In a recent teleclass, Alan Weiss, author of the book, Million Dollar Consulting, and the Contrarian Consulting blog, gave ten tips on how to weather this recession.
One of those tips was to keep a positive mental attitude by looking for the positive in all of the negative news.
For example, although the media makes it seem like US business is going to hell – bankruptcies, layoffs, financial meltdown, and GE’s stock price down to 2! – Alan said to himself (I’m paraphrasing), “There’s no way GE is going bankrupt. Their financial business is having problems but the company makes refrigerators, washing machines, etc. They’re stable.”
So he bought GE stock and at the time of the teleclass, it was up 10 points.
GlobalLogic, Inc., an outsourced product development firm based in Vienna, Virginia, is another company that is growing in this tough economy by taking advantage of the fact that companies need to develop software – fast – but also need to reduce development costs.
What follows is an interview with John Hitchcock, the company’s VP of Global Marketing, on why the company is doing so well.
Dianna Huff: John, explain what your company does and how it got started.
John Hitchcock: GlobalLogic works with companies that develop products that they sell to other companies.
The company is in a market segment that didn’t exist nine years ago because clients believed that our service offering — software development — wasn’t something that they would consider outsourcing.
To outsource software development or take on a partnership simply wasn’t conceivable. Thanks to changes in our economy, that concept has completely changed.
GlobalLogic is now a 3,000-person company with $100 million in revenue. (We’re venture backed by VCs Sequoia, NEA, and New Atlantic.) When I joined the company two years ago, we were a $27 million dollar company — so you can see the tremendous growth. We’ve been profitable 25 straight quarters.
We work with three types of companies:
- Independent software vendors (i.e Oracle, Microsoft plus small early stage companies)
- Technology product companies such as MedTronics
- Software enabled businesses (which is our own internal term) that do business in the digital world and have Internet-based products or whose businesses rely solely on the Internet.
The Hearst Corporation and Zappos, both of whom are our clients, are two examples.
DH: Ok, got it. But why are these companies now using your services?
JH: In a nutshell: everything changes, including how companies do business.
In the past, companies never outsourced the design, development or support of software products. US and European companies are hungry for talented engineers — and for the last few years they couldn’t hire them fast enough. Before the recession, the cost of hiring engineers wasn’t an issue — finding them was problem. It could take a company 6 – 9 months to find and hire the right team of engineers.
Now, of course, cost is a real issue.
The second issue is time to market; the third issue is quality. Previously it was very hard to convince companies that they could achieve the same quality using outsourced talent.
The quality issue was critical — these are software-based products clients are selling to their clients. We had to convince clients that they would not see a drop-off in quality.
Early on, our marketing was missionary-based because the company had to convince people that outsourcing software development was doable. We had to prove that using an outsourced team would work as well as prove the cost savings, the quality, and the faster time to market.
DH: What can marketers learn from you?
JH: Pay attention to the micro and macro challenges.
A year ago, the major technology analysts were not on our radar screen because our clients were small and mid-size business (SMBs). These companies don’t have relationships with analysts.
Due to the economy, this has all changed. SMBs are hurting and cutting back on spending. Big companies, however, are spending — and they work with analysts. As these companies broaden their client portfolios, they look to analysts for advice on vendors.
Hence, a significant portion of our marketing budget now goes to working with analysts. We attend their conferences and make sure they have enough information in order to get covered in their reports.
This is a huge shift for us.
At the micro level, we’ve also changed our selling position. For example, two years ago, we didn’t highlight the cost savings of using our services – the savings was implied but not marketed.
Now we focus on how companies can reduce operating expenses by 25% plus raise revenue because they can get product out faster with more features.
DH: Are you currently hiring?
JH: Yes, we are! Right now in the conference room next to me are 10 new hires (all US employees).