This week’s Small Business Star is Tom Gatten, CEO and founder of tech start up, Growth Intelligence. Tom launched his company in 2009 and now counts the likes of Google, BT and IBM among his clients.
Spotting a gap in the market
After working as a journalist for a few years, I took a job with IHS in business intelligence. While I was there, I was publishing industry reports on interesting businesses in different geographical locations. I realised that my clients were using the reports to sell products to the same companies I was profiling. It made me wonder whether there might be way to scale and automate this process of selecting businesses who might be interested in another business’s product.
Then Google approached IHS and asked how fast Groupon were growing. Of course they didn’t know, so Google went away and worked it out from search volumes over time. When I later met Prash Majmudar (our CTO), he was at BAE Systems tracking submarines by listening to the oceans. So Prash joined and now we use unusual signals to predict the purchasing behaviour of companies in real-time.
Knowing when to change direction
When we first went to market, we chose to do it not as a software company but as a magazine for investors about early-stage tech companies around the world. We were addressing a major problem: how do you get good, up-to-date data on SMEs at scale? At the time, it was very, very hard. We realised there was an opportunity to do what we were doing manually with machines and that the biggest market for the data was in marketing, not investment.
Building a product with minimal investment
We started building a product with minimal investment risk and got it to market as soon as we could. In fact, we went to market before building the software! I sold the first six-figure annual licence before a single line of code had been written. That’s a lot of trust for a PLC to put in a three-person company, as we were then. That’s how big the problem was for our clients, and still is.
It boils down to selling something different
What sets us apart is that we gather the data footprints of millions of firms and apply machine learning to predict which companies will buy from which firms. We’re not selling raw data, as our competitors do; we sell a solution: Gi powers your marketing and sales activities. The more you use it, the better it will be and the faster your company will grow.
Getting the building blocks right
We have our own classification system: a real-time events tracker that’s based on weird and wonderful buying signals such as job ads, contracts, websites, blogs, social media posts and news articles (our machines sift through massive volumes of text). We also look at email traffic, road traffic, desk space, number of PCs online, online ad spend and more.
Ditching old school marketing techniques
Most businesses around the world are taking an out-of-date approach to understanding and targeting their marketing. They rely on government information which is old, survey-based and awful.
What’s more, 99% of companies in Europe and the US cannot hand-on-heart say they truly know the size of their total addressable market. If you find one that says they do, ask them if they’re using a traditional data provider who uses Standard Industrial Classification (SIC) codes. Then, tell them 33% of businesses have an ‘other’ SIC code.
B2B conversion rates are generally pretty abysmal. But, due to our fabulously complex model, we’re able to improve conversion rates for our customers by helping them target prospects who are most likely to buy.
Learning how to stay agile
Building a business is similar to studying like crazy to get good at something, then having to abandon it to start on the next thing. As soon as you get good at sales, you hire a head of sales to take over; as soon as you can do the accounts, you hire a financial controller, and so on.
Moving fast comes with the suspicion that everything’s out of control. Having an advisory board is one way to mitigate this feeling and it’s been critical to our business’s success. It’s essential both to have one, and to listen to their advice.
Find out more about Tom Gatten and Growth Intelligence by visiting: www.growthintel.com
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