New venture outsourcing blog

I’ve recently had the pleasure on serving on a panel of judges evaluating business plans. This time the presenters were all social enterprises - business ventures with a double bottom line (societal and financial returns). Their ‘products’ ranged from new web portals to architectural goods and often subsidized or supported important causes like vocational training, reduction of disease, or caring for the environment.
Below are some of the common questions and feedback the presenters received:

-Who, exactly, in your customer?

-How much money are you asking for?

-What would you use this capital for?

-How does this money turn your enterprise into something lasting/sustainable?

-Who is missing on your team?

-Are you charging the right amount for your product/service (would customers pay more? do competitors charge less?)

-Who are your competitors?

-What keeps others from doing this / what is your intellectual property?

-Would it make sense to scale back operations to build a stronger business?

-How would you scale this business: geographically? number of offerings? franchise?

-How hard is it for someone else to do this?

-What is keeping you from getting started: funding? team? R&D?

-Have you talked to customers? What do you know about your customers?

-What is the minimum amount of funding you need to prove your concept or make your first sale?

-Who are potential partners?

-So what part of the supply chain / distribution network do you fit into?

-Are you selling to businesses or consumers?

-What is your exit strategy / plan for sustainability / way to repay investors?

-Are you looking for a loan, a grant, an investment for equity, or a set of donations?

-What are your next steps / milestones?

-How do you measure success? How do you know if what you are doing is making a difference?

Send us an e-mail or leave a comment with questions you’ve heard as you have pitched your venture.

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Picture yourself walking into work and getting the worst email imaginable: Google announces they’re coming after your target market!

You want to be sure this doesn’t happen to your company and seventeen years of experience with entrepreneurs has taught us how.  The secret is to already have your product, customers, and strategy sewn up before they even think about it!

What were you doing in 1999?

Imagine yourself there.  Microsoft is still the top dog, everyone and their cousin is starting a company, and pitching VCs for money is as common as a job interview.

A good friend of mine joins a two person team and they’re sitting with one of the heavy-hitters at Sequoia.  Their idea is great - they’re going into a space that is a clear home run and very likely a perfect acquisition target for Microsoft.

Are you beginning to see yourself in his shoes?  You know what comes next - during the pitch that’s been rehearsed almost a hundred times they get to the “Why us?” slide.  The founder, who is a really smart engineer with a touch of naivete proudly proclaims, “I’ve been working on this for quite a while now, and we have a three man-year lead on any other competitors!”

Now I would like you to experience the feeling of looking into the VC partner’s squinted eyes as he says, “A three man-year lead?  That’s a Microsoft minute!”

I’m sure you are wondering whether they got the term sheet - but that’s not the moral of the story.

The point is: you don’t have time.

Little by little you’re building your team, find an office that’s not too big but not too small, put up your website, and inch your product along all the while.  Have you noticed that even as you accomplish these things (which is no small effort!) you’re starting to feel even more vulnerable to competition than when you first started?  The reason is because the reality is starting to sink in - the pace of building a company is not as fast as you need it to be. 

If someone, anyone really, with a decent engineering team heard about your idea and decided they wanted to - you’ve got a minute, maybe two - before you need a new idea.

That’s why we started Inventure Global.  You see, time-to-market isn’t just a VC catchphrase.  It’s reality.  It’s important.  It’s the only thing that can really put distance between you and your competitors.  As you already know, the sooner you get to market, the sooner you capture the mindshare of your customers, partners, and build real barriers to entry that can help you withstand a late entry from an existing team.

Our firm specializes in getting you from prototype to product as quickly as possible.  We already have the team you need.  You can build your own team alongside ours, use us to augment your current team, or use us until it makes sense to build your own team.

Why not start moving today?  You already know waiting isn’t the answer.

Contact us and see how we can get your company to market faster - today. 

In case you’re wondering - my friend’s company didn’t get the term sheet!

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Coming from the data mining and machine learning field, a few friends of mine have been kicking around the idea of whether data or analysis is a more valuable asset.  Obviously the two have a symbiotic relationship to be valuable together.  If you can have both you’ll take it, but what if you had to choose?  Is it generally true that in most areas of business you have to specialize - which means prioritizing certain activities, skills, or knowledge over others.  Should you choose to get better access to the data or should you choose to get better at analyzing whatever data you have available to you?  If you’re in an analytics heavy field - is there an inevitability that one or the other will win in the long run?  If not, under what conditions might one be the better option? 

I originally started thinking of this in terms of “Which would cost you more if you had to buy it?”  Would it be cheaper to have the ability to analyze data well, and have to “purchase” the data from someone else - or would it be cheaper to have the ability to obtain, store, and access the data well, and have to purchase the analysis from someone else?  Microeconomics says that value is all about scarcity, so this line of thinking led me to conclude that decent analysts will always be cheaper (on a for-hire basis) than access to all but the most plentiful data.  Therefore, if the data is abundant then it might make sense to specialize in its analysis, but under almost any other circumstances you should choose to be the one who has better access to the data.  Point for data. Algorithm design, analysis, whatever you want to call it is basically a particular example of human ingenuity.  Therefore at any moment in time, someone has come up with the “best” way to analyze some data for a particular purpose.  However, innovative people all over the world are hard at work to put that person’s idea out to pasture even before the idea has been tested.  Therefore, cutting edge analysis has two properties relevant to this discussion.  First, it can increase the value of the data by a quantum leap when a new theory emerges.  This makes it a very valuable contribution for a period of time.  However, inevitably, how long this lasts is hard to predict.  It could be the decisive contribution for a year, five years, a decade, or a few decades.  The only thing we know for sure is that it will not be king forever.  Still, whoever owns the best analysis in the world for a given situation is arguably bringing a very unique value contribution to the table and if protected properly can be quite scarce.  Point analysis.

Brad Burnham at Union Square Ventures considered the problem in a much better way.  He posits that data has an increasing marginal utility.  This is a very important characteristic which says that every additional piece of data you get is more valuable than the previous one you got.  Why?  Because with proper analysis, you can tie that single new piece of information together with potentially all of your previous data.  This network effect of data is very insightful.  It says that knowing your location and knowing what you search for on the web are both valuable in their own right, but knowing them together is even better (think relevant & localized ads).  Nice work Brad.  Another point for the data.

What about analysis, does it have any “network effects” or compounding effects to counter the effects we just saw that collecting more data has?  I think it might.  The data people have a cost structure problem.  The cost of getting & storing a lot of data can be quite high.  The trend is that data from transaction or event monitoring is growing exponentially.  The cost to store the data is also declining exponentially, which is good news for the data guys, it means they have a chance at least.  However, the costs to access & transmit the data is not decreasing nearly as fast.  Also, the cost to power (literally, in terms of electricity) the storage systems is becoming a problem, and not decreasing nearly fast enough to be meaningful.  Point analysis. 

The more I think about, my gut instinct says that data is the only way to keep a lasting competitive advantage.  However, if you want to make a quick strike against your competition, it seems that analysis may be the way to go.  Perhaps the right strategy is to try to shift from one to the other?  This could definitely use some more consideration.  I’m going to be on the look out for some good case studies out there.  Maybe Google, eBay, and even the phone companies provide good examples on what to care about here.

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