Building a Business Beyond Now
The last few years have provided an interesting climate for young businesses. Those high-flying times of active investments with big capital brought about the birth of many new companies, some of which had a strong business plan and others that were prematurely hatched and conceptually "cooked." A perception existed among entrepreneurs and investors alike that a strong team alone could put products or services on the street and make that a winning business model.
Now the capital market is self-correcting. Strong companies and strong models will still survive, and investors will still look for companies that can offer great return, but the reality of the downturn we've seen in the capital market is that investors will judge business models on the basics again—product, market, team and financial performance. As I grow my business, that's what I need to consider.
The company I founded in 1994, BeyondNow Technologies, solves information-management problems for home-care agencies. At a time when the healthcare industry is requesting advanced technology solutions, BeyondNow provides completely integrated back-office and point-of-care software solutions that enable customers to save time, reduce paperwork, increase accuracy in documentation for compliance and increase cash flow from federal, state and commercial payers. The business has gone through two major cycles of growth. The first I see as the true start-up years, through 1997. The second cycle I would call expansion, when we grew from 10 employees and eight customers to 50 employees and more than 200 customers. Looking closely at both phases has clarified my understanding of what makes a company sustainable.
Meeting Challenges Requires Change
For BeyondNow, start-up was characterized by a very close, tight group of about 10 people who had a common vision, common desire for success, and a naive, perhaps even illusionary, perspective on what we could achieve. That view of our capabilities was the fire that drove us day and night. When people told us "it can't happen," there was no frame of reference to show why it could not. Nothing in our experience could be associated with the concept "it can't happen."
Expansion brought about significant changes. Although expanding our capacity through additional team members was necessary, we did not realize what a significant challenge it would be to find people who had the "soulful" characteristics that had brought about the company's existence. Many of the new employees would never have that special relationship with our vision. Once we started bringing new people in, the pressures grew geometrically. Developing standard procedures for our work became a necessity of survival. We could no longer count on a "singular" mindset supporting our goals, so communication methods had to multiply and change.
Expansion, therefore, has required us to learn new skills. Our ability to communicate and manage has significantly changed. We have become smarter. Today, when someone tells us something can't happen, we have a better sense of the reality surrounding the challenges we face. At the same time, we are more aware of our skills and ingenuity. And then, the same core belief--that we can succeed--returns. Today, 50 people, rather than 10, believe in our dreams.
Lasting Depends on Leadership
The ability of a company's leaders to manage the pressures of expansion is what creates the core difference between being positioned for long-term viability and intended for a short-term "flip" to some other owner. Personally, I found that the commitment I made to continually reassess our performance, look for the struggles at various levels and renew my own energy in setting the tone and direction of change was—and continues to be—a key difference in our long-term positioning.
The person at the top of the organization is the key to whether a company will be positioned as a short-term flash-in-the-pan or a long-term, financially viable player. I see my role as providing that direction. Daily decisions are made in which employees have to exercise judgment, and we must aim for overall consistency. Standards for that judgment and consistency are set by the leadership of the organization.
Other elements of leadership that allow companies to succeed in a long-term game include its understanding of product management, target market, selling environment and the value of capital. The life cycle of a technology product requires a long-term strategy of improvements and expansion. Understanding our target market and changes in the selling environment allows BeyondNow to meet the marketplace with the right product at the right time. Finally, capital allows the business to grow at a pace that meets the potential of the marketplace.
Performance Inspires Confidence
When businesses that had almost no revenues were going public and the stock market supported that business model, it was easy to forget that measurable financial performance was necessary. An overly aggressive capital market allowed many business owners to overlook that concept. The burn rate of many of these companies far exceeded their capacity for real, sustainable business.
But, that time is gone. The tightening of capital requires you to be a strong competitor. For BeyondNow, competition means not just going after the business but actually winning the business. The strongest statement that can be made about your business to the investment community is customers' willingness to pay for your company's products and services.
BeyondNow Technologies has continued, throughout the last few years, to focus on the basic concept of winning and driving business. Even as the capital market begins to pressure the business for performance, we stand confidently with numbers at hand. The company experienced nearly 70 percent growth in sales for 1998 and 1999. It continues to grow at 60 to 80 percent a year. And, it is cash-flow positive. That proven performance has earned respect and created self-esteem within the company. As we bring in new capital, the management team sets goals for growth and expectations of new business.
Build Value for Sustainability
No one involved in this business is focused on selling out. We are, however, focused on building value in the business. To do that, we must build value for customers. To have customers, one must have valuable products or services. I believe my role in providing leadership is to keep our focus and direction solidly on building value.
A company that has reached success by creating value for its customers does not have to look far to find acquisition opportunities, and valuable companies are always desirable. Actually, opportunities for the future will present themselves. If we ever do sell, that will happen only when it is truly in the best interest of building greater value, again, for the company, its customers, its employees and its stockholders.