Industry Watch

Philippe Courtot, chairman and CEO of Verity Corp., is an experienced hand at turning around promising but troubled high-tech businesses. He is best known for turning tiny cc:Mail into a market leader. Here's a quick review of tech business according to Courtot:

Principle 1: When trying to determine an emerging technology's potential, listen to customers, not only venture capitalists or experts in the field. He learned this lesson when he first contemplated an attempt to turn around tiny, floundering cc:Mail. The venture capitalists pooh-poohed the technology. But "all the early adopters said, 'Philippe, this is changing the way we do business,'" says Courtot.

Principle 2: A big ego is essential, but it must be "properly aligned with the mission of the business," he says. "So rather than say, 'Let's be No. 1,' say 'Be on every desktop,' because this helps the engineer who will design the product."

Principle 3: Brand image and marketing matter. Courtot borrows from Microsoft's ad campaign, which he ranks among the best since IBM's early use of Charlie Chaplin to humanize the PC. "Where do you want to go today?" is the question Microsoft asks present and potential customers. Courtot has amended that for his firm to be "What do you want to find today?"

Principle 4: Big vision, small steps. Courtot says focusing a company on a long-term goal is para-mount in any turnaround. He focuses his company by performing a simple exercise: Pick five things you want to do, then pick one and pursue it. He then follows the path to that long-term goal in small steps.

Principle 5: "You have to be everywhere to solve the information problem." This is because every source of information is increasingly linked through the information superhighway. That means a technology such as Verity's must be embedded in all the popular programs, and distributed as widely as possible, if it is to deliver on its promise of reducing information clutter.

Principle 6: There comes a time when an employee's desire to maintain job security exceeds that employee's desire to make a company No. 1. That point had long been reached at Verity. Verity had one sales rep in the Washington area with one customer, the CIA, and she was making $150,000 per year. Courtot recommended slashing the price per seat of Verity software tenfold -- from $1,500 to less than $200. That did not sit well with sales representatives, who had a vested interest in keeping prices high to protect their commissions and high salaries -- without having to chase new business. "They were abusing the customer," he says.

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