Within the CXM Interview series, we had a chance to talk to Mr. Vincent Delaroche, the founder of the first Euronext-listed tech firm, CAST, about software industry, technology trends and business transformation. He shared some useful tips for start-ups and an overall analysis of the fast-changing market.
Mr. Delaroche, thank you for sharing your insights with CXM readers.
Your company, CAST is celebrating its 25th anniversary. In the tech world, this is an immense success. How do you feel now, after 25 years in the software business? What has changed?
As Marc Andreessen pointed out not too long ago, software is eating the world. It’s a very exciting time for technology, and especially the software market. Digitization and mobility has made technology much more broadly accepted, and it’s software that really brings those technologies to life. The most promising innovations in the market today hinge on software success. For example, connected and autonomous cars are only as good as the software engineers who architect those systems. This is software that really has the potential to transform the way we live. But, under the surface, that software must be void of risk and must be secure enough to trust. That’s where CAST comes in. We’re in the business of bringing invisible software risks to the surface to keep companies and consumers safe.
This year was marked by some huge buyouts. For example, Microsoft bought LinkedIn, Facebook bought Instagram and Verizon bought Yahoo. What do you think about these changes?
As more leading corporations move to platform-based business models that leverage software-generated data, these acquisitions make sense. To take one example, Microsoft has acquired a very successful platform already populated with people who are in its target enterprise market. The big question is whether Microsoft can integrate its existing products and services with this platform to grow revenue from this network exponentially rather than linearly. For instance, how does Skype add new revenue-producing capabilities to LinkedIn? How can LinkedIn help Microsoft provide more targeted offerings based on demographics?
In any case, these acquisitions mark telling moves by some incumbent players to modernise their offerings. We’re seeing this all over the market, and they’re creating opportunities for companies to come in and provide objective software measurement that helps these CIOs and IT teams prioritise and deliver value back to the business faster.
In 2006, you moved the entire leadership team from France to New York. What was the reason you left the EU? And what are the substantial differences in running business in USA and EU?
At that time, we had developed the business across Europe and our plan was to expand to the US, as this is one of the biggest markets for software. The idea, actually quite basic, was to be on site to be able to recruit the talent we needed to penetrate the NA market and meet as many prospects and customers as possible. Being based in Paris and building a business in the US makes little sense.
In the spirit of the changes UK companies will face after the Brexit vote, do you have any advice for them that could help them on the road to transformation?
There are currently some interesting things going on in Europe following the Brexit vote. Leaving the EU is going to cause a political mess. However, I don’t think Brexit is going to have a huge impact on the small and mid-size tech leaders who tend to be the fastest-growing, because European or not, great technologies remain great technologies.
On a general scale, I think creating long-term customers should be of utmost importance to all businesses, whether you are on the road to transformation or not. Continuing to get those customer wins is extremely important, and they are critical to long-term success. Then, you must also hold the line, stay focused and don’t listen too much to technology “sirens.”
Trying to make something happen rather than showing up at the end of every battle to celebrate the victory is for me the true definition of entrepreneurship. Finally, you need to make sure you hire top talent who are not only smart but also loyal to the company’s cause and will stick with you through challenges and growth periods.
Do you recognise any tech trend that will mark the following period?
With technology infiltrating every corner of the market, there is no question we will see demand for more objectivity and transparency in the IT / business relationship. It’s not only imperative that software teams are able to map their productivity and quality to business outcomes, but those outcomes will need to be moderated and regulated by institutions that guarantee minimum risk and safety.
I believe in the years to come, we won’t be able to sell software without a “quality stamp” showing to the buyer what’s inside, and guaranteeing it’s safe, resilient, secure, efficient and green. The same way we check nutrition facts at the grocery store now, we will check for a “bill of health” in our software.
Any tips for the people who are just starting their business in the software industry?
Today, between 80 and 90 percent of startups fail. One of the problems is, CEOs have become too focused on their exit strategy and don’t spend enough time to generate innovation which is needed to make an impact in the market. To create a true, disruptive change, it takes time and a long-term commitment from CEOs and investors. So to be more successful, I would advise anyone who just started his or her business to surround yourself with good people and unify your employees around a common strategic goal.
Mr. Delaroche, thank you for your time, keep up the good work.