We spend a lot of time on the road in our job, especially traveling through patches of relatively remote, rural areas of nothern New England. But it is amazing what technology allows you to accomplish away from the office. For example, right now I am blogging (and sending emails, working) through my laptop (which is connected to the internet through my blackberry via a USB tethered modem) while sitting on the floor in a remote rest stop in northern VT, 20 miles outside of St. Johnsbury VT. The flexibility and virtual office capabilities provided through internet-enabled technologies improves productivity in immeasurable ways. Maybe I'll even get some time to ski this weekend with my family...it helps that I can effectively work on the road, so that when I arrive home, I can be home and not have a 20-point to do list.
Gotta love it.
Friday, December 28, 2007
Monday, December 10, 2007
Cheerleading
I like entrepreneurs. They are optimistic. They are doers. They push through negativity. They don't believe that they can't do what people say can't be done. But if we believed everything we ever heard from entrepreneurs, we'd make 100X on every investment, every round in which we participated would be the company's last round and I'd have to bless my stars for always being around at that proverbial tipping point. So we have to discount what we hear.
When an entrepreneur first comes to us, they are in a selling mode. They want to sell themselves (fantastic management team) and their company (the best idea ever). I understand sell mode and what it means, so I discount what I hear. The question is how much. The best management is a team that knows what they don't know and does not oversell. They believe in themselves and the company but they are realistic on the risks and their knowledge/experience. They know that their team is not complete, that they have not proved themselves yet. And they know that I am listening. If they tell me that they'll do $5 million in sales next year that I'll remember. Credibility is on the line. Do they do a Tenet "slam dunk" or do they outline what has to happen for those sales to occur? Do they understand what they need to do to get it done and what market forces could derail the plan? Either way, any time anyone opens their mouth, credibility is on the line. Either you do what you say you were going to do or you do not. So why is the post titled "Cheerleading"? Well, good entrepreneurs are good sales people. They sell their business idea and merits to investors, they sell their product to costumers -- they got to where they are because they can sell. But do they oversell and over-hype -- i.e., "Cheerlead"? You only get so many chances in life to retain credibility, so be careful on what you promise and how you nuance things. You can promise the world and convince investors in the process, but then there is only one thing you can do to retain credibility. Deliver. If you fail but continue to cheerlead, you'll be doing so to deaf ears. If you fail, but then are humbled and see what led to the failure (incomplete team? faulty assumptions with adoption rates, pricing strategy, sales strategy, brand/marketing execution? over-exuberance? thinking you could do more than really possible? failure to pay attention to the underlying business drivers? inexperience?...) and change your tune, you can buy back some credibility.
The point of this post? VC investors don't like to be rushed into making decisions. They want to buy as much time as possible to get to know entrepreneurs, their business and get a read on cheerleading vs. execution. They are looking for credibility. So be careful in what you promise, what you say you can do and how you nuance things. In the end, doing what you say you are going to do is the best way to get funded and maintain that all-important credibility.
When an entrepreneur first comes to us, they are in a selling mode. They want to sell themselves (fantastic management team) and their company (the best idea ever). I understand sell mode and what it means, so I discount what I hear. The question is how much. The best management is a team that knows what they don't know and does not oversell. They believe in themselves and the company but they are realistic on the risks and their knowledge/experience. They know that their team is not complete, that they have not proved themselves yet. And they know that I am listening. If they tell me that they'll do $5 million in sales next year that I'll remember. Credibility is on the line. Do they do a Tenet "slam dunk" or do they outline what has to happen for those sales to occur? Do they understand what they need to do to get it done and what market forces could derail the plan? Either way, any time anyone opens their mouth, credibility is on the line. Either you do what you say you were going to do or you do not. So why is the post titled "Cheerleading"? Well, good entrepreneurs are good sales people. They sell their business idea and merits to investors, they sell their product to costumers -- they got to where they are because they can sell. But do they oversell and over-hype -- i.e., "Cheerlead"? You only get so many chances in life to retain credibility, so be careful on what you promise and how you nuance things. You can promise the world and convince investors in the process, but then there is only one thing you can do to retain credibility. Deliver. If you fail but continue to cheerlead, you'll be doing so to deaf ears. If you fail, but then are humbled and see what led to the failure (incomplete team? faulty assumptions with adoption rates, pricing strategy, sales strategy, brand/marketing execution? over-exuberance? thinking you could do more than really possible? failure to pay attention to the underlying business drivers? inexperience?...) and change your tune, you can buy back some credibility.
The point of this post? VC investors don't like to be rushed into making decisions. They want to buy as much time as possible to get to know entrepreneurs, their business and get a read on cheerleading vs. execution. They are looking for credibility. So be careful in what you promise, what you say you can do and how you nuance things. In the end, doing what you say you are going to do is the best way to get funded and maintain that all-important credibility.
Monday, December 3, 2007
A Product or a Business?
We're often approached by people who have (or are representing someone that has) an interesting product or have invented a unique technology. And, of course, they are looking for funding. But what they lack are a plan and team. More than anything, we invest in people. Technology/brand/product certainly matter, but people execute on ideas and make things happen. Technologies, markets and products will change, but the people will still be there. Can they adapt? A technology or product is nothing more than a starting point...and more than 99 chances out of 100, too early for venture capital.
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