Managing During Turbulent Times Jon K. Hirschtick CEO, SolidWorks Corporation MIT Enterprise Forum June 6, 2001

It’s Easy To Start A Company, But It’s Hard To Start A Business Company = people, idea, name, logo, capital, product Business = sales, sales growth, profitability growth During turbulent times, businesses last while mere companies crash

Building A Business 1) Build products that people will BUY 2) Have great instruments 3) Recurring revenue is king

1) Build Products That People Will Buy Low sales is #1 startup problem (source: my personal guess) Test sales proposition early and often No free Betas Beta test the customers’ wallet!

2) Have Great Instruments When flying through a storm, you need great instruments Create and monitor your own company ‘dashboard’ Watch the basics Have one package of information –Graphical –Trended –Actual vs. Plan

Business Dashboard Sales: Actual vs. Plan, $Million 1) Graphical 2) Trended 3) Vs. Plan Cash: Actual vs. Plan, $Million

3) Recurring Revenue Is King Great businesses have recurring revenue Ex: maintenance, subscription contracts, service retainers, etc. Drives both sales growth and profitability Start every month with revenue “in the bank” Make it a part of your culture from day 1

Recurring Revenue Example: SolidWorks Subscription Service $1,295 per year In addition to one-time $3,995 software license Technical support, upgrades, knowledge base, online content, etc. Today over 50,000 subscribers Competitors offered $400 upgrades every two years