Last Breath for Vernier? or How to do a startup reset

It's not easy to reposition a startup in a market. Once is tough, twice.. very difficult. Vernier took their Nessus-based vulnerability scanning offering into the NAC direction in 2005/2006. Now Vernier is repositioning themselves as a user access control auditing type of solution. I take that as a pretty strong message that NAC hasn't worked out all that well for them. We'll learn more about their new offering with a hinted at announcement in February.

I think what the NAC market has learned is that solving just a part of the NAC problem isn't enough. I recall envisioning NAC as a remote access problem, but very quickly realizing it was much broader than just policy enforcement at the traditional network edge. The network edge was dissolving and customers either saw NAC as a way to solve very specific problems (like controlling contractor security and access), in specific portions of the network (student campus networks) or they wanted a ubiquitous solution across an enterprise network. It was very clear early on that vulnerability scanner technology was an impendence mismatch with the needs of a broader scale NAC deployment.

Tangential moves, applying existing technology to fringe or tangential problems, usually doesn't pan out at least in my experience. While some parts of the solution set apply, products aren't architected to be highly adaptable to new domains. That's why startup "resets" are so difficult to pull off, the same way vulnerability scanner products don't make great NAC solutions. It often requires recapitalization, major technology refactoring, and retooling the business to operate in a different market space selling to a different set of customers.

I often wonder if it's more luck or just sheer will power that makes a startup reset work, in the often rare cases it does. I've only experienced one startup reset and it was successful but that was under pretty rare business and market conditions. Vernier's situation caused me to ponder, reflect, and kind of think out loud about startup reset situations. I guess this blog post reflects that bit of wandering and thinking.

Resets are a pretty low percentage play from the business playbook but the one thing I'd say that's key to success is patience. It takes time and can't be done overnight. You can't do a turn around with a half baked solution. It has to have enough substance to really validate the product and market match are viable. You can't short cut this -- it really is like restarting the company again. If the fundamentals aren't there -- getting a really tight match between product and customer/market -- it's sure failure all over again.

Patience is nothing that a lot of time and money can't solve, but those resources are usually in short supply in these situations. And investors want to put their money to work on something with the potential for a return, vs. "throwing good money after bad" so the saying goes. Ultimately the match between product, market and execution weren't there the first time. Have the conditions changed sufficiently within the business to increase the success a second time around? Sorry to say that it's unlikely. Those are just some of the many dynamics that go into pulling a startup reset off.