Pertinence: A software start-up at a crossroads

By late 2003, Amelie Faure had more than enough reasons to question her judgment in becoming CEO of Pertinence only a month earlier.

by Filipe Santos
Last Updated: 23 Jul 2013

The Paris-based software firm had obvious technological strengths and she had been attracted to the quality of its world-class R&D team. However, a palpable lack of direction had led to the recent resignations of both founder and COO. Some senior employees were getting itchy feet, and all three of its current major clients' software licences were up for renewal.

Filipe Santos, assistant professor of entrepreneurship, considers some of the difficulties that can be faced by a start-up firm promoting a product too new to have developed any market reputation. For Pertinence, trying to adopt the best marketing strategy for its core product, the Rule Maker data analysis software tool, would inevitably be a trial-and-error process. Rule Maker was very easy to deploy, and there were no direct rivals with comparable technology. But there were a host of alternative solutions for the needs of the types of industrial clients the firm wanted to attract.

The case describes the gradual development of the marketing team's concept of what Rule Maker essentially was, and which types of industries it was best suited to serving. Since Rule Maker had no track record, most clients - mainly in the French auto industry - asked for three-month trial periods, along with consulting support. While most customers seemed quite happy, too few signed up for regular software licenses.

When Pertinence's pilot client, a major multinational, decided not to renew its contract despite Rule Maker's technical suitability, a major change of marketing tactics became unavoidable. Management decided to move from a problem-solving to a solutions-based approach. This meant that the marketing team would have to be trained in a totally unfamiliar sales methodology.

Faure was brought in by Pertinence's venture capitalists to turn around the young start-up. She was determined to learn from recent marketing failures, and instigated what she felt were critical short-term actions. Chief amongst these were a thorough assessment of Rule Maker's sales potential in order to come up with a new strategic plan.

The CEO and her team reviewed all client engagements the company had entered into since its founding. She hoped to be able to scrutinise the effectiveness of each sales process, ascertain the value delivered to clients, and their feedback in order to appreciate better the potential of various largely untapped markets. This critical learning process led to some very interesting findings. Top amongst these was the realisation that what had long been thought of as Rule Maker's key advantage - how relatively simple it was to use - was in fact very much a double-edged sword.

The case concludes with Faure pondering some very difficult decisions. Absolutely first and foremost was defining a clear business model and a new marketing strategy. After careful deliberation, she decided that there were four feasible business models. However, each model would require a different type of organizational structure, and a different set of organizational competencies. The CEO had only a month to develop a successful plan based on one of these models if she hoped to convince the venture capitalists to maintain their support -- and to offer another round of desperately needed financing.

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