pstrongBy Thomas Howe/strong/p
pOne of my favorite books, Germs, Guns and Steel, asks a simple question: Why did Columbus sail across the ocean to meet the Indians, rather than the other way around? Why were the European and Middle Asian cultures more advanced than the native Americans? For the author, the answer came down to fundamentals of geography (the European continents were more horizontal, such that domesticated crops were more successful leading to higher populations), the numbers of native animals that could be domesticated (mutated germs from domesticated animals were the main source of human-borne illnesses, most were from Europe which increased the Europeans resistance to them) and natural elements like steel (allowing the Europeans to have advanced tools and weaponry.)nbsp;nbsp; As we look at the acquisition of Sylantro by Broadsoft, we can ask a similar question: Why was it that Broadsoft was the victor and Sylantro the vanquished?/p
pBefore I get too far in the analysis, I suppose some caveats are in order. First, even for people who worked directly for the two companies, this is an impossible question to answer fully.nbsp;A major element of understanding organizational behavior is that of blindness: You might understand your job, but as the distance increases between your position and somebody else’s in the same organization, your understanding goes precipitously down.nbsp;Mike Tessler, for all of his obvious gifts, simply cannot understand what it is like to be the staff engineer at Broadsoft, or vice versa. It is nothing but hubris to believe that somebody outside either organization really understands what happened inside.nbsp;Second, my own experiences color how I perceive the world.nbsp; I was the US CTO of their joint major competitor, Netcentrex, which was acquired by Comverse in 2006 for $164 million.nbsp;I ran the Sylantro Mashup competition in 2007; I won the Broadsoft Mashup Competition in 2008.nbsp;Thus, I am as well-educated as an outsider can be,nbsp;but I see things based on my own experience and am not party to all events inside the companies. Lastly, I firmly believe that analysis like this says as much about the analyzer as they do about the answers they give.nbsp; However, this is valuable in-and-of-itself. So, given that I’ve dispensed with the disclaimers, how do I see it?/p
pFirst, I think this particular segment of the market had a fishing problem. I have grown to believe that if you had to pick a single function of a business to be excellent at, it would be marketing because it answers the most important question: Does the lake that you are fishing in contain fish?nbsp; From the outset, the market for IP Centrex was immature and not well-developed.nbsp;Sitting here in 2008, it is much more mature and attractive, but in 2000 - not so much.nbsp;IP Centrex requires a value chain that didn’t exist, making it an uphill battle for all companies - Broadsoft, Sylantro and Netcentrex alike.nbsp;At the time, plain ol’ centrex didn’t have the reputation as the hottest and best selling aspect of telephony. This set the bar pretty high on execution for all the players - failure to execute perfectly was deadly. If the pond had more fish, it would be much more forgiving.nbsp; As it was, forgiveness was not in the cards./p
pSecondly, sticking with marketing, Broadsoft started its life with a killer marketing team, with Mike Tessler, Scott Haufpair and especially Scott Wharton.nbsp;The best that any company could do was to match the skill and talent of those three; I couldn’t draft a team that was better. (As good maybe, not better, and I would need some serious money to do so.)nbsp; Sylantro struggled early and often with marketing and execution, moving from a PBX focus to IP Centrex, losing a little bit each time, finally settling down with a carrier focus.nbsp; I met thenbsp;Broadsoft team soon after they formed at a VON show, and, from the start, through the past years, to today, Broadsoft was focused./p
pFinally, and maybe as a direct result ofnbsp;its long term applied focus, Broadsoft succeeded in gaining the lion’s share of the customer base, making it increasingly risky to choose another path.nbsp;Even though my company had more lines and seats than Broadsoft when we were acquired, Broadsoft had more customers, reach and influence.nbsp; Our customers had larger installations, with business models that lined up with our offering - but there were fewer of them.nbsp; Broadsoft succeeded in establishing the standard for the industry, and is a position that they will enjoy for a while.nbsp;This had the obvious impact of making it harder for Sylantro to garner attention, money and customers.nbsp;The death spiral took full hold, resulting in the acquisition of Sylantro./p
pThe lessons?br /Find a pond with fish in it.nbsp;Since manufacturing demandnbsp;is a lot like pushing on a string, accept that it’s wiser to compete for fish than to be alone in a boat on a lake with no fish.br /Focus.nbsp;Accept that your company may fail because you picked the wrong market, as it will allow you to win if you picked the right one.br /If you aren’t perceived to be the leader in your field, pick a new segment to be a leader of - even if it’s smaller, because leaders like BroadSoft win./p
