Recap Semifore MVP Clinic: Selling To A Team of Diverse Experts

Series profile
Thinking about this using an OODA loop model – — Observe -> Orient -> Decide ->  Act

• Orient part is sensemaking — its own kind of fast learning
• Often takes a long time in a complex situation (e.g., all situations where learning is involved); subject to error because it’s “culture bound”
• What we do
  • Asking what you see
  • Asking what are interactions (including between people, process, platform, and practices)
  • focused on  asking good questions / suggesting questions to research;  avoid giving advice
• Audience: other entrepreneurs

Hosts

• Sean Murphy: https://www.skmurphy.com/blog/
• John Smith: http://learningalliances.net

Presenter profiles (see extensive write up a “Semifore Execs Share Bootstrapping Lessons and 2014 Scaling Up Plans at Jan-17-2014 MVP Clinic)

• Robert Callahan, COO Semifore, Inc.
• Herb Winsted VP Business Development and Customer Care, Semifore, Inc.
•  Semifore, Inc: niche software player in Electronic Design Automation founded in 2006 with a focus on tools for memory map management

Initial questions

• How do we scale and grow the business
• What strengths or accomplishments will you build on
• What existing or constructed vantage-points (data-collection opportunities) have been or will be most useful?
• What capabilities need to be developed
• What’s the primary barrier or key challenges you need to overcome
• talk about product and challenges –    cross functional nature
• talk about what you have learned – making sense of current experience
• look ahead 2014 talk about plans

Problem profile

• complex sales environment
• education / learning involved
• many prospective clients have rolled their own
• side issues = standards, interaction with purchasing
• Usually find a pre-existing culture / product team /  team
• more complex sales and adoption problem
  • touches hardware team (e.g. system architect, RTL developers)
  • software developers
  • documentation specialists
  • documentation consumers – e.g. verification and validation team
  • plus “team in larger team or org issues”

This is a mid-course correction conversation. We have a viable product that’s now robust

How do you scale the business?
Competitors are “in-house” solutions – first generation build out.  Semifore product replaces spreadsheets and in-house Perl scripts that represent a career path for internal tool developer

Questions from Audience 
Q: How many employees does Semifore have?
A: five direct plus some other outsource teams we draw on for specialized resources

Q: Do you monitor feature usage and see which ones are used and which ones are not? Do you remove unused features?
A: it’s on-premises software, there is no monitoring except in conversation with customer. Will be deleting some obsolete standards but have to provide a lot of legacy support and backward compatibility

John observed: consider inserting learning & feedback loops here.

Q: Do you have any services revenue?
A: We have  a hybrid license. basic level charge, tiers of users (groups of 10). we sell licenses in batches of 10 with a decreasing cost per incremental seat even as total site license fees go up. We have some project support service fees; there are also fees for “global license”

Q: Tips for growing from small groups to more users in the companies.  How to encourage spread inside customer
A: We believe the following have been key to our success:

• spend face time with customers
• dealing with the internal script-writers “who can do stuff.”
• sales opportunity: when the script-writer leaves

Q: What percentage of customers did you have pre-existing relationships with (from Magma, as an ex-employee of that company, etc.)?
A: really only first customer, most of the rest were “cold starts”

Q: Also, is the tool compelling to any functional area as is, or is it compelling primarily because there’s a lack of resources for the previous internal approach?
A: a bit of both.  solutions exist in organizations that are not visible to management.

Notes from Live Session

Walking around the issues —

Rob: in the Valley back when disk drives looked like washing machines.  Finance roles, then managing channel and tech support.  EDA for last 15 years.  External advisor to Semifore, joined the firm a couple years ago.  growing the business from boutique to a real business.

Herb: business development VP — customer facing activities. started in the electronics business back in the ’70s. Projects in Europe, Japan, US, involved with Semifore since 2008. Semifore is the “right size” for connecting directly to customers.

Have both survived and added customers.  Tool crosses several different disciplines,  enabled by high level

Some standards IPXACT and System RDL but for the most part replacing either custom scripts or Excel input based techniques.
Rich Weber drew on experience at SGI, Cisco, Stratum One to create cross-compiler
selling to sw, firmware, and documentation teams proliferating from early beach heads

Respond to customers quickly. agile response.  Keeping customers.

Initial sell to a small team.  from 10 users to 100 in the same company. tool goes viral.  education challenges to begin using the tool.  Support requests are often enhancements to connect with their local requirements.

How to proliferate. Getting information early in the design / development process. Measure speed.  Perceiving the activity outside “my silo.”  It’s a blazingly fast product once it’s in place.

Q: does tool help to measure design cycle impact?
A: It’s really a technology driven company working with engineers who focus primarily on technology, but our customers live in a business environment. more recently customers are coming in and asking for automation of the creation of these architectural descriptions. Once the tool is adopted there is a shift from create the “perfect document” to ‘good enough distributed widely’.
Semifore enables a start from a terse description that can be elaborated.  EDA Process Workshop in Monterrey – need a good plan more than a good tool

Herbie: Making the transition from supporting a wide variety of design styles to a smaller subset that the industry as a whole seems to be converging on.
Sean: similar to what happened in networking where there was a convergence from “multi-protocol” to IP and Ethernet.

As an introduction strategy Semifore offers a sandbox model.

John: have you thought about a user conference where you can share lessons learned and foster “viral process”?

• Rob: good idea, we could do it in the Valley
• Herbie: one challenge is a lot of our customers are direct competitors and don’t allow us to talk a lot about what they are doing or even that they are using it.
• John: breakfast at Coco’s might actually kick this off; talk about failure as much as glossy success. provides access to design ideas and source of marketing insights.
• Sean: first Verilog user group was very low key.  It was at Denny’s.

Rob: engineer to engineer conversations have been of great benefit, but we have trouble translating that into business impact.

• Sean: boiled frog problem- registers grow incrementally.  complexity ….  how to trigger the epiphany that “it’s getting hot”.  how describe the environmental question about increasing complexity.
• Rob: we see people saying “we can’t manage any more. please help”
• Sean: need to crystallize this customer’s business insight into tools for engineer customers at other firms (including prospects) into a compelling business proposition. Problem has scaled from hundreds to tens of thousands of registers

Sean: What is one thing that would change the equation:

• Herbie: go to next level in revenues. A potential contract on the horizon would generate more human resource.
• Rob: finalize and accurately describe tool functions, so can present / educate people at higher levels of the organization..

Q: What is your licensing model?
A:business predicated on one year licensing deals, renewals are based on internal uptake not multi-year contractual obligations. Avoids some issues where customers wait for end of quarter/year asking for large discounts

John: your great strength is your engineering view, but is this in some ways a weakness? Could you do more to see into the customer organization w/o more revenue?
Rob: A senior VP engineering has a P&L and a business view. We are a small tool in price, it’s hard to get their attention.

Take-Aways

• Herbie: this session was out of our normal activity.  appreciate opportunity.  learned working inside orgs & managing projects: the reality of business situation, putting together the fifth team.
• Rob: better mousetrap doesn’t always sell.  Semifore has good technology.  challenge is to refine the messaging.  describe “breakage is around the corner.”
• Sean:  need to explain to prospects that they have gotten used to dealing with “broken”. I think Semifore’s challenge less in engineering more making business case to pragmatic buyers.