Imanami: Moving from Nice-to-Have Products to Must-Haves
How one software firm is not only surviving, but growing.
By Jon Frandsen, Senior Editor, Kiplinger.com
May 20, 2009
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Robert Haaverson, CEO of the small California software firm Imanami, minces no words. When the economy took a sudden turn for the worse last fall, Haaverson says he and fellow managers were flummoxed and still don't fully understand what is happening. "Just when you think you have it nailed down, you get signs that you're completely wrong," he says.
But not being sure where things are headed is not the same thing as not knowing what to do. When revenue plummeted in October and November and orders were canceled or delayed, Imanami made quick cuts. "We didn't keep anything that wasn't super-needed," he says.
Two employees were laid off, their duties automated or spread around to remaining workers. Haaverson cut his own salary by 30% (he considered pay cuts for all his employees, but “I wouldn't make the number I was going for and I figured I'd just anger a lot of people”). Instead of a lavish, catered holiday office party, Haaverson threw the party at his house and did the cooking himself.
But while Imanami was getting leaner, it was also growing more aggressive. Its product lets large companies manage and track employee access to a broad variety of files, security levels and the like. Up until late last year, Imanami sold its product as a way to solve a problem and free up busy IT departments. Now, "we've changed our message,” Haaverson says. "We lead with how it will save you money. That’s paid off despite -- or perhaps because of -- the sour economy. The first quarter of this year was the company's best ever." Haaverson anticipates 20% revenue growth in 2009 with costs down about 10% -- even if, as he hopes, he is able to restore his salary.
Haaverson thinks companies that will survive the recession and a weak recovery will have to shift from products that were simply “nice to have” to those that are “must-haves." To convince customers that Imanami’s software is just that, the company will soon integrate into its product a meter that will show customers in real time how efficiently their computers are running. When the Imanami software is first installed, Haaverson says, the meter might show all red, indicating the need for a cleanup. After the new software runs for a while, the gauges gradually turn green. "Customers can see the results for themselves."
Haaverson thinks the economy has begun to regain its footing, and his company is making some capital investments. He figures businesses wouldn't be buying from him and other providers if their own customers weren't buying at least a little more. Plus, he believes money from lenders and investors is, very slowly, becoming available again. He sees signs of life from venture capital groups. So Imanami is making some capital investments -- and Haaverson says that any company with cash or access to cash should be doing the same. "It's a great time if you have cash and can take advantage of fire sales," he says. "Competitors are going out of business, and customers are up for grabs."
Next: More Case Studies for Business Survival (Coming May 27)
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