Mike Malone, CEO, QMSoftware Australia
Kim Welsby, Managing Director, Lync Software
Welsby
How did you set about identifying a market that offered a large opportunity while also being accessible for a start-up?
Malone
There is no shortage of great product concepts in software development and most, if not all, software companies will have a list of projects they would love to produce. The trick is getting your new product to market before someone else releases your concept and turns your great idea into just another “me too” product.
In the case of our data management system Replica, we identified that backup software was not giving the market what it wanted and indeed it wasn’t giving us what we wanted to secure our data.
We thought we had some good ideas for a new product and started developing a proof-of-concept. The product quickly became a markedly different approach to anything on the market—that was the good news.
The bad news was it would take an enormous amount of effort to produce because it hadn’t been done before and was extremely complex.
We went ahead and three years later we had our first release version of the system. No other company has released a similar concept.
The commercial risk was obviously very high, and now that we are marketing the product we know that any other company that wants to develop a similar product could be as much as a couple of years behind us. Our biggest challenge now will be to see that the right people are selling and marketing the product while we maintain our focus on production.
Malone
What was the first step you took in taking your product to market?
Welsby
It was to get the product into the hands of end users. Because of our limited resources we decided to partner with someone that had existing relationships in our target market.
We researched companies that complemented our technology and approached them directly. That is how Lync Software established its partnership with Layton Technology which has sold our software to blue-chip organisations such as Boeing, Hilton, Pepsi and Time Warner.
Welsby
How did you go about entering a market fast enough to capitalise on the opportunity you had identified?
Malone
The need for speed is evident in this industry but a lot of developers have come to believe that the best strategy is to develop small applications and utilities very quickly so they can get to market fast. They expect the lifecycle of the product to be short and the profits to be big, at least in the short term.
The large solution software that requires a long production process and heavy investment involves greater commercial risk. Even though it may provide a revenue stream for many years, it is a less attractive option.
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