New Growth Platforms
As a business, it is very important to seek out new growth platforms – especially in the fast-changing world of tech. In Netcore, if we had stuck to our original product line of Linux-based mail servers, we would have long been dead! What we have done is to look at new opportunities for growth. Netcore today has two significant growth platforms: CPaaS (communications platform as a service) and martech (automation and personalisation). Even as both have plenty of room for expansion, my belief is that we will need to add one more in the coming years.
A 2006 Harvard Business Review article discusses new growth platforms: “We identified and approached 24 companies that had achieved significant organic growth and interviewed their CEOs, chief strategists, heads of R&D, CFOs, and line managers who had delivered material growth to their companies. We asked these executives and managers the same basic question: “Where does your growth come from?” And we found a consistent pattern in their answers. All the companies grew by creating what we call new growth platforms (NGPs) on which they could build families of products, services, and businesses and extend their capabilities into multiple new domains. The platforms provided a framework in which acquisitions served less as a direct driver of growth and more as a way of acquiring specific capabilities, assets, and market knowledge. These are not small, fledgling ventures that might be funded by a business unit or an encouraging executive. The scale of the platforms is strategic and material to the corporation.”
A graphic in the article explains the idea of new growth platforms:
Investing in new growth platforms will come through envisioning the future. What does tomorrow’s world look like? What will our customers want? What do current trends and consumer behaviour changes point to? What bets do we as business make to prepare for the future? Answers to these questions lead to decisions on build-or-buy decisions for the next growth platforms.
In 2014, a colleague, Veer, first mentioned the word “martech” to me – marketing technology. He had heard it in a conversation with a customer. Veer’s belief was that Netcore needed to move up the stack from communications to offering customer engagement, and martech was the core for that. Veer and I then attended a Martech conference in Boston, and that began our journey into the world of marketing tech solutions. This became our second growth platform to complement email and SMS solutions that we already had as part of our communications suite.
The search for new growth platforms is a constant one. Proficorn entrepreneurs need to spend time in this search – because their business can be one mistake away from obsolescence (or becoming part of the “living dead”, as I keep reminding my colleagues.) For the founder / CEO, identifying where tomorrow’s growth is going to come from is as important as meeting this year’s growth targets. It is this search and discovery which keeps the excitement, adventure and journey going. And one way to make that happen is via acquisitions.
Tomorrow: Part 60
