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Market Research Drives Revenue … & revenue increases VC investment. Richard A. Langevin

Market Research Drives Revenue … & revenue increases VC investment. Richard A. Langevin Langevin Management Advisors Tel: 508-650-3916 Email: RALangevin @aol.com. Langevin Management Advisors.

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Market Research Drives Revenue … & revenue increases VC investment. Richard A. Langevin

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  1. Market Research Drives Revenue … & revenue increases VC investment. Richard A. Langevin Langevin Management Advisors Tel: 508-650-3916 Email: RALangevin @aol.com

  2. Langevin Management Advisors • Develop business strategies and implement plans that assist companies to …produce fast and significant revenue results. • In one year, increased sales from $0.5M to $14M for a five-year old, high tech company; • In one year, achieved profitability for failing software business. Within three years, increased revenues 50%; • In three months, developed the go-to-market strategy for a startup that resulted in a successful $30M IPO.

  3. How were these results achieved? • Same products • Same employees • Same market conditions • Same competitors Answer … MARKET RESEARCH

  4. Market Research - Case Study Evidian - enterprise, network management, & security • Competition … IBM & CA • Needed to create a new “sandbox” • Identified weaknesses in competitor’s offering, and strengths in our offering • Developed new entry point into the market • Crafted new marketing & sales strategy • Results were dramatic …

  5. Market Research - Results BEFOREAFTER • Engineering: $3M $1.4M • Promoting/Selling: $2M $.1M • Market Research: $0.1M $1.5M • M/E Ratio: 0.03 1.1 • Ave. Sale: $10K-$50K $500K-$1M • Sales: $0.5M $14M • Customers: none Microsoft American Express AGEdwards Ericsson Sprint

  6. What was done? • Reduced Engineering & Promoting and Selling • Increased Market Research • Reviewed product & strategy with Industry Analysts • Conducted focus-group sessions (one way glass) • Crafted new promoting & selling strategy • Developed new collateral • Implemented new selling approach

  7. Today’s Reality… • In Q203, VC investing hit a five-year low. • Annual average VC fund posted an average 29.1% decline through March 31, 2003. • In Q203, N.E. investments compared to Q202: • VC funding: - 29% • IT funding: - 19% • Biotech funding: - 34%

  8. November 2003… • Battery Ventures reduced their $1 billion fund to $850 million. Matrix Partners plans a similar reduction. • 28 other VC firms cut $5.24 billion from their funds in 2002. • 10 more VC’s cut $922 million, in first nine months of 2003. • Polaris’ $1 billion fund, will invest in 17-18 companies. - Mass High Tech, Dec. 1-7, 2003 issue

  9. Translation … • VC’s are seeking investments with a higher probability of success. • Demonstrated sales performance increases VC’s interest in a company.

  10. Know Your Audience • VC’s don’t care how your airplane flies. Demonstrate that your Go-To-Market strategy works! • You need to convince VC’s that their investment in your company … will achieve a ten-times ROI on their investment. • Revenue Growth increases Investment Interest.

  11. How to Maximize Revenue Growth? • Market Research --- • Know your product’s market • Know your audience • Explain your product in terms the customer understands … not what you want to tell them • Stay focused and persistent in sales effort

  12. Market Research – M/E Ratio • The Market Research vs. Engineering ratio of a company has a direct correlation to the success of that company’s business performance.

  13. Richard A. Langevin Langevin Management Advisors 1 Justin Road Natick, MA 01760-5565 tel: 508-650-3916 email: RALangevin@aol.com

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