We Tried to Be All Things to All Customers -- and Failed

Last Updated Jul 29, 2010 1:24 PM EDT

By Paul Hager, Partner at Information Technology Professionals, LLC, Madison, Wis.
When my first company launched with a new technology to translate voice to text, we got some attention early on, and a few big companies expressed interest in our product. Then we got a little star-struck with the possibilities -- that was our big mistake.

We veered away from our original business plan and expanded beyond our capacity, and never completely developed any one technology. That blunder ultimately determined the fate of the company.

Changing who we were for any customer with cash
Our original idea was a strong one. The law firm where I was clerking didn't have voicemail because, for legal reasons, the firm wanted a text transcript of each voicemail message. I created a technology that could transcribe any voice to text, which had been a barrier in previous voice-to-text models. A partner at the firm offered to back me financially. We called the company VoVision.

We immediately found that we would have to tweak the technology for different customers. Different businesses have distinct transcription needs: A doctor recording patient notes needs a particular format, a court transcription needs to indicate each speaker. Initially, we thought that we would just handle translating the text and the customer could adapt it for their particular use.

Early on, a medical transcription company that heard about us from a business contact approached us with real money. They had a specific set of needs requiring specific software development. So we decided to create and brand different versions of the product: VoVision Voicemail and VoVision MD.

Already we were veering off the track we had originally envisioned, which was translating voicemail. But the medical company had cash in hand. My tendency was to go with whoever yelled the loudest because we wanted to make as much money as possible as soon as possible.

The problem with no focus
Two-and-a-half years later, we had four half-finished products, instead of one fully developed and marketed product. We ran into the same core problem with other customers: They all needed specific features, and because of our limited resources we could only deliver 70 percent of what they wanted.

None of these products ended up selling because customers demanded a completed final product. A customer is not going to say, wow, you're 70 percent of the way there. They just care about getting a complete solution to their business problem.

Because we spread ourselves too thin, we weren't able to realize the technology's full potential. In retrospect, we should have put the few resources we had into fully developing one item. Because we didn't, we wasted time and money -- and we hurt our image.

We did get close to selling the technology to a large phone manufacturer, who helped us fully develop the product. The company's key executives were set to include our technology in their next product line -- but they had a bad quarter and pulled their money. Ultimately, they focused on their core product line, and our product did not fit. We should have stuck to our core product line as well -- if we had, we would likely have been more successful.

After that, I stopped working on VoVision. I'm still hoping to sell the intellectual property rights to our concepts when the right person comes along.

Learning from my mistakes
Today I'm part-owner and CEO of Information Technology Professionals (ITP). ITP is a professional service-focused IT firm in Wisconsin. We have 10 employees and about $1 million in annual revenues. The goal is to bring in $10 million five years from now.

Like VoVision, ITP could have gone in many directions. To avoid spreading ourselves too thin, we focus on a niche we know we can serve better than other IT firms: IT for lawyers. So now we vet any new idea or opportunity against two questions: Does this grow our core business? Is this something we can do better than other organizations?

It can be tempting to break out. For example, we've been approached with opportunities to sell phone systems -- the physical phones, as well as programming voicemail options -- but decided against pursuing them. We have learned to stick to our core focus and do what we do best.

Paul Hager has run four different companies since 2004. He keeps a little black book by his bedside in which he records new business ideas that come to him in the middle of the night.
-As told to Caitlin Elsaesser

Resources