Lesson for the day: Transitioning a business from one strategy to another strategy can be harder than you think.
Vertigo Group, now Vertigo Digital Displays, had been established for over six years prior to my partners and our investors, along with the co-founders, acquiring and re-structuring the business over the past six months. The company had been designing, manufacturing and delivering out-of-home and outdoor media enclosures (largely static back-lit) for the largest outdoor media companies in North America, and during our due diligence it was clear they had built up substantial trust and loyalty with their customers. 

In the last couple of years, these outdoor media companies had increasingly demanded digital displays inside these media enclosures. But the media and street furniture industry is primarily driven by infrequently awarded, long-term contracts with cities, airports and rail systems, yielding RFPs for new media products, often with unique requirements from project to project.

So as we developed the investment thesis and business plan around the new company, what we determined was that we would need to design our business to be able to respond to this type of project-based demand, while standardizing our products for efficiency and cost-savings. This way we could potentially open up new markets and channels which could take these solutions we had designed and built and apply them in new ways. It's not quite like "having your cake and eating it too", but it's close.

What we are learning is that, in order to transition the strategy of our business, it means that some opportunities and customers, processes and perhaps employees or partners, may no longer fit the new strategy. No one likes to lose a customer and I am always reluctant to give up on trusted partners or employees, but something's gotta give.

We can improve this situation in many ways, including choosing the speed of the transition, being flexible with certain stakeholders as they work through the transition, and being smart about managing the financial aspects of the transition. At the end of the day, if you are shifting the strategy of your business, it means by definition that what your business looks and acts like after the shift has occurred will be significantly different than the previous business. In this technological era, change is inevitable and often for the better, but that doesn't make it any easier.

Cheers,

Brad