Mike Wessinger | Crain's Toronto

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Mike Wessinger

Background:  

PointClickCare offers a cloud-based network for providers in the long-term and post-acute care industry, with more than 13,000 partners in North America. Founded in 1995, today PointClickCare is the largest privately held software company in Canada, with more than 1,300 employees.

The Mistake: 

We thought we could go after an entire market even though we were small, and we started chasing sales instead of going after the market opportunity. 

We had this model that really appealed to a lot of people. So if I got a call from Nevada, or from California or Texas, I'd go and chase that. We had people that were just chasing sales opportunities. We didn't leverage anything for the next deal, and didn't delight our customers. 

We learned the hard way. We spent too much money, and we were too scattered in chasing sales opportunities. We probably blew our brains out for about a year or 18 months, when we were saying, 'Hey, we've got an opportunity and we should chase it.' So we'd throw somebody on a plane and then try to figure it out.

We wasted resources and slowed ourselves down. We just needed to figure out how to eat that elephant one bite at a time.

We just needed to figure out how to eat that elephant one bite at a time.

The Lesson:

Eventually we realized we couldn't chase all of these opportunities. We said, 'Let's focus on markets. Let's figure out which markets are the right size for us to go and win.' We're going to go and win a market, not an individual sales opportunity. We can't simultaneously solve three different vertical markets in post-acute care in seven different states and be successful.

So we dialed it back and said. 'No, kindly take their name if they call from Nevada, but today and for the next six months, we're only focused on Minnesota, and that's all we're going to do. We're going to focus all of our efforts – sales marketing, product implementation –  on making sure we win that market.'

We knew that if we focused on one market, we could own it. We could have a great partner network in that market, we could satisfy every customer in that market, and we could have full sales and marketing coverage. And once we got to 25 or 30 per cent market share, then every deal would get easier and easier. 

At first, the toughest part to transition was sales, because they want to chase opportunities. They'd say, 'I've got a hot lead, they want our stuff!' But you've really got to educate them and say, 'Look, even if you want it, we don't have enough resources to make them happy. And if we don't make them happy, they're not going to be a great referral. And if it's not a great referral, we can't leverage more business in that market.' 

We had to show them that bigger picture, that we'd be far better served by creating a real market presence in a single market. That's what would cascade in the future, and that's what was going to lead to our success.

I see this in particular with software companies all the time, especially bootstrapped ones. They're so desperate for cash they'll chase any sale, and they'll do it at the expense of winning a market. I see it all the time.

When I spend time with startups with new technologies, they see an unlimited opportunity for their technology, which is great. But what they need to do is figure out what their go-to market is. They need to think about right-sizing how they're going to target that market, so they can focus all of their effort on some sub-component of that market and create real momentum.

So if I had to go back, I would be a lot more focused. I wouldn't waste time and resources chasing individual sales opportunities, and I'd go more thoughtfully after specific markets. You need to right-size your target market, so you can go and win it.

Winning it means you've got a full ecosystem around your product. You've got your distributors and partners, you've got delighted customers who talk to each other all over one area. You can focus your spending in one area. And I think that really helps you create momentum and makes business a whole lot easier. 

Follow PointClickCare on Twitter at: @PointClickCare

Photo courtesy of Mike Wessinger.

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