Blend of skills yields overseas sales

Steve Davis says NZ companies need to market aggressively in the States. Photo / Glenn Jeffrey

Author-IT Software Corp exemplifies what can happen when you marry the vision of an inventor with the stoicism of a professional management team.

The outcome is a company with an ambition to hit $100 million in revenue within the next five years.

It's a big goal for a company that has humble roots. When founder Paul Trotter sold the first version of his software over 13 years ago via the internet, he didn't hit the jackpot overnight. What he managed to do was introduce structural shifts to how authoring software was designed. Authoring software is used to produce content that can be used in various ways, for example in web pages, or help pages.

"What he had intuitively come up with was a different way to solving problems faced in the process of authoring documents," says Steve Davis, president of Author-it. Davis was hired in 2006 to help push through the company's strategic growth plans.

For years, companies producing authoring technology had been fixated on the concept of reproducing the typewriter. Trotter, who was then working as technical writer for a telecommunications company, had spent many hours trying to unlock the key to working with an existing document.

Out of his own frustrations dealing with the complexity and clumsiness of moving the content of an existing manual into the help system he was building, he decided to spend weekends and weeknights working on the first version of his software that would solve some of technology gaps in authoring documents.

Past technologies were mostly trying to perform word processing. Trotter built his software to function more like a depository to store data which could be saved and retrieved. With Author-it software, users can write content in small pieces which can be multi-referenced, indexed and reused for multiple document preparation.

Author-it was founded in 1996. Five versions and 13 years later, it sees itself as being able to do for document authoring what financial software can do for accounting. In 2007 Author-it was included in the Deloitte Technology Fast 500 list for the Asia Pacific region. In April this year it received funding from the Foundation for Research, Science and Technology to develop a more powerful version of Author-it. It now has 3500 clients spread across 50 countries.

Headquartered in Albany, 95 per cent of its sales are overseas, mainly in the US (about 60 per cent), Europe (mostly in Germany and Netherlands) and Australia.

"The concepts Paul introduced were so extraordinarily sound and innovative, he has developed a group of zealots [who are clients]," Davis says.

The immediate challenge for Author-It is making it through the economic recession, particularly since its clients - many of whom are Fortune 500 companies in the US - are caught in the downturn.

"And like any high-growth companies, cash and resources are always going to be a challenge if we are to grow organically," Davis says.

Although the company has had many approaches from venture capital funds for investments, Author-it prefers to concentrate on building a more solid framework for growth first before tapping venture capital.

This company has been profitable for its entire life and has some real battle stories to share. The US is a highly demanding market with an extremely harsh compliance regime, Davis says. "The landscape is littered with the carcasses of software companies trying to make it [in the US]."

Companies aspiring to sell in the US have to be aggressive in positioning their marketing message. "You will succeed if you have a product that has a unique selling proposition that can help save cost and money. You must have a tight method of communicating that - here's the ROI (return on investment), we can help you save that much money, and here's who we have done it for. The message has to be tight and compelling."

Kiwi companies are at times too "understated" for the US market which is used to aggressive marketing, Davis says.

Companies also have to be committed to investing in the US to gain user confidence. "We did our research. We attended trade shows and used a lot of the information to build our product. Before you go there, you need to prove that you can sell - American companies like references - you've been there, and done that."

A local presence is a must, he says. Author-it made heavy investments in the US. It used resellers to distribute Author-it when it started but now has its own US sales team.

Davis and Trotter divide their time between the US and New Zealand. "That's the challenge. It is not an option not to be in the market," says Davis.

From this year on it is hoping to see the results of those investments - in the form of increased returns from its sales team and from the leadership put in place. It is also busy structuring itself internally, to be ready for future investors.

Davis, a professional manager, joined the Navy at 17 and quickly rose through the ranks. Six years away from a pensionable age, he left because he realised he had hit the ceiling in the Navy. He re-engineered himself through business education, built a career as a professional manager and has spent nine years working with US, New Zealand and Australian companies, helping them expand.

Davis says the founder, Trotter, is a visionary who realised he needed a professional manager to help him.

The dynamics between Trotter and his professional team works to Author-it's advantage, says Bill Hale, partner at Deloitte's Tax Services, who has closely followed the company's development. "They seem to have married this well - the mad inventor plus management team with a world focus."

Hale also believes that Author-it's success has a lot to do with its professionalism. "They have taken a long-term view to build a business - a world leading one - that would last." This, he adds, is different to many in the IT industry who build a business with an exit in mind.

The challenge now, Hale adds, is for Author-it to continue funding the business in the midst of a US recession without the advantage of deep pockets that bigger players have.