Posts Tagged ‘market development’

Disruption and Adoption Are Confusing the Real Issue

February 3rd, 2014

It starts with the dreaded question in the pitch meeting. Usually slide #2 of your supposed 5 slide deck. “I think I get what you do, how are you going to build a market?”

You, at that point, will discuss the extrapolated X number of companies that fit the target, talk about your percentage that of the available that you would like to have within Y years, and then talk about all of the mechanics that you plan on driving to get  that percentage at Z cost per customer in acquisition costs. Numbers are actually irrelevant since the person who asked the question won’t really believe your answer; they just want to see if you understand the variables to the formula.

What is really hidden in the question is the assumption about how expensive it is to build and develop a market. They are looking for your Go-to-market strategy, but really they are looking for your built-in short-cuts. They are looking for ways that you can short-circuit the standard investment model for building a market.

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Do or Die – The Adoption Venture Funding Quagmire

November 14th, 2013

For disruptive technology companies, the key is to become less disruptive in your adoption. For technology venture investors, the key is to minimize your cost of adoption to the buyers, which will drive your market adoption. Investing in the market before buyers is an expensive proposition for which there is a better use of funds.

Venture capital is a risk management game. Invest in a certain number of companies, expect a certain number will fail, but make sure you have a minimum number of “wins” sufficient to drive a return. Simple, right? Not really because the elephant in the room is adoption. Great technology, but unable to find a market, couldn’t capitalize on the early wins, couldn’t get it to market, beat by a weaker technology, bigger guys moved in, etc.

Let’s face it, if technology investing was really about “technology”, every venture firm would be really a R&D shop. Good technology is the first step in developing a technology company on the way to building a market to driving a return.

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