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When I founded Appfire in 2005, hardware was king and companies like Dell, IBM and HP were the pioneers and innovators in all areas of technology. Companies were heavily reliant on hardware to run their IT infrastructure and the idea of the cloud seemed like a utopian dream. My partner and I built our company to support traditional hardware-centric models and that system was also a good success in those early years.
In 2010, I was at a turning point because the rise of cloud computing was slowly shifting the focus to virtualized environments and we were in the middle of developing new collaboration software on a hardware-based platform. VMware burst onto the scene and made virtualized software a big hit. Hardware disappeared almost overnight.
As a business leader, I had to make a difficult decision: should I take my team and my company in a direction where we would essentially abandon all the work we had put into our hardware-based product to join the rest of the market and our competitors in jumping on the virtualization trend? Or should we stay the course and continue with our product built on a hardware platform? After careful consideration, we decided against investing in virtualization immediately because the timing was not right for us.
I can't help but think of this anecdote because the AI boom is here to stay and shows no signs of slowing down. One only has to look at Nvidia's recent earnings or Atlassian's launch of Rovo, an AI assistant. When we look back in the history books one day, that time will be marked by the incredible rush and shift we've seen from companies of all sizes integrating AI into their offerings. This goes beyond simply providing AI-powered solutions. Companies are rebranding, re-engineering and reinventing themselves by becoming AI-centric to attract investment, talent and market share.
As business leaders, we are constantly faced with the challenge of whether we should jump on the latest trend. Do we follow the crowd and change our entire strategy and product roadmap, or do we stay on our current path?
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In my own journey to grow and scale a leading software company from $10 million to over $200 million in ARR in four years, I discovered three tips that can help leaders decide whether to embrace a trend or stay the course.
1. Make sure the change meets customer needs
In times of change, don't lose sight of your customers' wants and needs. Doing the right thing for your customers is more important than being right. Research shows that more than 90% of people believe that companies should listen to their customers to drive innovation. Even if you, as a business leader, are desperate to incorporate AI into your final model, if it is not important to your customers, you will fail and not make a profit.
There are several ways to get this feedback from your customer base. Conducting customer surveys, setting up a customer advisory board, and meeting with customers in person are all great ways to find out if what you're building makes sense for your customers. If your company has a strong sales program, talk to your partners regularly about what they're hearing from customers.
2. Determine if you have the right resources
It can be tempting to jump on a trend, especially when the market demands it and the competition is already on board. One of the main reasons we decided not to quickly move from our hardware platform strategy to virtualization in 2010 was that we didn't have the right people with the skills needed. Because of this, we knew we wouldn't have a success with virtualization that would have an immediate impact on our customers.
When drastic market changes occur, rather than jumping on the bandwagon, put your efforts and resources into training your employees. Many are ready and wanting to expand their skills – in fact, one study shows that nearly 75% of employees are willing to learn new skills. Then, when you have the right people with the right skills who can help you make a difference, you can shift your focus to innovation. When employees get the right training to acquire the skills they need, the company itself will see the benefits.
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3. Stay true to your core values
Think about the core values you established when you founded your company and use them as guiding principles for your decisions. Almost all employees agree that a company culture based on core values is critical to long-term success.
If the latest trend aligns with your mission, vision and purpose, it could be a valuable addition to your strategy. But if it doesn't, following it may not benefit your business in the long run. Staying true to your core principles will ensure your business stays focused, authentic and purpose-driven amid evolving market dynamics.
When a new trend disrupts the market, it can be challenging to find the right path. Consider the approach Atlassian took with Rovo. While others were quick to launch an AI assistant last year, Atlassian was purposeful and strategic. For them, releasing a tool that aligned with their mission to make teams more effective was more important than being “first.”
Remember that doing what's right for the customer is more important than trying to fit in. Blindly going with the crowd without critical thinking can often lead to conformity and a loss of innovative thinking. Don't lose sight of your mission, vision and purpose. These values are likely what attracted employees and customers to your company in the first place and what will keep them coming long after a trend fades.
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