November 20th, 2007 by
Amish Parashar
Our involvement in the Venture Capital / Investment community is hardly a secret on this blog - our group partners with pre- and post-funding companies to help with excellent execution.
The folks at InsideCRM have compiled a list of The 20 Worst VC Investments of All Time, their commentary is insightful and an interesting look into the side of the industry that rarely makes headlines. Of course, high risk / high reward investing means that some companies will succeed spectacularly, some will yield small profits, small losses, or break even, and some will hemorrhage money. The difference between spending wisely on necessary parts of your business model and squandering a institutional money becomes obvious in these examples:
Think Ikea not Aeron if it doesn’t increase your sales:
“Webvan’s “major purchases included $1 billion for warehouses, enterprise servers and more than 100 Aeron chairs.”
Know your customer:
“…advertisers didn’t see the appeal of the low-pay demographic AllAdvantage offered. This company represents $135 million in venture capital down the drain.”
Raise enough to start making money:
“…promising solution simply didn’t have the cash to hang on until the software could be launched.”
More facts and insight at InsideCRM, thanks to them for a great entry!
* the cliche about 20/20 hindsight seems to apply particularly well - retrospectively these are bad investments, at the time of funding they obviously seemed like wise, profitable endeavors to many smart people. In my opinion, this emphasizes the importance of a relentless focus on execution while you meet milestones - or getting the partners and team to be able to!
Posted in Entrepreneurial, Outsourcing, Solutions, Start-up, Venture Capital | 
No Comments »
November 13th, 2007 by
Chris Harris
We help startups outsource in order to get to market faster, reduce their costs, and scale up. You might find it surprising that we don’t tell every startup that they should be working with us. Like all companies, we spend a certain amount of time stepping back and asking ourselves who our best customers are - and why.
- Why do certain clients seem to get more out of the relationship with us than others?
- What kinds of clients seem to benefit the most from outsourcing?
- How can we help all of our clients get more out of working with us?
The companies that get the least out of outsourcing, and consequentially the least out of working with us, are the ones with a more scattered vision of the future.
Outsourcing is so powerful for startups that need to accelerate. In much the same way that raising VC money can provide the jet fuel needed to catapult a company to the next level, deciding to outsource can really propel your company to accomplish more in much less time. It compresses the time to market.
Like any accelerator though, this can backfire if your aim is bad!
If your business hasn’t figured out what you need, what your customers require, or what form it needs to take - you can spend a lot of money building the wrong thing. When we find customers who are less sure about what they want or how it should look or behave, we give them the following advice:
- Take stock in what your value proposition is to your easiest to reach customers
- Validate, with each other or customers, which features are required
- Focus on getting that accomplished, shelve the other ideas
Getting customers to pay for things is how you ultimately validate your products and your business. Once you’re sure that customers will need and pay for whatever you need built - then it’s time to hit the gas pedal - outsource as much as you can as fast as you can!
Posted in Bootstrapping, Outsourcing, Start-up, Technology | 10 Comments »
