What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

“ElectricBoxCo” (Angel-Backed Tech Manufacturer)

The Diagnosis

Quick Facts:

  • Industry: Manufactured Products – High Tech
  • Electronic components
  • 1 location with R&D and manufacturing
  • multiple angel investors
  • The Stucks (4): DitchRutTrafficMaze

What I Heard From the Leadership Team:

  • Management: ‘We need a ‘marketing consultant’
  • Investors: ‘We want an objective review of the company’
  • consistently not hitting sales forecasts
  • losing money
  • burning through cash
  • Management: ‘It’s only a matter of time until the market embraces our products and sales take off’

What I Found After Digging In:

This was a relatively young company that began based on technology developed by the two founders.  The dominant stuck here was Rut, which caused Ditch and Maze (i.e. limited sales, running out of cash, not so happy investors).  Pretty easy to see, but then why couldn’t they get unstuck?

DITCH

  1. Growing conflict over state of the business between investors and management
  2. Company did not have agreement at the top over focus and direction

RUT

  1. Management did not have a good understanding of the real target market
  2. Market segment they were serving was very small; company thought market was HUGE
  3. They were stubborn in their opinions about market size and potential
  4. Their go to market strategies (sales process) wer slow and costly.  Only used direct sales and a limited number of industry trade shows to reach customers.

TRAFFIC

  1. The main competitors were well established, but not formidable
  2. Due to low sales, management was ready to use aggressive pricing (i.e. give customers deals) to get new business.  This further exacerbated the cash problem.
  1. The angel investors were patient, but becoming more upset with continued losses and dwindling cash
  2. High cost of goods sold (some products sold at a loss)
  3. Limited flexibility to raise prices due to small market and competitive alternatives