HOW TO BECOME RELEVANT TO AN ACQUIRER
Steve Jobs was obviously a brilliant product designer and marketer, but I would argue that Apple became successful by becoming relevant to their customers. Take iTunes as an example. CDs were a great medium for music. They could be sold, shared, traded; customers could make mix CDs on their computer. DRM on Red Book CDs wasn’t great, but it was good enough for the mass market.
Now, imagine Apple rolling into the town square with their new pitch: “People, please give up your CDs and buy music from Apple! We will let you download a locked, proprietary file that you can only listen to on certain devices and that can’t be shared or traded. If you want to listen on a different device, you will have to download the file again or transfer it using Apple’s proprietary hardware and synchronization.”
That would have gone over like a pregnant pole vaulter. Of course, they were clever in how they created relevance. Instead of a summons into the walled garden, they offered a chic, lifestyle accessory that conveyed status and modernity—and that happened to play music. This was the allure of the iPod, and later the iPad and iPhone. Apple was suddenly relevant to the mass market, with a business model that kept them relevant. After all, once you bought and downloaded an album, or spent a gift card on music, why would you buy music anywhere else?
How can your company become relevant to potential acquirers? What is your “iTunes”?
Here’s one example. We recently worked with a client that had a really powerful mobile platform that could render grids of animated selfies or other content on mobile devices as well as manage large data payloads on the back-end. We were not naive enough to pitch them as “the next social platform.” That space is fully occupied.
Instead, we looked for companies that wanted to launch a modern, delightful and engaging mobile app, and the way that we found them was through job boards. We figured out who was recruiting in cloud compression, social networking platforms, and mobile contact management. We built out a database of everyone looking for tech resources in those areas, then we backed into M&A discussions. We understood our client’s relevance by figuring out who was actively advertising for talent in that space.
What’s your relevance? Where do you fill a relevant gap for acquiring companies?