Esri Can’t Be Stopped

Esri CEO, Jack Dangermond, at the Altar of Arc. Source.

What is Esri?

Esri is a software company that helps governments, companies, research institutions, and non-profits make maps.

ArcGIS toaster ovens, ArcGIS scented candles, ArcGIS coffins, etc.
  • 350,000+ customers
  • 4,000 employees
  • 49 offices worldwide

Patience, Rewarded

No debt. No private equity. No strings attached.

How The Beast was Built

The Dangermonds made several strategic choices while building Esri that I feel are instructive.⁴ Think of these as a Cliff Notes™ version of their story — most of the truly fascinating stuff is in the details, but unfortunately, I don’t know the details.

Become a Category King

I mentioned earlier that Esri is nearly synonymous with their software “category,” GIS. The term “category king” comes from one of the only marketing books I’ve ever purchased, Play Bigger. The basic thesis is: enduring companies market the value of their category, not themselves, and in doing so become synonymous with it.

Focus on Overlooked Markets

Esri is now famous for what I’m gonna start calling pedagogical capture. I noted earlier that universities were a large portion of their initial client base with ARC/INFO, and they still are.

Page after page of Esri contracts in the public record, most worth millions of dollars…

Build a Community

Esri was one of the first software companies to perfect the“user conference.” Today, over 16,000 people attend their annual event. Lanyards abound.

The snake pit — ahem, exhibit hall — at Esri UC, 2019. Photo borrowed from Esri’s Flickr account.

Expand by Franchising

One of the most controversial decisions Esri ever made was to aggressively partner for distribution outside of the United States. Personally, I can empathize with the decision — the difficulty of selling overseas, especially to foreign governments, is almost universally underestimated by young companies. Having international distributors allows Esri to maintain its focus on product development and domestic sales (where they have the most competency) while growing and diversifying their revenue with minimal cash investment. I’m not sure if “franchising” is technically the right term, but it captures the spirit of the thing.

Embrace Professional Services

As someone who has competed, on occasion, with Esri sales reps, I know their playbook a little. To land new accounts, they prefer not to discount the software so much as throw in free licenses of complementary products, especially if it’s a large non-profit. Sometimes, if they’re really desperate, they’ll even throw in a basket of professional services time to help customize their tools to the customer’s liking or integrate them with internal tools.

There are Worse Tyrants

Esri often gets a bad rap in the GIS world because it has so few natural competitors. It looms large over a tiny backwater of an industry that it practically created from scratch.

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Joe Morrison

Joe Morrison

Comedic relief at Umbra. Writing about maps and the people that make them. For inquiries: jrmorrison.jrm [at] gmail [dot] com