Friday, November 16, 2007

Trouble at TrueAdvantage: Danger Signs for Sales and Marketing Content Services?

I heard from a colleague yesterday who mentioned that TrueAdvantage, one of the early leaders in advanced sales lead generation tools, is in the process of being dissolved. No callback yet from TrueAdvantage or one of its key investors, but it sounds as if this is probably one that's for real. If so then it's not good news for the dozens of content and technology companies that have been focused on providing value-add tools for sales and marketing automation. TrueAdvantage's focus seemed to be spot-on: analysis of a wide variety of published and enterprise content sources to identify companies that are highly likely prospects for very specific types of products and services. With nearly seven years of refinement you'd think that this would be a strong winning formula for a subscription service.

But there are two factors that may have been putting extra pressure on TrueAdvantage: rapidly evolving content technologies and an increasingly crowded marketplace for value-add sales and marketing tools. Tools such as Generate are providing a higher level of semantic analysis of content to not only filter general characteristics of companies and products but as well specific analysis of content to identify where a company is in the overall acquisition process. At the same time there is a widening array of major business information vendors that are building far more sophisticated filtering tools themselves: what was a sophisticated, advanced tool for business information a few years ago is becoming an expected filtering feature for standard business information databases.

Which brings us back to an all-too-familiar theme for many content technology companies: if what your company is building is a feature in search of a marketplace you're in a deadly race against the clock to turn that feature into a real product. Many patient private investors hope that through careful cultivation they can build their sales base to the point where a feature can survive on its own as a product but without raising the fundamental question of whether there is a broad enough business problem being solved to justify this optimism. Content technology companies need to think more like electronic publishers from the start and to look beyond their software expertise to the business problems that need to be solved first and foremost. At the same time, though, publishers need to foster the entrepreneurial spirit of new content technology companies and learn how to experiment with new capabilities that might indicate an opportunity for new products and services.

But even with all of the right buttons being pushed we may be reaching a saturation point for value-add sales and marketing tools. Return-on-investment arguments premised on sales efficiency don't always add up collectively: that is, if you have ten solutions that promise a 25 percent improvement in sales efficiency, purchasing all ten of them is not likely to improve your sales efficiency 250 percent! Content technology companies need to focus more on 10x-scale solutions that will change dramatically to make any sort of major impact in a market for sales productivity tools that's facing a softening economy. Good solutions will continue to do well in this environment, but investors should be prepared to challenge the speed with which deals can be closed and expect pilot programs to play out longer as customers try to milk advanced technologies for as long as they can on the cheap before considering full-blown commitments.
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