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Developing 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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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.