The Skinny. Lookingglass Cyber Solutions has developed a cyber security platform for viewing enterprise and Internet activity and topology, enabling users to gain insight into potential threats, accelerate analysis, improve decision-making and develop real-time action plans. Yet for all of the perceived attractiveness of this market, Derek Gabbard, CEO of Lookingglass, shared their struggle to gain traction with the government as its primary customer. With some recent successes in contracting with the Federal government, Derek discussed what he would do differently if he could replay the last several, hard years.
Avoiding False Starts. The last several years has an Alice in Wonderland feel for Lookingglass. Formed by several “Agency” alumni, Lookingglass built network visualization software they knew was missing in the market. They demonstrated their technology to the armed services, agencies, and policy leaders, and it was well received. Yet, Lookingglass had more than its share of challenges and false starts until this past summer. In trying to answer the question of why Lookingglass had such significant challenges early on, Derek outlined four fundamental concepts that would have reshaped the past several years of Lookingglass, concepts which serve as insight for any organization heading into the government contracting sphere today.
Death by Sales Cycle. First, everyone warns that the government sales cycle takes a long time. In Derek’s mind, “it takes even longer than everyone tells you.” Don’t fall into the trap “that it will be somehow different for you.” By understanding why it takes so long, an organization can survive the process, which leads to Derek’s three other concepts. Weird as it sounds, “the government has the dollars and often the desire, but no means of getting [a relationship] moving with you, which is why it takes so long.”
Get Paid to Educate. Second, don’t ignore selling services in advance of selling products. “In retrospect,” for Derek, failing to sell services “was a dumb decision for two basic reasons.” It denied Lookingglass much needed cash flow. And it denied Lookingglass the ability to get paid for educating the government about its technology. While Lookingglass sensed that potential government customers understood its technology, because it is a disruptive technology, often they didn’t and were slow or unable to move until they did. When selling a new technology to the government, a service engagement would have enabled Lookingglass to educate their customer; helping them to understand the technology would have accelerated a decision, and, ironically, Lookingglass would have been paid for that education. A services engagement “ensures readiness for your product.”
Hijack a Vehicle. Third, “the power of an existing contract vehicle cannot be overstated.” It is much harder to land a new contract than it is to get onto an existing one. The challenge is to get some traction, any traction, even if it means the right relationship isn’t initially in place. “The real rub,” from Derek’s perspective, “is finding the right partner to shepherd you along, as these are difficult waters to navigate.” As to finding the right partner, “don’t confuse the ‘grand visions’ of potential partners, with a real systematic aligned relationship.” But conversations with potential partners who can offer contract vehicles are tricky. “Be very careful of arming partners with what it takes to compete without you.” For Derek, this means much more than simply getting a confidentiality agreement in place. It means “being disciplined in how much you share.”
Derek warns not to lose sight of the reality of using partners to contract through with the government. When one uses an existing contract vehicle of another vendor, “you are in essence taking dollars from their pocket.” So the right partner is one who truly needs the expertise a company brings – and in Derek’s mind, “the best way to get to such a partner is to have a [government] customer direct them to you.” Only when the customer drives the engagement between vendors can the fundamental contradiction of going after an existing contract vehicle be resolved.
The Consultant Trap. Fourth, the government contracting world is full of consultants who say they can land contracts for companies. Few actually succeed. For Derek, “it’s easy to confuse a resume with capability, and even references aren’t helpful.” In his mind, only shortening the term and “creating escape mechanisms” seem to be the only way to protect against nonperformance. But Derek acknowledges that when companies pay consultants based on success, “you are really asking them to invest in your company, and to do so in the face the government sales cycle. It’s a lot to ask.” The tension in these relationships is attempt for a quick hit, followed by a loss of interest. “For anybody worth their salt,” in Derek’s mind, “you’re going to have to pay for their opportunity cost and focus on you.” The challenge with consultants handling multiple clients, “you never really know who they are selling for day to day.” Derek cautions that this may result in such a consultant focusing on “the quicker sell and the easier to explain solutions” in their portfolio of clients. “Know what other clients they are selling and make sure it won’t impede efforts to sell your product or service.”
The Take Away. As a sobering afterthought, Derek resignedly noted that “the most disruptive, ground breaking technology still adheres to the same [government] sales cycle and decision making process.” Irrespective of what one might think, “your technology is probably not as earth shattering as you think it is.” This was a very humbling conversation. There is a reason that the government market is littered with companies who have failed to survive its sales process. Be patient, find revenue, make that government prospect work you into an existing contract vehicle and persevere through the interminable process.
The Skinny. R2integrated is a leading Internet marketing company, which enables companies to distribute and manage content across online communities, drive user experiences, shape social customer relationships, and analyze and optimize buying behavior. R2integrated is a thought leader in understanding how peer-to-peer communications affect buying decisions.
The Demise of Mad Men. Madison Avenue thrived in its classic form when we as consumers had nowhere to hide. We were trapped in a limited universe of print, radio and TV, with ads in relentless pursuit. When we made decisions about what to buy, we sought information from those we encountered, literally in real life. Both how we are “marketed” and how we make purchasing decisions have fundamentally changed with the Internet.
Losing Control of the Message. The success companies have had in making this transition, according to Matt Goddard, CEO of R2integrated, all depends on how well they understand how purchasing behavior has been fundamentally reshaped by the Internet. There are two on-line worlds, for Matt, where information about products and services are found. In one world the brand controls the message, a world which includes venues such as a brand’s website, blogs, facebook, tweets and sponsored communities. In the other world, from Matt’s perspective, companies are “blind to how their brands are affected”. In this other world where peer to peer advice networks drive the decision making process, purchasing decisions are made unseen and therefore, for Matt, companies are “blind to the decision making process”.
The Decision Unseen. Matt argues that most companies have seen their marketing efforts on the Internet as natural extensions of their prior messaging. These companies live in the first world, where they shape the message and hope to influence its effect. But what this traditional approach misses, for Matt, is determining “where decision making is actually happening.” “The biggest challenge facing companies today is having no idea where decisions are being made [about their products or services] or when they do find out, not being able to co-exist within those communities.”
Tracking the Right Behavior. To Matt, the future of understanding the effect of a marketing campaign and the power of a brand lies not in measuring what he calls “your property”, but in measuring what “you can’t control, can’t see”, by tracking behavior and influence patterns within what he calls “communities of interest”. Behavior on corporate properties is relatively easy to track, but tracking that activity, for Matt, leaves unanswered the question of where “does the interaction occur that actually leads to a purchasing decision.” Brands are faced with the daunting challenge of how to co-exist in these advice networks. Matt does not think that a company can truly understand purchasing behavior simply from knowing how many emails are opened. It is a measurement, but not the right one for tracking decision making behavior.
Understanding Communities of Interest. What Matt believes, and he is directing much of his R2intergrated’s efforts this way, is that the power of influence marketing lies in understanding communities of interest, where individuals with a common affinity, unencumbered by marketing noise, seek information from each other and collectively shape purchasing decisions. Assuming that brands ever really knew where decisions were made, for Matt, the Internet has moved those decisions to places, literally, communities, that are hard to find, measure and track.
Reshaping Messages: Rebuilding Relationships. Those organizations focused on harnessing social media in their marketing efforts will require what Matt is calling programmatic social media marketing, which extends well beyond shaping the messaging on properties controlled by a brand and tracking its effect, to sorting through how communities a brand does not control are shaping purchasing decisions and finding ways to deliver value to them. And inside these communities, this strategy, Matt believes, extends to identifying and building relationships with those individuals who influence the decisions of others with respect to a product or service.
The Future of Engagement. The challenge left unanswered is assuming that a company can find the communities relevant to its products or services, how does that company connect with these communities, these affinity groups it doesn’t control? How does it find the influencers within these communities and engage them meaningfully? For Matt, answering these questions will shape the new frontier where marketing research needs to head. Madison Avenue is already all the different as a result of how fundamentally the Internet has changed how we make decisions. And, for Matt, when companies begin to meaningfully engage their communities of interest, then the fun really begins.
For comments about this article or thoughts on future conversations, let me know at: nfowler@rosenbergmartin.com
With more than 25 years experience in law and business, Newt Fowler advises many of the Greater Baltimore region’s entrepreneurs and technology companies, guiding them through all aspects of business planning, technology commercialization, and M&A and financing transactions.
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