Running the Business You Depend On: The Customer-Owner Dilemma
Customer-owned software businesses have very different priorities than traditional founder-owned companies when they begin thinking about a sale.
The customers who own the software are usually operators first. They built or acquired the platform to solve a critical operational problem inside their industry, not because they aspired to run a software company indefinitely.
At a certain point, many customer-owned businesses begin asking a similar set of questions:
- How do we continue modernizing the product without disrupting the customer base?
- How do we preserve the culture and industry knowledge embedded in the business?
- How do we ensure decisions are still made with customers in mind once ownership changes?
In this blog, we reflect on the acquisition of Horizon Retail Solutions, a business previously owned by their customers exploring why they chose to sell, what mattered most throughout the process, and where the business stands seven years later.
When Customer Ownership Has Run Its Course
Horizon Retail Solutions provides ERP and retail management software for farm and home supply retailers across the Midwest. In 2015, a group of ten retailers acquired the business from its founder following his retirement. The retailers stepped in because the software was mission-critical to their operations, and they wanted to ensure its continuity. Customer ownership protected the platform during an important transition period and kept the business closely aligned with the industry it served.
Over time, the ownership group encountered a challenge common to many customer-owned software businesses: running a software company requires a very different operating model than running a retail chain business.
Technology investment decisions had also become complex. Long-term architectural improvements competed against near-term operational priorities. Product management required balancing the needs of individual owners against the broader direction of the platform. Modernization became increasingly difficult to fund and execute within a structure where the owners were also the customers.
By 2019, the group recognized the business needed a permanent software operator to continue evolving.
Finding a Long-Term Home
As Horizon contemplated a sale, their priority was continuity. The ownership group wanted confidence that the business would continue investing in the product, supporting customers, and operating with a long-term mindset. Given Perseus’ buy-and-hold acquisition model and experience across retail software, there was strong alignment.
Following the acquisition, Horizon gained access to the operating structure and long-term investment approach needed to modernize the platform while maintaining continuity for customers:
- Architectural limitations that had previously constrained growth were addressed through platform upgrades
- Software releases moved to a predictable quarterly cadence
- Long-term modernization initiatives are now underway to support future scalability and expansion
- All customers renewed after the initial three year term with the majority of customers signing extensions of three years or longer. Equally important, the customer voice did not wane following the acquisition. Feedback continued through user groups, an annual in-person customer conference, and ongoing engagement with the retailer community.
“Customer ownership kept Horizon alive at a moment when it could have disappeared, and we have a lot of respect for that,” says Mike Neame, General Manager at Horizon. “What changed under Perseus was the discipline around running it as a software business: structured releases, clear priorities, and the investment to modernize the platform. The customer relationship is still at the center, just channeled through a team built to operate the product for the long term.”
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