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Case Study

Software maker gains ground picking battles Add to ...

THE BACKGROUND

With a business degree and an IT background, Patrick Langlais felt good about the prospects of Kleinmundo; a niche software company that he founded in 2006 which specializes in providing data transformation solutions law firms.

Working as a consultant, Mr. Langlais had seen law firms moving towards more efficient business models, which required better solutions for their time and billing needs.

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Kleinmundo's Datalenz software provided law firms the ability for enhanced analysis, performance measurement, accurate client-formatted billing and conflict of-interest reporting.

He financed the venture through bootstrapping; securing a line of credit against his house and using credit cards.

THE CHALLENGE

The challenge he faced was that his major competitor was a Fortune 500 company with over 100,000 employees and a war chest of marketing dollars. He focused his strategy on "picking his battles" as he could not confront the competitor head-on.

His strategy consisted of five key pillars:

  1. Hire smart, hardworking individuals who could under-promise and over-deliver to the clients.
  2. Skip the Canadian market at first and start by selling to the U.S., where three quarters of the world's largest law firms are based.
  3. Focus on cities which had a high concentration of geographically clustered law firms. This allowed him to lower his customer acquisition costs and also helped in getting excellent referral business.
  4. Instead of using the typical sales model which relied on a sales team to close the deal followed by an implementation team, Patrick hired people with complimentary skill sets who could do both the selling and implementation of the software. They focused on selling to "people" rather than "companies" allowing his employees to build relationships with his clients. '
  5. Rather than building the entire software suite - which would have required significant up-front cost - he decided to use an incremental approach by building those modules which would sell and add the bells and whistles later on as cash flow improved.

By doing this, he was able to carve out a niche of clients, which was able to provide him a solid cash flow and client base to build on.

THE RESULT

The strategy is paying dividends. With a list of over 30 clients, the company has seen over 80% of new business generated through referrals. Through using an incremental software development strategy, Kleinmundo has been able to efficiently incorporate client's wish lists into their program. By offering discounted software to clients, the company has partnered with law firms to test the new software modules, saving significant money and time to market.

Sales are expanding to Canada, Europe, and across the U.S. as Kleinmundo's software is now being seen in the industry as a solid alternative to their Fortune 500 competitor. As his business grows, Mr. Langlais is gearing to scale-up his model to accommodate the increasing client base.

Nauman Farooqi is an associate professor and chair of the Research Ethics Board in the Ron Joyce Centre for Business Studies of Mount Allison University.

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Your Business website.

 

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