent times, businesses last while
  mere companies crash

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Building A Business

• 1) Build products that people will BUY
• 2) Have great instruments
• 3) Recurring revenue is king

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1) Build Products That People Will Buy

• Low sales is 1 startup problem (source my
  personal guess)
• Test sales proposition early and often
• No free Betas
• Beta test the customers wallet!

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2) Have Great Instruments

• When flying through a storm, you need great
  instruments
• Create and monitor your own company dashboard
• Watch the basics
• Have one package of information
• Graphical
• Trended
• Actual vs. Plan

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Business Dashboard
1) Graphical 2) Trended 3) Vs. Plan
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3) Recurring Revenue Is King

• Great businesses have recurring revenue
• Ex maintenance, subscription contracts, service
  retainers, etc.
• Drives both sales growth and profitability
• Start every month with revenue in the bank
• Make it a part of your culture from day 1

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Recurring Revenue Example SolidWorks
Subscription Service

• 1,295 per year
• In addition to one-time 3,995 software license
• Technical support, upgrades, knowledge base,
  online content, etc.
• Today over 50,000 subscribers
• Competitors offered 400 upgrades every two years