As a young technology company grows, the amount of time and effort spent on the actual technology is gradually replaced by other tasks such as operations, marketing, sales and management. When a new startup hits the $1 to $2 million turnover mark it has generally proven its technology and that a market exists for it. The next phase is to build upon early successes and drive further growth and scale. Moving the company forward at this stage requires a unique management structure and skill to implement this successfully. In the figure below, we try to portray the role of senior management restructuring, project management and operations and marketing/sales leading into profitability. Remember that this figure is focused on helping companies reach $10-15 million in turnover.

At the head is senior management. In many cases the CEO Founder (who is generally from a technical background) may want to step aside into a CTO (Chief Technical Officer) role and bring in an experienced CEO to take the company through to the next phase of growth. Having a strong CFO will bring in financial discipline and capital injection options to fund further growth. The senior management team must posses the leadership skills to steer the company through change to fuel growth. The senior management team must be comfortable in driving change throughout the organisation and be able to articulate the company’s shared goals and vision to its employees.

Sales are the lifeblood of a profitable organisation. A growing company must create a sales and marketing team capable of a) executing on a practical marketing strategy and b) being able to foster to the right growth environment to make it happen. Too often, we see sales teams and marketing teams separated and not working cohesively in the same direction. Sales teams need input into marketing activities and the marketing department needs to be able to practical and usable market knowledge to their sales teams.

One of the problems faced with growing technology companies is that as the number of projects (internal or customer facing) increase together with the number of people involved. This adds complexity in the operations and communications among staff, and can lead to a lack of focus and inefficient use of resources. One method is to control this is to create a project management discipline that will co-ordinate business activity and business data in order to oversee the scope, schedule and cost of projects. This can be a huge cultural shift for the founders and the initial technical team as there may have been limited project administration in the past and will now be expected to report to a new office / project administrator. There should always be a delicate balance between innovation and control. Like it or not, it is an essential part of the growth DNA in every emerging technology company.

So, in conclusion, change must be driven by a strong, talented management team; sales and marketing must work together to improve the “top-line”; and strong project management discipline will improve the “bottom-line” and therefore grow the “most important line:” profitability.

The thirst for knowledge, entertainment and communication online continues to. Internet technology has evolved from being primarily a text based medium to a rich multimedia channel for its audience. So why is video growing so rapidly on the web? I believe that online video is replacing TV as the primary form of entertainment. This trend will continue to grow as more content producers use the Internet as a primary means of distribution.

To understand the potential of video I hypothesized that the online media consumption habits would, in the long term, mirror offline media consumption habits. One basic metric to measure consumption habits is to examine at advertising expenditures. According to TNS Market research, year is the US advertising expenditures for all media in 2005 were:

So that we compare apples with apples I have grouped offline media into text (newspapers, magazines), audio (radio) and video (TV) based offline media. Thus we then get the following breakdown:

So if we assume that the online viewing habits will mirror online viewing habits expect to see advertising expenditures to be split is roughly the same way. Total US Internet advertising expenditure for 2008 is projected to be $25.9 Billion and currently online video accounts for a tiny $1.3 Billion (Source:eMarketer). This represents just 5% of the total US Internet advertising. In comparison, offline video accounts for 44% of total offline ad spend. If we extrapolate these findings we see that video has the potential to be worth approximately $11.4 Billion in the US in 2008. In other words, there is over $10 Billion in unrealised potential in online video right this minute.

This is why online video is so hot right now.