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Course: Entrepreneurship > Unit 1
Lesson 11: Dave Smith - CEO & Founder of TekScape ITDeveloping Value for the Product
When Dave Smith came to the harsh realization and he alone was in charge of his future, he took a resourceful route to become an expert in his field. Mixing the desire to make it with the imagination to fake it, he went to great lengths to connect with TekScape IT customers and make them believe that his tiny organization was big enough to solve their trickiest problems. Created by Kauffman Foundation.
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- Hi I am having a problem when I am trying to replay the video.
Could you please check and inform me about it?
Thanks(1 vote) - He says they do "IT consulting services, managed services, and information technology services." What does that mean? Can somebody please explain to a non-technical person what the companies that use TekScape actually need done? Thank you!(1 vote)
- Thing like the kind of machines they use are always going to have an error or two during it's time, and they want to hire people to stand by for whenever that happens.(1 vote)
- May someone correct me if I'm wrong, but do you have to choose a specific place to begin the business depending on which kind of business it is? And if so what is the reason for that?(1 vote)
- Did anyone notice that one of the dates on the calendars shown in this video was Friday the 13th?(1 vote)
Video transcript
- My name is Dave Smith, the name of the company is TeKScape IT. We're primarily focusing New York City, We do IT consulting
services, managed services, information technology services
in and around that market. It used to be that you would provide this thing called Staff Augmentation. You would hire an engineer, you'd pay them a certain
amount of hourly rate, they would sit on site a
certain number of hours. And then that manifested
itself into, "Okay, I only need one day, a month or whatever, to have this person come on site." And then it manifested itself into these managed service plans or managed service businesses. So my business, we sell
network infrastructure, phone systems, managed service plans. The product would be something
like a network infrastructure or a phone system that you
would purchase for business, can be anywhere from $10,000
to a million dollars, depending on the size of the organization. Then we would sell professional services to be able to install
that product and deliver it to every endpoint in your organization, for however many offices that you have. And then we would sell
a managed service plan on top of that, and we would provide advanced support for them. I need to develop a value to
the product that I'm selling. It's not like I'm selling an apple and the apple is the same
you can buy everywhere. I'm selling a solution, and
that solution has to be sold at a higher level because, they
need to understand the ROI, they need to understand more
management business aspects than a technical person would understand about the Meg, the speed,
the gigabits, and so forth. We don't focus on people
that are 50 user companies, we focus specifically on
advanced technologies, because that's where the market is. We're growing so fast,
because that is the focus of our organization. We're not focusing on a small market. We have very well known clients
that are doing call centers for all these major organizations. If they're down for an hour,
it cost millions of dollars. So what we charge them is a
fraction, for us to be working through the night to be able to produce and make sure that it's up and running. We spend money on internal
costs, like laptops, internal infrastructure for
training people, demo area so we can show clients,
all the things that we can and can't do. The most difficult thing to
spend money on is positions within your organization
that don't generate money. That's the most difficult
decision to make. And I'm going to hire
this project manager, but he doesn't directly
correlate to $1 amount, unless I sell a project. Every two weeks, you're
reminded of that dollar amount. We have two floors,
Manhattan, it's expensive. You can fake it, but at a
certain point, if you wanna grow, you need to have the
credibility behind it. You have to have the name,
the technical expertise, and you have to have the space, you have to be able to
demonstrate what you can do. Any sort of IT service based
business has have grown exponentially since 1996. We've grown nationally and internationally over 5,000% in five years. I mean it's tough at a
certain point to like, keep the numbers up there. Because when you're talking
millions of dollars, the multiple millions of
dollars is much more difficult to be able to accomplish. To keep that growth, you
have to have an aligned mission statement, you have to
have an aligned business plan of what you're doing. And this has been a struggle
for me over the last five years because, we started very scrappy, I'm looking for whatever
opportunity that I can ultimately get, and I wanna deliver that product. You're fighting for whatever
business that you can get, but at a certain point
or you have to change, to the growth phase where
you're strategically making decisions to grow
the company much bigger. So that is a very different dynamic, that you have to change and
you have to be able to shift.