DECISION

Equipment Co. manufactures fluid management and metering systems that are the go-to choices in the aviation, agriculture, and oil and gas.  But after years of supply chain disruptions and manufacturing issues, they were without the skills or portfolio required to grow.

Owned by a PE-firm, the company faced a growth was a mandate that required $6M in net new revenue within 3 years.  Recognizing the dual need to grow while operating lean, Equipment Co.’s leadership team decided to grow through adjacent innovation: developing new products for current customers and/or finding new customers for existing products.

REASONABLE RESISTANCE

Due to supply chain disruptions, Equipment Co. had spent the last four years digging out of a backlog that had grown from 6 weeks to 48 months.

But even though they now had the time and need to focus on new revenue, they had only ever grown by building solutions that customers requested.  

If a customer asked for something in a sales call, they built it.  Sometimes they were right.  Sometimes they weren’t.  Most of the time, when they presented the new, fully-developed product to the requesting customer, they heard that it was nice, or interesting, but never closed the sale.

Eventually, the organization stopped listening to customers and started focusing only on improvements to their products and processes.

ACTION

MileZero worked with Equipment Co. to identify market opportunities, gain accurate and actionable customer insights, and prototype ideas.  The rule was simple: prove demand before spending real money. 

• Started with 100-plus raw ideas and narrowed to a dozen worth pursuing, in two adjacent markets
• Worked backward from the revenue target to name every assumption that had to be true for each one
• Tested the deal-killers first, through customer interviews, concept tests, and rough prototypes, so the weak ideas fell early with minimal time and money spent
• Built a step-by-step process that validated each opportunity before moving to the next tranche of investment

RESULT

The first year, they booked $25 million in net new revenue. Four times a three-year, $6 million goal, in a third of the time. They also built:

• A validated pipeline worth $100 million-plus in two adjacent markets, each with real evidence of demand behind it
• Proof, before scaling, that customers wanted these offerings, would pay for them, and that the company could build them
• Customers who went from placing orders to helping design what came next

CAPABILITY KEPT

Equipment Co. kept a repeatable way to find opportunities and test them without betting millions of dollars and months of time.  In fact, a year after we worked together, they launched their first software product. It exceeded its revenue goals.