A legal software provider was struggling to the point of failure. Its main product, primarily sold to law firms that would use it to process emails and documents during electronic discovery for their clients’ litigation, was a demonstrably better than its competition. But it wasn’t selling.
Company management was confused. The current CEO didn’t want the job or understand how to do it. The head of sales had little experience and couldn’t reach agreement with prospects, and much of the company had given up on things getting better. The Board wanted to sell but the company wasn’t worth enough in its current state.
The Board of Directors brought in a new CEO, now a E78 Principal. After review and analysis, the CEO brought in a new head of sales and restarted marketing. He instituted regular and honest company meetings and went out to meet the customers and prospects. The key change occurred when the new team realized that the problem wasn’t price. It was the way the product was being sold. The company had been trying to sell the product using a classic enterprise model – pay a fee and use the software. The law firms that were the immediate customer didn’t do business that way. They charged their customers by the amount of work they did. By shifting to a usage-based model, along with all the other changes, the CEO was able to unlock the market.
The company flourished. They got to profitability in six months and raised a round of VC funding. The company grew revenue by 1,200 percent in two years, was named a statewide best company to work for and a “Fast 50, Rising Star” by a national consulting organization. The Board got the value that they wanted and sold the company.