“If we don’t improve our sales capability our economy is going to be dead.” Donal Daly does not mince his words when it comes to discussing the acknowledged Achilles’ heel of the Irish technology sector.
That sector is currently undergoing fundamental change as businesses adjust to the new realities of the global economy. Gone are the days when Ireland can compete as a low-cost manufacturing location; its future is as a knowledge-based economy and the Government is spending hundreds of millions of euro annually on bringing our research capabilities up to scratch.
Such efforts, which are aimed at filling the pipeline with marketable research, are doomed to failure, Daly argues, if there continues to be a bottleneck at other end of the pipeline – finding buyers for that technology.
“My concern is that no one knows how to sell anything. It doesn’t matter what you make because, if you can’t sell it, it’s not worth a damn,” he says bluntly.
But rather than just lash out at the tech sector’s poor sales record, Daly has put his ideas on paper in the form of a new book co-authored with Paul O’Dea, the former head of the Irish Software Association and Daly’s business partner in International Ventures, a technology consultancy.
Targeted at CEOs, sales managers and professional sales executives, Select Selling focuses on providing concepts and processes for technology firms in general and software firms in particular to increase revenue. It has been specifically written for ICT firms that sell high-value, complex technology to large organisations.
“The central thesis of the book is that technology firms should select their target market carefully and then, within that, profile their target buyer so that they look at their product offering from the market’s and the customer’s perspective,” says Daly.
Selling, he believes, comes down to choices as much as anything else – deciding what customers and markets to focus on, what deals to pursue and which to walk away from. Making the right choices, then, is what distinguishes one good sales professional from another.
Daly also feels – a little controversially perhaps in the light of the current focus on research and innovation – that cutting-edge products are not needed to be successful and that mediocrity will in fact do just fine. “The world is full of successful companies with merely adequate products,” he points out. “In the book, we talk in terms of ‘functional sufficiency’ – it’s got to be good enough but there’s no point in it being that much better than everything else on the market because customers won’t pay the premium.”
The timing of Select Selling could not have be better given the conclusion of the recent Enterprise Strategy Report that sales and marketing must be a major focus for firms if Ireland Inc is to continue to thrive. In addition, the Irish Software Association, which has been highlighting the sales blackspot for some time, has thrown its weight behind the book.
With nearly four decades of experience in the technology sector between them, Daly and O’Dea can speak with a certain level of authority. Daly, a Cork-born engineer, was aged 27 when he founded Expert Edge Computer Systems in 1986. He sold it in 1997 to Walldata, a Seattle-based systems infrastructure firm. “Over the 11 years of that business, we made all the mistakes we try to point out in the book,” he laughs.
His own experience as an engineer with very little commercial polish is, he feels, a common syndrome throughout the tech sector and what underlies the poor performance of many tech firms. “The essence of it is that many founders of Irish software companies come from a technical background and have a skillset that doesn’t lend itself to asking key marketing questions upfront. They only learn it as they go and consequently they make some expensive mistakes.”
After Expert Edge, Daly helped establish another technology venture, NewWorldCommerce, which went on to become one of the high-flyers of the Irish dotcom era. This business was later sold to IQ Commerce, another US firm. Two years ago Daly decided to take the consultancy route when, along with O’Dea, he founded International Ventures, which specialises in giving strategic advice to growing businesses. A lot of this counsel clearly centres on commercial skills but Daly points out that when companies get to a certain size, sales and marketing expertise alone will not be enough to sustain growth.
“We’re talking about a broader professional management capability that goes beyond the sales area. People need to understand that as their company matures sales and marketing are still important but there’s more focus on the operational things that need to be done to deliver the product properly.”
He believes there is no reason why Irish tech firms cannot emulate the success of home-grown multinationals such as CRH, Smurfit and Glen Dimplex but they will have to have the mettle and ambition to do so. He also feels that funding is important but an issue that has been overstated as a factor inhibiting the development of tech firms. “When people remark on how difficult it is, I often say in reply that it’s nothing like as hard as it was in the mid-Eighties when there was no such thing as venture capital [VC] and no bank wanted to give you money if you a software company.”
In spite or maybe because of having sold businesses of his own twice in his career, Daly is now convinced that Ireland’s technology giants of tomorrow will not be built on early exit strategies. “There’s a collective responsibility on the part of the founders, their VC partners and employees that the focus is not on starting it, getting it to three or five million and then selling it. People have been consumed with the exit strategy as opposed to how to become a great company that can dominate a space in a world market.”
Select Selling is published by Oaktree Press, priced €35. Some of its content and methodologies are available free of charge on www.selectselling.com.