They say a new technology does not merely add something; it changes everything.
But what should you do if the speed of new technology is too slow to disrupt a $13 billion industry?
In 1990, Higgins started a field force management business to help optimize processes and information for companies with staff in the field. (Which is not the same as force field management... This isn’t Star Trek).
As Higgins business grew at break-neck speeds to five offices and 1,630 employees, payroll soon became an out-of-this-world pain. Manual data entry was costly and inefficient. Mailing paper checks was insane. Not to mention the slightest error resulted in excessive rework.
There had to be a better way.
Rather than hiring an engineering team, Higgins bought a web development business and sold off the clients. His goal? To build an automated solution to manage business accounting from the ground up.
Few businesses were more ripe for disruption than accounting. Higgins’ company was sending 13,000 checks per year. Paper checks, in paper envelopes. The process was inefficient and costly, and errors were common. It cost the company dozens of hours every month.
They needed a better system.
“We needed to streamline our processes to lower costs. It shouldn’t cost so much to pay the bills. An entire suite of tools grew from that one simple idea.”
By UK law, the company had to issue pay stubs. Emailing them would expose sensitive data. So they built a system to alert payees online within a secure environment.
Higgins met with the design team and described their accounting problems. They built an enterprise resource planning (ERP) system designed to cut down on paper. Pay notifications were delivered online instead of mail.
“That one software process saved us $110,000 per year. That’s when we realized the full potential for businesses everywhere.”
“If employees feel you don't trust them to do their jobs correctly and well, they'll be reluctant to do much without your approval...” Mac Anderson, founder of Simple Truths and Successories.
A successful founder cannot micro-manage employees. Employees need to feel empowered to help you build a remarkable company. Higgins demonstrated this by using his team to source customer feedback.
“Our staff was instrumental in building out the software. We listened to comments and suggestions coming from all our employees. We used that feedback to address their problems. We needed to know how easy the system was to understand how to use it. And who knows it better than a brand-new employee?”
But Higgins did not stop there. When one employee saw this internal tool could disrupt a billion-dollar industry, he trusted him completely.
“When one of our tech experts said we could productize our system, it was a revelation. We’d developed a tool in-house to meet our own needs. Would other businesses need the same solution?
I had no time to explore the options, so I trusted my team. I gave them full permission to develop a commercial product. What they came back with blew me away.”
After four years of in-house use, Higgins was ready to cast a wider net. He tested the waters by giving the software for free. A U.S. business with 500 stores came to him in desperate need of a procure-to-pay system, which covers everything from purchase orders to invoice approvals.
And so a partnership was born.
Don’t make the mistake of thinking too small.
Although Higgins built his product to meet his internal needs, it wasn’t long before he was exploring new markets in other industries and countries.
“Success isn’t always found in your local area or even within your industry. To grow your business, think about how you can tweak your product to meet the needs of other industries. Make those changes and target your marketing to match.”
When PurchaseControl launched in 2006, there wasn’t much competition. But the market quickly began to heat up.
“We could have been discouraged by the size of our competition. We weren’t. No matter what industry or product you are in, there is no one-size-fits-all solution.
We kept moving forward, improving our product and talking to our customers. The business grew faster than we ever imagined.”
There will always be a new startup or established company ready to move in on your turf. Higgins advises staying focused on your own goals.
“Keep an eye on the competition, but don’t let fear or intimidation stand in your way. As long as you’ve chosen a product people need, there are plenty of customers to go around.”
Every business faces a delicate balance between value and price. Products can’t be overpriced, otherwise, no one will buy it.
But they can’t be underpriced, either. Otherwise, people will distrust your product does what it promises to do. Would you believe a $50 Rolex was real without sufficient reasons?
And sometimes a price-break helps you break into a new market.
This is why it is critical for startups to create an effective pricing strategy.
“In the beginning as a small startup, we looked for opportunities to cut a deal. Could we open a new revenue stream with a different type of customer? "
“After we’d been dealing with retail stores for a while, we branched out. We started pitching dental offices and the pharmaceutical industry. We didn’t offer cut-rate deals, but we did offer discounted practices in exchange for leverage. They helped us develop new products. These early adopters were great references to break into a new industry. In return, we inked three-year deals at a very reasonable price. It was a win all around.”
To figure out the right price, Higgins says you should watch a customer’s resistance. If a lot of customers complain and walk away, your price is too high. If they don’t bat an eye at your price, you’re likely too low.
What do you do after you launch to keep growing? Sometimes you need to do whatever you can to get a customer.
Or as Paul Graham, founder of Y Combinator said, “You’ve got to do things that don’t scale.”
“I got a phone call one evening at 8:30 pm. This was midday for the caller. I had just picked up my son from an activity and we were heading home."
“It turns out, someone had referred us but they did not know if we’d be the right fit for their problem. We talked for 20 minutes and I got some information about their business. "
“The next day I had a designer create a brochure targeted specifically to their industry. We sent them the brochure and the sale was made.”
I asked Higgins what else he did to grow PurchaseControl.
Higgins decided early on an effective go-to-market strategy for PurchaseControl should focus on content. They set out to become the go-to resource for payment contracts. They produced quality content about every aspect of purchasing. This approach drives a ton of demos for their sales team to close.
But their sales team doesn’t sit on the sidelines waiting for leads. They also proactively look for new customers who fit their target audience.
Channel partnerships, integrations, and referrals also generate a ton of leads. The trust and relationships took time to build. But referrals often offer the least sales resistance too.
And of course, they do it all with a stellar customer service team to keep clients happy.
To wrap up the interview, I asked Higgins to sum up his best advice for new entrepreneurs. Here are his rapid-fire answers.
1. “First and foremost, build something that fills a need. In answering our own internal needs, we soon realized that other businesses would need the same thing. That spurred us to think outside our immediate needs and look at the bigger picture.”
2. “Identify your customer base, know what your competition offers, and develop the best product in the space by concentrating on the gaps. Make it more user-friendly, more fully-featured, and more realistically priced. Wherever the competition misses the mark, hit the bullseye.”
3. “Get some momentum going by cutting deals with a few high-profile customers...and then value their feedback. Ask for recommendations, pull them into social media, publish case studies. Work your successes.”
4. “Establish your company as an industry leader through authoritative content. Provide insight and information through content, social media, and media contacts.”
5. “Listen to your people. Users, customers, and your dev staff are the best resource you have. Seek their feedback for developing new features and new products.”
6. “Always be closing. It’s old advice, but it’s the bottom line for any business. Small business owners can easily get distracted by the minutiae and lose sight of where the revenue is generated. If selling gives you the heebie-jeebies, hire people. But never stop selling.”
7. “Never stop moving forward. Technology changes at lightning speed. The emergence of AI in tech is a game changer that will soon infiltrate every industry and every home. We all need to be ready for it. At PurchaseControl, we’re excited about what AI will mean to our business, and we can’t wait to see what comes next.”
Special thanks to Sherry Gray for making this interview possible. For more articles like this, click here to check out our 1,000 True Fans series.