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Many observers of the venture capital industry have questioned whether its best days are behind it. Looking ahead at the next decade I am excited by what I believe will be viewed as one of the best and most rational investment periods for venture capital due to seven discrete factors: 1. This article originally ran on PEHub.
We had a special edition of This Week in Venture Capital this week shooting out of the Next New Networks offices in New York. Our guest was Mo Koyfman of Spark Capital. The Spark Capital website (it’s one of my favorites). Company grew by more than “400% each year” for past few years [assume growth metric = revenues].
In case you hadn’t noticed, the key elements of a competitive advantage for your business have changed as businesses move online, and your domain is instantly global. As a business advisor, I have to recommend even to established companies that they review and revamp their competitive strategy now, even if it appears to be working today.
At our mid-year offsite our partnership at Upfront Ventures was discussing what the future of venture capital and the startup ecosystem looked like. No blog post about how Tiger is crushing everybody because it’s deploying all its capital in 1-year while “suckers” are investing over 3-years can change this reality.
We also spoke about technology systems in the perspective of global competition. He believes that one of the financial metrics taught at business schools and reinforced by Wall Street has accelerated offshoring of industries. He spoke about ROCE (return on capital employed). Venture Capital. I don’t believe it.
He comes from a background in venture capital from inside and outside the Valley, as well as entrepreneurship work with startup efforts around the world. I second his list of top innovation challenges and strategies to capitalize on untapped global startup opportunities: Create new markets rather than disrupt existing ones.
Think that the only metric that matters nowdays is the number of users you have or downloads of your mobile app? I remember just a decade ago in 2003 when we all laughed at how dumb people in the 90′s were talking about the race to capture as many eyeballs as possible before your competition. I work with a lot of startups.
while acknowledging that San Fran deals are often higher valuations due to increased competition amongst investors. For me I think that investors have got to accept the new reality in pricing if they want to remain competitive in markets like we’re seeing now. Use competition to make sure you get a fair price.
I see many companies these days just race to raise capital. They see capital raising at the success validator. What in your product is truly differentiated in the market to solve this problem (where do you believe you’re strong against the competition in functionality or delivery). Product / market fit is everything.
You have to understand whether they’re likely to yield revenue growth in the near term OR whether you have access to cheap enough capital to fund your losses until your investments pay off. Have easy access to capital by investors who are committed to building businesses at Interent scale. Internet scale.
I remember just a decade ago in 2003 when we all laughed at how dumb people in the 90′s were talking about the race to “capture as many eyeballs as possible” before your competition. The minute you try to monetize now they have metrics with which to beat you up and say you’re business has limitations.”
While you all recognize that reacting to weak market signals is critical to staying in business and staying competitive, I find that many don’t have the skills and focus to trigger change decisions on a timely basis. Establish and evaluate metrics at multiple levels. Don’t dismiss any new thing as a “flash in the pan.”
How do we need to structure the systems to get ahead and stay ahead of the competition? What metrics are going to be the key startup metrics and how do we get those metrics without too much cost? Given likely market changes, how will we design and build so that the systems can respond to marketplace changes? Here's why.
seed and they are writing $1.25m of it you can expect them to require a board seat) The competitive landscape (If you have several sources of capital you can likely politely decline the board request or can grant them a seat but ask for it to be “common appointed” and those revokable if you need in the future). But it’s quite rare.
TechCrunch Europe ran an article in November of last year that European startups need to work as hard as those in Silicon Valley and I echoed the sentiment in my post about the need for entrepreneurs to be maniacal about their businesses if one wants to work in the hyper competitive tech world. We were based in London.
Of course, that’s both the good news and the bad news for aspiring entrepreneurs, since it means more competition, and the business landscape is changing faster than ever. Before you bring on partners, develop intellectual property, raise capital, or generate revenues, you need to establish an official business entity.
Often board members themselves don’t do the work to say “what metrics would we like to see.” Any great board member should tell you, “please don’t create any performance metrics or materials that analyze the business that you’re not already creating for your own management’s use.” Sometimes they don’t even know.
Have you projected sales and marketing costs, cash flow, and capital requirements? Develop metrics with which to measure yourself and use these to incrementally expand and improve your offering as fast as the market and capital will allow. Show return on investment, growth rates, and market penetration. Don’t stand still.
There are real changes in the venture capital industry and it would have been fun to talk about them. Dave McClure argued passionately that since the overwhelming majority of exits are sub $100 million we need to readjust how much capital goes in. There is no way for people to keep prices down – it’s a competitive market.
He comes from a background in venture capital from inside and outside the Valley, as well as entrepreneurship work with startup efforts around the world. I second his list of top innovation challenges and strategies to capitalize on untapped global startup opportunities: Create new markets rather than disrupt existing ones.
In fact, a business plan is needed more by you than investors, as the blueprint for your company, team communication, and progress metrics. It always amazes me how an entrepreneur can define his market opportunity so broadly, and then assess his competition so narrowly in the next breath. Competition and sustainable advantage.
In fact, a business plan is needed more by you than investors, as the blueprint for your company, team communication, and progress metrics. It always amazes me how an entrepreneur can define his market opportunity so broadly, and then assess his competition so narrowly in the next breath. Competition and sustainable advantage.
As a startup in this phase you often raise capital, get press, hire staff and everything feels possible. In the case of MakeSpace we had huge initial successes in New York City as Rahul led the scaling of our drivers, our trucks and our warehouses and we figured out the right price points to beat the local competition.
In my experience, competition is the biggest challenge here. Even the best solutions require marketing and motivating advocates these days, with the rise of instant global competition, and flood of alternatives available via the Internet. Enablement: provide support and human capital.
How does any entrepreneur define the right balance, and then measure their performance against real metrics? Lots of people are trying to help, with new twists on the age-old model of free-market capitalism that has driven businesses for the last 500 years. Making a profit does not imply greed.
I do think the way we work with companies is a little different from other programs, in that we view it much more like the wasyI personally think about investing and venture capital. Instead, you have to prepare those companies, and make them competitive with the best companies in Silicon Valley who are getting funded. READ MORE>>.
Your competitive advantage. Identify your sustainable competitive advantage, like unique benefits, cost savings, or industry ties. Don’t kill your credibility by saying you have no competition. You need to think through what points are most important in your particular case, and capitalize on your strengths.
During my time in Silicon Valley, I was struck by the fact that most successful entrepreneurs seemed to personally know and regularly hear from all the “movers and shakers” who had the investment capital and leadership they needed. Using metrics to measure results and commitments. Marketing your personal brand and your vision.
Microsoft found this out last year when their market capitalization, once at $560 billion in the year 2000, had fallen to $219 billion, allowing them to be passed by Apple at $222 billion, who grew from $15.6 Metrics are required for ensuring the return to a known good baseline. billion during the same period.
Changes in your organization’s core performance metrics. If one metric changes, it may not be significant, but someone needs to monitor whole categories for fluctuations that may be a weak signal. All weak signals need to be treated with a continuous innovation mindset and urgency, to stay competitive and current.
How does any entrepreneur define the right balance, and then measure their performance against real metrics? Lots of people are trying to help, with new twists on the age-old model of free-market capitalism that has driven businesses for the last 500 years. Conscious Capitalism, for example, claims 3.2
Have you projected sales and marketing costs, cash flow, and capital requirements? Develop metrics with which to measure yourself and use these to incrementally expand and improve your offering as fast as the market and capital will allow. Show return on investment, growth rates, and market penetration. Don’t stand still.
Today, Silicon Valley is the consumer and enterprise software capital of the world. Exposure instills the fear and urgency you need to deliver the right competitive solution. Raising capital isn’t the be-all and end-all of startup success. But it is an important metric for firms in pursuit of explosive growth.
Changes in your organization’s core performance metrics. If one metric changes, it may not be significant, but someone needs to monitor whole categories for fluctuations that may be a weak signal. All weak signals need to be treated with a continuous innovation mindset and urgency, to stay competitive and current.
EcoMom’s metrics improved throughout this process and that’s when I decided to invest. AngelList has introduced new competition and competition in any industry is always good. The partners soon outgrew each other and SproutBaby acquired EcoMom, ultimately going through a complete brand shift.
Microsoft found this out when their market capitalization, once at $560B, had fallen in 2010 to $219B, allowing them to be passed by Apple, who grew from $15.6B Metrics are required for ensuring the return to a known good baseline. That’s why investors invest in entrepreneurs, rather than ideas. during that period.
Your competitive advantage. Identify your sustainable competitive advantage, like unique benefits, cost savings, or industry ties. Don’t kill your credibility by saying you have no competition. You need to think through what points are most important in your particular case, and capitalize on your strengths.
How does any entrepreneur define the right balance, and then measure their performance against real metrics? Lots of people are trying to help, with new twists on the age-old model of free-market capitalism that has driven businesses for the last 500 years. Conscious Capitalism, for example, claims 3.2
How does any entrepreneur define the right balance, and then measure their performance against real metrics? Lots of people are trying to help, with new twists on the age-old model of free-market capitalism that has driven businesses for the last 500 years. Making a profit does not imply greed.
Of course, that’s both the good news and the bad news for aspiring entrepreneurs, since it means more competition, and the business landscape is changing faster than ever. Before you bring on partners, develop intellectual property, raise capital, or generate revenues, you need to establish an official business entity.
A strong vision and deep insight may get your business off the ground, but long-term success requires constant data analysis, metrics, and attention to your customer feedback. The competition will improve, the market will change, and your customers will demand more. Balance of passion with reality and customer feedback.
Today, Silicon Valley is the consumer and enterprise software capital of the world. Exposure instills the fear and urgency you need to deliver the right competitive solution. Raising capital isn’t the be all and end all of startup success. But it is an important metric for firms in pursuit of explosive growth.
Changes in your organization’s core performance metrics. If one metric changes, it may not be significant, but someone needs to monitor whole categories for fluctuations that may be a weak signal. All weak signals need to be treated with a continuous innovation mindset and urgency, to stay competitive and current.
Have you projected sales and marketing costs, cash flow, and capital requirements? Develop metrics with which to measure yourself and use these to incrementally expand and improve your offering as fast as the market and capital will allow. Show return on investment, growth rates, and market penetration. Don’t stand still.
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