Case Study #1
The Challenge:
The challenge was to quickly devise a method for a tiny company with breathtaking new technology to capture the market before competition could develop.
When Expert Advertising Solutions (EAS) first came to The Gordian Organization (TGO), it knew it had revolutionary technology, but it was uncertain how to bring it to market and prosper. The small company, part of a regional advertising agency, had only three unpaid employees, but these three people could revolutionize the advertising industry and make fortunes with their new company.
EAS was going to use its revolutionary technology to help grow its parent advertising agency into a major force in the national market. The software could cut the time and effort needed to prepare an ad presentation by 80%, and it would also nearly assure the agency any account it pursued.
Even though EAS’s technology would allow the advertising agency to grow quickly, there were two very significant problems. The first being that the firm would be competing against established and powerful existing ad agencies in trying to capture accounts. The second was that EAS’ competitors in the advertising agency industry and major software companies would rush to develop similar software. If EAS was to capitalize on being first to market, it had to have a structure and plan that gave it blindingly fast market penetration.
The Solution:
Structure to exploit the larger market
The Gordian Organization quickly saw the enormous value of the EAS technology. A senior member of the firm recommended that EAS change the business approach it had contemplated. TGO saw that EAS could be very successful not by trying to compete with other, and often much larger advertising agencies, but by using the new technology to serve the entire ad agency industry. The merits of this were quickly seen, but there was still the question of how to gain market share and still protect the technology from reverse engineering or other attempts at duplication.
The Gordian Organization devised a structure for EAS to be a technology licensing company. By licensing the technology, which was code named “Client Grabber”, EAS could quickly target agencies nationwide. TGO then structured the licensing fees on a success basis to make pricing a very secondary issue in the sales process.
By licensing Client Grabber, EAS retains total control of the software. EAS allows the licensee access to only see the “front end” of the software. This and other safeguards help EAS delay competing software coming to market while EAS established 1st to market advantages and client contracts.
Licensing and program control also give EAS a foolproof method of resolving any payment disputes... pulling the plug, so to speak.
EAS developed revolutionary technology and The Gordian Organization help structure and test the business plan. TGO wrote the final document and built the financial models that helped capitalize the company in a single round of funding.
Going against the advertising adage, TGO sold the steak, not just the sizzle
