After a very long and hard look at the past two years I have decided that the company needs to change focus and the mode of operation. At current revenues (or even at 10x) it will take me at least three years more to get this into a place where it can start doing what it was started to do. There is also the fact that between a small operation and a big operation the overlap in effort is about 80%. You wind up doing a lot of things in common in both approaches.
But, the crucial factor that swung the decision for me was the fact that technology is the wrong place to keep as your sole focus if you don't have core IP that has sustainable value. In other words, if you can't license or sell it as a unit (or units), the value you bring to the table is largely related only to the price of a service and other easily replaceable variables. And that end of the market is a tough place to play at as there will always be someone out there who will undercut you. What makes matters even tougher is that the buyers are not themselves aware of the finesse of what lies underneath as long as it looks reasonable on the surface.
For Frontiernxt, that is where I had always seen the opportunity – a degree of finesse that starts with what lies underneath and meld it with higher parts of the product/organization that need not be digital to start off with. If you are a shop that primarily addresses the 'under the hood' aspect, a failure to transition to an engagement at a higher level leads to competing with the bottom feeders. Thankfully, the existing clients are not people who operate on those terms, but a look at the prospective market place makes it clear that those are exceptions.
The technology market has become a lot more commoditized in the past two-years. This was something that was an advantage for me when I started the company two-years ago, but it is now slowly starting to be a problem than an advantage. Product builds are easier to do and the gap between being excellent and having only absolutely essential is narrowing at an alarming rate. Granted, not many are out there who can still pull it off with a great degree of finesse, but what I have seen is that the gap is narrowing at an alarming rate.
In practical terms what this means is a gradual withdrawal from doing builds for clients. For what I set out to do, I need to have conversations which happen at a level that start higher than pure play execution. This may mean changes in the structure of the company itself and creation of new partnerships to address the gaps in competencies that exist in trying to move higher up on the curve. The January review should be an interesting one to look out for.
