The 59% Enigma: Unlocking Hidden Value in the TMT Sector
Imagine a scenario familiar to many in private equity. A deal team, galvanized by market data and a compelling technology or media thesis, closes an investment in a dynamic, fast-growing company within the Technology, Media, and Telecommunications (TMT) sector. The numbers look promising, the market is expanding, and the mandate from the outset is crystal clear: drive significant profitable revenue growth to achieve substantial value creation and secure a lucrative exit within the investment horizon.
Yet as months pass, small warning signs begin to emerge. The once-ambitious growth targets start to slip. Sales goals are missed, and the integration of bolt-on acquisitions proves more cumbersome than anyone anticipated—cross-selling opportunities underperform, and operational synergies fall short of expectations. The sales team appears uncertain, hampered by confusing processes, talent gaps, or insufficient training. Despite the strong external tailwinds, the organization struggles to convert potential into results. A quiet anxiety settles over the deal team: why is the upward trajectory stalling?
This brings us to a compelling puzzle: If the technology is strong and the market signals are positive, why do so many TMT investments falter when it comes to achieving sustained, profitable revenue growth? Are private equity players missing a critical component in the value creation equation for these companies, especially given the intensifying competitive landscape in Media and Tech?
The Mystery behind Value Creation
To unravel this enigma, we need to revisit the mechanics of value creation in private equity. Our internal research highlights one statistic that stands out:
Revenue Growth alone accounts for nearly 59% of operational value creation in PE investments.
This insight is particularly resonant within the TMT sector, where accelerating profitable revenue growth is paramount for capturing market opportunities at the right moment.
Often, deal teams place considerable emphasis on financial engineering and operational improvements—undoubtedly important levers. But the 59% figure suggests that enhancing the top line can dwarf the impact of cost-cutting or other efficiency measures when it comes to generating real, sustainable value. True success, therefore, hinges on establishing predictable, scalable sales engines capable of thriving amid shifting revenue models in Media and Tech, such as subscription platforms, digital media distribution, cloud-based services, and global streaming.
Where Growth Stalls
Despite the evidence for revenue growth’s outsized importance, private equity firms routinely acquire TMT portfolio companies with underperforming commercial organizations. Issues typically manifest in four key areas:
- Missed Revenue Goals: Teams are enthusiastic but often lack the discipline or processes to consistently hit ambitious numbers.
- Inefficient Sales Processes: Without a structured approach to prospecting, lead qualification, and deal management, promising leads slip through the cracks.
- Lack of Scalable Sales Models: TMT segments can evolve quickly, rendering fixed sales approaches outdated. Companies need flexible methodologies that adapt to new customer buying behaviors.
- Talent & Integration Gaps: Acquiring additional companies can promise cross-selling synergies, but fusing disparate teams and cultures requires a deliberate blueprint that many leaders underestimate.
These commercial hurdles cut across the entire investment lifecycle. First, in pre-acquisition, the focus lies in understanding whether the target’s pipeline is truly reliable and where revenue faults may lurk behind the scenes. Sometimes, an otherwise enticing technology or media platform may have alarming blind spots: weak sales acumen, unclear market segmentation, or an overreliance on a single distribution channel. Engaging specialists who provide Go-to-Market & Sales Due Diligence—particularly those with deep knowledge of global Media and Tech trends—can unearth such issues and present practical strategies to mitigate them.
Next, during the holding period, the challenge shifts toward swiftly implementing tactical changes to maximize growth. Many companies in the TMT sector struggle with scaling effectively if they lack robust, data-driven infrastructure. Sales Infrastructure Assessment can be vital for identifying bottlenecks, while a well-executed 100-Day Sales Action Plan can quickly lay the foundation for a repeatable growth engine. In an industry where product life cycles move at light speed—especially with the emergence of new streaming models or niche tech service providers—fast action becomes a competitive advantage. Firms like nGülam, which specialize in hands-on operational support, emphasize prompt interventions that unify teams around common goals, thereby accelerating profitable revenue growth within high-potential yet volatile markets.
Commercial Execution as the Hidden Key
When it comes to the “why” behind these challenges, traditional wisdom tends to point toward technology fit or market timing. Yet the data reveals a more counterintuitive truth:
The greatest bottleneck in TMT value creation isn’t necessarily the technology or market opportunity itself, but the frequently underestimated discipline required to build and execute a robust, predictable revenue engine.
At first glance, merging a cutting-edge media or tech product with a hungry consumer base sounds like a surefire recipe for success. But without an effective go-to-market (GTM) strategy—supported by optimized processes, the right talent, and performance metrics—these opportunities slip away. The hidden key is often a well-structured commercial organization that not only understands the offering but knows how to position it, price it, and sell it effectively across diverse geographies. Integrating marketing, sales, and channel strategies in a cohesive manner, with a clear division of roles, is the difference between linear growth and exponential acceleration.
In Media and Tech specifically, where new revenue models emerge rapidly and consumer preferences shift almost overnight, a nimble, data-driven approach to commercial execution is the real breakthrough. nGülam’s work with TMT clients repeatedly demonstrates that when companies align their sales architecture with the fast-moving realities of content distribution, digital advertising, or subscription-based frameworks, they can unlock the majority of that elusive 59% value contribution.
The Implication for Global Expansion
For C-suite executives steering PE investments in TMT, these insights have deep practical implications. While a single product-market fit story can ignite initial growth, the key to long-range value often lies in replicating that success across new segments or geographies. Yet each expansion wave, whether it targets a new country or an adjacent industry vertical, presents fresh complexities—local regulations, cultural nuances, different competitive pressures, and evolving consumer behaviors.
Media and Tech companies, in particular, must address rapidly changing revenue models: from ad-based to subscription-based, from licensing to in-app transactions, or a hybrid that blends various models. A GTM strategy that thrived in one region may falter in another if not adapted for local tastes or regulatory frameworks. Building repeatable, profitable revenue growth under these conditions demands precise planning, careful oversight, and hands-on execution—attributes that specialized consultancies and operating partners bring to the table.
nGülam’s methodology, for instance, prioritizes data-driven decision-making and collaborative execution, working side by side with portfolio company teams. By focusing on sales structure, pipeline analytics, and talent development, operating partners can address underlying weaknesses that, if neglected, would erode potential gains. In markets where demand is uncertain or customer habits differ drastically, these local adaptations become instrumental in converting theoretical market opportunities into real top-line growth.
Maximizing Value Through Commercial Maturity
The final chapter in the private equity lifecycle—the exit—is where everything should come together seamlessly. A compelling narrative to prospective buyers isn’t just about product uniqueness or technology advantages; it’s about proven, repeatable revenue performance backed by strong metrics and a clear roadmap for future growth.
Pre-Exit Optimization and Exit Support services can spotlight residual areas needing fine-tuning. In the TMT world especially, timing is crucial: Surging demand for certain cutting-edge technologies or innovative media platforms may create windows of opportunity for higher multiples. Ensuring the portfolio company is geared for that moment—from an operational and commercial standpoint—can sharply amplify the final valuation. This stage is where the painstaking work of building and refining a sales engine pays off, converting a modest potential into an attractive proposition for buyers who see not just a great product, but a sustainable growth machine.
“Build the How” to Unlock 59% of Value
So what unites all these puzzle pieces behind the 59% enigma? The reality is that while a brilliant product or well-timed market positioning can spark excitement, it’s the disciplined, hands-on work of designing and executing an effective go-to-market strategy that drives the bulk of operational value creation in TMT. The real magic happens when teams focus on the operational “how”—setting up scalable sales processes, ensuring cohesive marketing and channel alignment, sourcing and training top-tier talent, and continuously revisiting pricing and product strategy to stay relevant in an ever-shifting environment.
It is this fusion of strategic vision and operational precision that often distinguishes a TMT asset that coasts on market momentum from one that evolves into a predictable, profitable growth engine. As Media and Tech companies diversify revenue streams—whether through streaming subscriptions, digital advertising, or new licensing structures—the ability to systematically execute a GTM strategy stands as the most formidable lever for transforming opportunity into realized value.
Where does this Leave you?
The question for C-suite executives and operating partners is twofold. First, are you genuinely prioritizing the design and execution of the “how”—the critical processes, teams, and performance metrics—to deliver on your promising TMT thesis? Second, do you have the specialized resources and operational muscle to navigate local market nuances, adapt fast to shifting consumer demands, and scale effectively?
In a sector where 59% of operational value creation is tied directly to revenue growth, overlooking the importance of commercial execution can undermine even the most compelling technology or media investment. Conversely, those who truly integrate the discipline of GTM building—from due diligence and early-stage sales infrastructure assessments to 100-day action plans and global market rollouts—can seize hidden opportunities and outpace the competition.
Ultimately, the enigma of missed opportunity or full potential hinges on how well the discipline of sales excellence meshes with the boldness of a TMT investment thesis. The biggest surprise is often that it’s not the “what”—the technology or content offering—that ensures success. Rather, it’s the “how”: a painstaking, hands-on approach to driving consistent, profitable revenue across diverse local markets and through evolving business models.
Will you treat commercial execution as the indispensable cornerstone it is, or will you risk letting a promising TMT asset become another cautionary tale of unrealized potential? The answer may determine whether you unlock that 59% enigma—and stand at the forefront of accelerating profitable revenue growth in one of the most dynamic sectors on the planet.
