Recombo 2005

Brad McFee tries to make a compelling case for his company.  They seem to have gone through early growing pains about how to position themselves as a product or service company. He talks about a year of transition.  They seem to have a product which up until recently was not being purchased “off the rack” but is now being better represented to customers.  I would like to see more discussion of this boxed product and what they think it’s potential is as it stands, without customization.  It sounds as if Mind Leaders got a customized product. How much in sales have been attributed to their boxed software?

Mr. McFee proudly discusses their new, large partner – Lighthouse Publishing.  He seems very optimistic that they will share their 700+ customer base with them.  He is perhaps a bit too optimistic.  Will Lighthouse risk losing a customer of their own for a small incentive?  I worry that he underestimates the corporate change the doubling of a small workforce can bring.  An expansion from 12 to 22 in a few weeks is extremely rapid and it will not be seamless.  As the number of staff doubles there will be a friendly period where everyone sizes each other up followed by internal re-positioning struggle as old and new employees ‘stake their claim’ to areas of the business they deem important.  Hopefully, their HR department is adept at interviewing for ‘fit’ as well as qualifications.

Innovation in b2b programming is fleeting.  Unless Recombo can get a boxed product out which fits a needed business solution they will be customizing to prove the product works but not really producing a product that has a high enough sales potential.  Very quickly someone else can (and will) customize a single solution for each of the larger customers leaving the market shallow.  India and China are producing a generation of very savvy programmers who will be cutting into Recombo’s market with one off, customized solutions for less.

If  Recombo could show me a large customer base to sell boxed software into and could show me it would need little or no customization then I might consider investing.  I would have to make sure my exit strategy matched theirs or there may be issues about when to sell the company.


1 David Vogt { 09.16.09 at 8:39 am }

One of the most fascinating things about Recombo is to compare this pitch to what you see on their website today. Recombo is still around, but Brad McPhee is no longer with them, and their business focus is now entirely on digital contracts. The point is that great passion, innovative technologies and solid focus don’t always conjure profits – a good company is one that is flexible enough to reinvent itself continuously…

2 Sharon Hann { 09.18.09 at 9:42 am }

I did notice Recombo has indeed found a ‘boxed’ product to sell – contract software. I also notice Brad was not listed anywhere. I didn’t want to be a ‘spoiler’ so didn’t post it. Enthusiasm does not always produce success, but it helps. The road from idea to profit is a long winding path. Sharon

3 davidp { 09.21.09 at 9:54 pm }

I think you’ve captured a nugget of truth about product-based businesses, Sharon.

It is the scalability of replicable products that makes the money while you sleep, so to speak. Your comment about having to customize the product as a negative aspect of the pitch underscores the inhibitor to success and scalability in this one.

The latest Recombo product fits the scalability criterion much better.

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