Like individuals, every company has its own DNA. Every company possesses a unique team with a unique culture, rhythm, and way of doing business. What many of us forgot during the last few years is that it is awfully hard to change one’s DNA. What do I mean by that? Well, a number of companies big and small attempted to recreate their business models by morphing from either a consumer-focused company to an enterprise-focused company or from a hosted software company to a licensed software company. The problem is that one cannot just decide to make a strategic change and expect the whole company to follow suit. For example, selling to consumers and selling to enterprises are 2 completely different models. It requires different sales people, different marketing, and different product management discipline. How can a company that does not have this talent and DNA expect to compete with companies who do? Many companies selling software in the enterprise space have a hard enough time getting customers. Changing from a hosted software model to an enterprise licensing business is not any easier. While you may be selling to the same customer it will require some drastic changes in how you develop, sell, market, install, and ultimately support the product.
I am not saying that this cannot be done but it will require more time and money than you initially think, especially because something called DNA will have to be changed as well. As you know, changing a company’s ingrained culture is not easy to do. This lesson equally applies to large companies as it does to small. Yahoo’s announcement that it was shutting down most of its enteprise business is a recent example of this. Another example includes Ask Jeeves sale of its enterprise business to Kanisa. It is clear that in both cases that having a small enterprise business live within a consumer-focused company with consumer DNA did not work. So before you make any drastic changes to your business model, know your Corporate DNA and take that into account when you evaluate your execution risk.
