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CEO Spotlight: Mark Woodward, Serena Software, Inc.
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Angel Mehta: I know you have a sales background and so you understand the day-to-day experiences as a sales executive, which means you might be biased in answering my next question. But here it is anyway: How significant a role does the sales organization play in a companyís success? Can a good sales and marketing organization make up for a company that isnít firing in other areas like R&D?
Mark Woodward: Absolutely. You can have a great technology, but if you donít have good sales and marketing, you can get your butt whooped by simply being out-maneuvered, out-positioned or out-executed in the field. If you build a great sales and marketing organization and have an inferior product, I believe, you still have a better chance to be successful.
Angel Mehta: I find that for small software companies, they seem to have this attitude that the larger the sales organization the more likely they are to grow revenue. How important is it for a small software company to have a large sales organization?
Mark Woodward: I think itís really important. I sit on the Board of another company right now that made the mistake last year of being too focused on profitability. When I joined the Board about six months ago, they had a plan this year to be cash flow positive; this is a company thatís going to do less than $20 million in revenue. My advice to them was instantly Ďdonít worryí. If you have either the money or the VCsí backing, you donít have to worry about profitability so much in the early stages because itís much more about getting market share, mind share and just generating momentum. A great example, although theyíre having problems right now, is Seibel Systems. It was about the twelfth company in the CRM space (formally known as the Ďsales force automation space). What Siebel did differently was to spend a ton of money up front to generate market share and awareness and to make a HUGE investment in sales and marketing. The result: They just shot past everybody else in the space. In that same space, salesforce.com is generating nearly $200 million in revenue, but basically unprofitable, because theyíre spending an enormous amount in sales and marketing and are now becoming a very dominant force in that particular space.
In the beginning, you must have a story, be in a market thatís real, have a technology, and solve a problem. You must have a reason for people to want to buy you. Generating sales and marketing momentum is enormously important and Iíve seen in many different spaces where one company outgrows the rest because of it.
Another example is Mercury Interactive. It wasnít all that long ago there were three companies in this space; SQA, Segue and Mercury. Mercury shot past all of them since they invested very aggressively in sales and marketing.
Angel Mehta: What advise would you have for a smaller software company that cannot afford to hire the absolute best sales talent?
Mark Woodward: I think you need to look for ways to expand your channels of distribution through indirect sources. One of the reasons for Mercuryís success is their great relationship with Accenture, which accounts for a large percentage of their revenue. So whether itís through some kind of very strong channel-focused partner program or through some different OEM relationship or both, there are certainly ways to get your products to market, to expand your presence and opportunity without having to spend a lot of money.
Whenever we enter a new country, we will often enter that country initially through a distributorship. We find a company that will want to represent us -- and it costs us very little money to start-up. On the down side, we give up a higher percentage of the revenues, such as a 50%-50% revenue split. We tell them: You run that way for a few years and at the end of that time, you may want to decide whether to go direct in that territory or possibly acquire the distributor. It enables you to get a presence in the geography and grow your revenue without having to put a lot of money upfront to make that happen.
Angel Mehta: A lot of Sales Executives I recruit want to make the move up to CEO like you did, and of course, I understand why. But my question is, which do you personally enjoy more? Do you enjoy being CEO more than being VP of Sales?
Mark Woodward: Thatís a great question. I actually enjoy being CEO more, and this is completely non-intuitive until youíve gone through it.
When youíre the vice-president of sales, youíre basically running an organization and do very little actual selling. Selling is what I love to do and I sell a lot more as a CEO than I did as a VP of Sales, because Iím not only with customers, but Iím also selling the company to the streets, to shareholders, and to analysts.
The first couple of years I was more of a President than a CEO but I had both titles. I was much more operationally focused. I then brought in some people who are very good at sales, marketing, R&D and many other areas to be my management team and grow the company. Now, I have been able to transition myself out from some of the nitty-gritty, day-to-day operational stuff and be much more focused on the vision and future of the company. Iíve enjoyed that transition; the longer Iíve been in the job the more I like it.
In 2000 Mark Woodward became President and Chief Executive Officer of Serena Software, Inc. Mark joined Serena in November 1998 bringing over 23 years of experience in the high technology industry, including 16 years in sales and sales management. Mark began his career at Serena Software as Vice President of Sales. For article feedback, contact Mark at: email@example.com
Angel Mehta is Managing Director at Sterling-Hoffman, a retained executive search firm focused on VP Sales, VP Marketing, and CEO searches for enterprise software companies. He can be reached for feedback at: firstname.lastname@example.org