What Does Scale Bring?

By Paul Starkey
Published on: July 20, 2018

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Hooray for SONOS, who is seeking an IPO at $3B. Their 5 strategies for the next level are now public information. The future seems bright for them.

In coaching our group, we explored a similar but different exercise, asking: What is missing in a sub $50M Revenue CI organization?

A few items came to the forefront when considering the impact of a central value added organization serving 15, 30 or even 75 or 100 locations. It’s more than just having more people and more revenue; it’s about conducting the business differently:

  1. Training and People Development, including consistent Sales Process and Shared Expertise Resources.
  2. The ability to own the partner channel in a way unseen so far. This makes the evergreen component of our business even greener.
  3. Significant cost reductions in everything from volume purchases, to business insurance, health plans, vehicles and more.
  4. Productivity gains in operational areas where billing efficiency and alleviation of local duties provides more bandwidth.
  5. Pick up of under performing product categories. Yes, every business has one or two. At a larger mass, these are complete upsides.

Ok. Ok. Enough said; there are numerous upticks in a well-orchestrated larger organization. And their impacts on growth and profitability are potentially profound.

Are these capable of sustaining 15 percent-20 percent CAGR (compounded annual growth) and 20 percent sustained operating profits? We think so.

The magic still happens at the local level where relationships and service remains king.

The key lynchpin becomes of course the people, the leadership and their ability to affect a culture centered on clients and personal development of professionals committed to excellence for the long term.

Without this, the best plans of mice and men fail.

Add an investment mechanism for owner/operators to cash in on the value being created and Voilà! You have a new generation of organizational prowess and a future Billion Dollar game changer.

Keep It Vital!


Paul Starkey

Paul Starkey

Paul Starkey is a 23 year CI industry veteran who led control manufacturer ELAN from infancy to a 150 person company. He is a visionary, keen on innovation, pioneer of on-line training, and numerous product innovations. He is co-founder of Vital Management.

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