Innovation

Playing with the Big Boys

Elastic Path Software Inc.'s deceptively simple strategy for rapid growth

Written by Eleanor Beaton

Harry Chemko’s recipe for rapid growth is deceptively simple: get bigger customers.

Chemko should know. The CEO of Elastic Path Software Inc. can boast such clients as Xerox, Samsonite, Time Inc. and the Vancouver 2010 Olympic Games. He can also boast a five-year revenue growth rate of 2,783%, which earns Vancouver-based Elastic Path 25th place on the 2009 PROFIT 100.

To achieve such rapid expansion, Elastic Path did many things well: hiring great people, planting a fruitful corporate culture and deploying an effective marketing mix. More important, it made the strategic switch from selling simple Web services to building e-commerce platforms worthy of large enterprises — and then satisfied those clients’ demands. “We went from servicing small clients with limited budgets and high expectations to big clients with big budgets and higher expectations,” says Chemko.

Many entrepreneurial businesses make the same leap — then fall desperately short. As Elastic Path’s example demonstrates, employing the right communications strategies, internal processes and people can help you retain big-name business.

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For Elastic Path, hunting big game was the easy part. At its start in 2000, the firm built custom e-commerce platforms for small and mid-sized companies. At that point, divisions of large firms had the autonomy to source and build small, one-off e-commerce platforms independently of their sister divisions. Chemko says his big-name clients operated similarly to his small customers: “The emphasis was on getting to market quickly. Period.”

But by the middle of the decade, the trend among corporate CIOs was to standardize their e-commerce platforms. Because Elastic Path had technical expertise and its e-commerce platforms were sophisticated and scaleable, Chemko believed he could get a piece of the action. Elastic Path approached its existing clients and won more of their business by educating them about the flexibility and sophistication of Elastic Path’s enterprise software and underscoring the success of the firm’s big projects for other corporations. To combat perceptions that small, fast-growing companies fly by night, Chemko deliberately outlined the firm’s growth strategy during sales meetings: “They want to know you have a vision for the future and can advance their business with you.”

But maturing into a firm that could provide top-notch service to billion-dollar businesses wasn’t child’s play. Chemko quickly learned that bigger clients require more than just greater technical expertise; they require greater management expertise as well. Yet, Chemko was still in his early 20s. One solution was to build an advisory board of seasoned professionals, assembled with the help of Chemko’s lawyer, a specialist in technology law.

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Another hard lesson: “You go from working primarily one on one with clients to having multiple lines of communication all over the place,” says Chemko. Because more than a dozen Elastic Path employees from various departments such as client services, technical support and product development may be working on a single large account at any given time, ensuring employees are up to date on all account activities became a constant challenge. To address the problem, Chemko set up points within the company for employees to share information about what they were working on and what was ahead. For instance, employees from the product-development branch conduct “Weekly Geeklies” — information sessions outlining their latest developments and upcoming technical innovations. A large whiteboard in a central staff meeting area is updated weekly with overall company and department goals, as well as goals for individual employees. “It’s a way for us to stay aligned with what everyone else is doing,” Chemko says.

Of course, it’s not enough for Chemko and his staff to know what’s going on now — understanding where the company is headed is just as important, he says.

Every other quarter, he and his senior managers conduct strategic-planning sessions, in which they anticipate and plan for the marketing, HR and operational requirements they’ll need to grow. “We want to know what we need to be a $100-million company,” Chemko says, “because we’re already well on our way.”

Success strategy

Plan for the big leagues: Have your sights set on large-scale clients? “Large companies are fairly complex,” says Chemko. “You have to be prepared for your company to communicate with them at many different levels.” Build a point team by selecting a few key people from your firm representing specific areas — in Elastic Path’s case, service and product development — and ensure they stay in contact with corresponding point people on the client side. Chemko recommends hiring senior talent who can steer the client relationship.

Originally appeared on PROFITguide.com