Successfully commercialising software products

Hampton shows inventors the way

Hampton Shows Inventors The Way

30 July 2001

By AMANDA WELLS

Two Wellingtonians have set up a company to help software innovators successfully launch their products on the world stage.

Hampton was set up in late 2000 by Liz Swanston and Ted Thomas to give companies the assistance they need to run and expand their business.

The advice the company gives is partly based on its owners' experiences. Ms Swanston and Mr Thomas sold their Wellington-based software firm Priority Solutions to Phoenix International, a publicly-listed United States company, in 1997, after developing their finance software for export.

Ms Swanston says the company can help smooth the relationship between inventors and those prepared to invest in commercialising their work.

But the company is not a consultancy, she says.

She says Hampton has been developing relationships with venture capital companies for the past six months.

Venture capitalists can find companies they invest in are not set up to best take advantage of their innovation, and inventors can find themselves confronted by demands from investors that they do not expect or welcome.

Hampton can step in the middle and help a company organise itself to bring optimal returns to investors.

Ms Swanston says software companies can achieve good revenue growth in the range of 20 to 30 per cent - returns that are much higher than through traditional manufacturing products.

Most software commercialisation involves turning what was a customised piece of software into more of a mass-produced product.

Software companies need to be flexible enough to keep up with the fast pace of change but still need structure to help them grow, she says.

She says marketing is a key area that inventors can have minimal experience in.

Software companies need to find a distribution channel, incorporate performance criteria into the agreement, and then manage the arrangement appropriately.

Supporting customers on the other side of the world every hour of the day can bring complications not originally envisaged.

Hampton can make sure the product is scalable and that the business runs itself in a sustainable way, she says.

Mr Thomas says successful software development is about creating a repeatable product - something that Hampton has adapted to its business process system.

Organisations are given different modules for different parts of the process, which can include instructions, or flow charts, or interactive spreadsheets, as well as guidance from Hampton.

Companies have to own the process themselves, though Hampton will guide them, Mr Thomas says.

Standard agreements are provided to help lock down resellers, presentations to help win clients, along with advice on writing and implementing business plans. Hampton also gives advice on marketing founded on its experience in the market.

"Writing business plans is quite different from executing them."

He says Hampton will usually work with companies for between six and 12 months.

Kiwi companies are not good at growing their infrastructure to keep pace with their business growth, Ms Swanston says, and failure to scale up ahead of increases in demand can stunt company's ability to respond.

"Small business needs the same process as big business."

Companies often want to hit the US market, but it is very price-sensitive and on a scale New Zealand companies can have difficulty with.

Starting in Australia, Canada or other countries can be more productive, he says.

"In the IT market, competition is always close behind or already there."

Hampton has four staff.

Ms Swanston says the company's pricing is flexible in terms of the products and services it provides, and it will consider taking "sweat equity" in a company that prefers to pay with stock rather than cash.

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