Based on my conversation earlier this morning with Elcom’s Executive VP Finance David Elliot, I could not help but wonder if we should seriously consider broadening the definition of a start-up business.
I have of course written about Elcom in the past, including my reference to the company in my September 23rd, 2013 post “Welcome to the new era of configurable private label eProcurement solutions (Part 1 of 2)“. Specifically, I used them as an example of a company that has to a certain extent become a victim of its overwhelming success with a single first client – the Scottish Government.
As the industry has seen companies such as Coupa, Nipendo and Emptoris successfully carve out their indelible place in the emerging cloud-based market, Elcom has yet to experience similar results. In fact, by Elliot’s own admission, Elcom is stuck in a kind of limbo between what I call unlimited possibility and unrealized potential.
The issue isn’t with their technology, because there is no question that their solution has over the years delivered tremendous value to the Scottish Government. It is more a question of positioning or branding.
As the window of opportunity to become part of the new wave of influential vendors offering cloud-based solutions closes, there is a chance that Elcom might find itself on the outside looking in. A boutique company whose fortunes will be forever tied to a single client.
The question is simply this . . . what can the company do to avoid what is at least at this point, an inevitable future?
One strategy that Elliot shared with me is their focus on expanding the Elcom service offering to include supplier finance. As I had indicated in my October 2013 post regarding Tradeshift’s decision to incorporate a factoring element into its platform, this is both a smart and necessary strategy. However, whether or not it helps to create scalable traction remains to be seen.
So where does this leave Elcom – a company with a sound technological platform that has of today remains hidden from mainstream industry consciousness?
Once again, and rather than focusing on an internal change to their offering, they need to focus on redefining themselves as “the oldest new company on the block.” Or to put it another way, and similar to what MERX has had to go through after losing their biggest client in the Government of Canada, they have to redefine the meaning of the word start-up. This means that in pursuing new business, they have to forget about their past success and focus on building a new model as if they had never heard of the Scottish Government.
In short, they have to ask themselves the following question; if I were introducing the Elcom solution to the market for the first time today, how would I have to position it to demonstrate its value?