VC Startups Carnival

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The Startups Carnival runs from March 3 to 17 2008 and is a great opportunity for those people trying to get a new initiative off the ground in the technology space. With an initial focus towards Web 2.0 / Social Networking but also inclusive of other technology environments, initiatives in green technology, it will be a good opportunity to showcase some of the new great ideas that are on the verge of fruition.

So how does it work? Here is an extract from the Startups Carnival site:

How it works:
It’s an online (web based) carnival, starting on March 3, 2008.
On receiving the applications/registration from various startups/ventures, profiles/information will be compiled in a web format. These profiles /information will be published on the carnival portal, starting March 3, 2008. Three/four profiles will be covered everyday on the portal.

So please keep watching the space and make sure you have got your feeds subscribed as we have some grand plans on this to take it further.

In terms of what participants get are:

  • New ventures learn about other ventures and people behind these across Australia.
  • We are finalizing Judging Panel of 3 to be announced by Monday Feb 18, 2008. The panel is going to judge all the ventures on originality, simplicity, technology and marketability. They will select the top three. They will also provide some suggestions to all participants.
  • We are also working on with some sponsors on offering some form of prizes to the top three ventures and few freebies to others. Once finalized it will be published on site.
  • We are also working on getting some famous global bloggers to write about this initiative and people/ventures who are participating.

I’ve been fortunate enough to be invited as a judge along with Duncan Riley and Ross Dawson

So if you have a venture, then check it out and be a part of it.

Venture Capital – The E2B experience (still smelling like dot com to me)

Back in March 2000, I discussed the idea of setting up a First Tuesday group in Western Australia with Stuart Hope, then CEO of Software Engineering Australia (SEAWA). We also brought in Peter Morris of Telesis, and got ourselves underway.

First step was to review the licencing model for First Tuesday – which read something like – “bear all liability personally, but we can take your assets – database, networks, dealflow and anything else for that matter – without recourse”.

We said, “I don’t think so” and set up our own meeting group called Entrepreneurs2business. The group was established as a dynamic meeting place for entrepreneurs, advisors and investors, with a view to commercialisation of these technology ideas to bring business growth, export revenue and to further grow the technology industry in Western Australia . Nothing particularly new in these types of forums other that the financial fuel of IPO fever.

The group was founded in May 2000 and held its first event on July 4, 2000. The group went on to hold 30 events, meeting monthly using the format of a speaker with commercialisation experience sharing their knowledge with the group. First Tuesday had long since died by the time we closed E2B.

Some interesting observations:

1. In networking events like this, the VC’s lean against the bar waiting to get picked up

2. The advisors all talk to each other and tell each other how well they are doing

3. The entrepreneurs stand nervously in the corner refusing to divulge their IP to anyone

(This is a little exaggerated of course – but seeing this in action the only thing you can do to get interaction is introduce people to each other and make sure they both understand why you are trying to connect them together).

Do you feel the market feels like that again? Fueled this time by trade sale and private equity, booming economies, and escalating salaries and expectations? Smells like it to me, love to get your feedback

And the implication of that is…?

One of the things that I found interesting in the way we conducted presentations to clients was Bill’s uncanny nack of teasing out and confronting the hidden issues that someone that he had never met before would open up to him. It really was a case of drawing on a lot of experience.

The essence for our approach was drawn from Spin Selling. The Spin Selling Fieldbook and Major Account Sales are required reading if you want to understand the process of creating opportunities and realising them in sales.

If you have not come across it before, SPIN covers 4 key parts to a sale:
Situation: what are the facts you need to know about a customer and their environment to determine if your product will be a fit for their business. In application development terms, this might be a question like, “are you a J2EE or .Net shop?”. Best to do your homework prior to seeing a customer if you can, so that you don’t spend the meeting like an interrogation.
Problem: Having established the environment, the trick is to explore problems that the customer might be experiencing. You must have thought about your product and service, and the types of problems it solves for customers. Again, such a question might be (again, in application development terms..), “Have you been having trouble implementing the latest flavour of .Net?”
Implication: Generally this is where the probing is really starting to add some value for the customer – as much as it may be causing a bit of discomfort. For example, the above question might have yielded a response such as, “yeah, a little but we will be ok and just grab a book or google it..”. You then need to be able to ask the question, “If you do that and it doesn’t work out, what is implication on service levels for your customers?” or other similar question that probes the next level of depth – the aftermath of the course of action going pear shaped.
Need – payoff: At this point, a great outcome is the client saying, “I hadn’t thought of that, I need to get that sorted out. At this point, the next question is, “well, if we able to eliminate that as a problem for you, what would that do for you?”

Notice that during this process you have not been selling or even talking about your product at all? This is the hard bit for most salespeople who get trained up in the product, grow to love it, and want to share their passion about their product to the customer. The customer, of course, is only interested in their own problem. If you focus on closing in a complex sale, chances are you will be nowhere near as successful as you could be. So, grab those Spin Selling books, I highly recommend them.

Some shortcut key points:
1. Business Development Processes if you can systematise you process, you have a more rapid way of fulfilling on customer enquiry. I have found that by responding with a solid proposal quickly, you stand a much better chance of success. Many companies do not really track the time from enquiry to delivery of proposal, conversion rates, or the time to develop a proposal and aim to shorten it.
2. Market Segmentation – you just simply can’t sell to everyone, but the question becomes who to really focus on, and in depth.
3. Analytics – Looking at what data you capture and making sense of it
4. Database clean up and management – and integration. In your business you probably have a bunch of people referred to in different parts of your business as customers, clients, debtors, creditors (if they both buy from you and sell to you) – and probably all in different databases, accounting systems, and email clients.
5. CRM – the big question here is “what does CRM mean to you?”. Technologies have been fantastic at undertaking demos on product that seem to solve all of the problems – it is the implementation of the technology AFTER people and process issues have been resolved that delivers success. Our experience is that this needs to be very much customised to the individual company rather than trying to the meld the company to the software. As I run a business specialising in application development, I do have a bias here – but in many cases is cheaper and more effective to build software for purpose as a core business system rather than buy something with features you will never use.

The World is a Wanker

I once had an interesting experience in a meeting with Bill and a top tier consulting firm, in a very impressive office. We called in to see a mid-level manager and explained what we were doing in the consulting arena around ebusiness – strategy, web enabled application development, portals – enhancing the online user experience. This guy’s response was, “we don’t need you. We have a partnership with Cisco.”
“What? The people that supply routers and switches?”

Interesting enough our very next meeting was with a Partner of one of their competitors, again a top tier firm. The response was entirely different – he was pragmatic, client centric and with an emphasis on solving problems and really interested in how we could help. He wasn’t interested in pushing his own ego and importance – he just had a job to get done well.

At the end of this second meeting Bill exclaimed, “The world is a wanker! People hide behind egos and the protective veil of large corporations, but put them out into their own business and they wouldn’t last 5 minutes. They are just not that bright, regardless of what they tell you. And the more letters after their name, the less they can do.”

“All you have to do is stay 20 minutes in front of the client. You have to have the courage to have a go, and punch above your weight.”

To test this theory, I tried a presentation to a major IT organisation about our capability. I was reciting a presentation fairly much rote, with almost no understanding of the technical terms I was using – but following instructions of speak confidently, roll your hands, lean forward….

And the response shocked me –

“you guys are way in front of the market, I think you will shake up this town…”.

I nearly died laughing…

Since then of course I made sure I did know what I was talking about….

The Technical Hiring Dilemma
In the UK, the Technical Director was a young super bright guy named Nikk who had more technical and business smarts than many people I’ve met with 10 years more experience. He was the one with the critical pressure to ensure projects were delivered and worked. And he also had to manage the resourcing pains of that as well. His common complaint was, “everyone says they can do it right up until the point they cant do it”.

I experienced this on a project. We had briefed a local WA business partner to undertake what looked relatively simple application development. We noticed that he seemed to be taking an inordinate amount of time to do the work, reassuring us that all was on track and that he 90% there. After two weeks of this, he disappeered, taking the payment for the work done to date BUT without us having any code we could use. Of course, he could do it – right up to the point that he couldn’t do it.