Did You Receive Funding without Understanding Your Market?


It is astounding the number of Venture Capital firms in the Bay Area who give countless sums of money to companies that have a cool product with no market understanding. The CEO’s of these cool technology companies conceptualized the idea, built the technology, and received funding thinking that the product will sell itself. These same CEO’s find that within a year, revenue is flat and that most of the money are burnt. CEO’s with a clear and focused market understanding will be much more successful with their funding than those who believe the technology will sell itself.

For a CEO to be successful, they need to understand the complexity of their markets that includes, at a minimum, the following elements: market size, value, competitive differentiation, sustainability, and their customer profiles. For the purposes of this article, the approach and importance of each element will not be discussed.

Market Size: The research into market size can be quite tricky. There is a difference between total available market and addressable market. The latter is the market in which the company can compete. For instance, does your product suit the enterprise or mid-market or is there geography or a segment of an industry that has a greater propensity to purchase. Once the addressable market is identified, it is rather easy to obtain data that shows quantities and types of customers within that market.

Value: The value that your product brings to the market needs to be addressed as a financial value proposition. For instance, servicing customers better is not a value proposition. The value proposition should have a direct impact on revenues or expenditures. In general, value propositions that increase revenues are typically easier to sell to a customer than a reduction in expenses. The value propositions should be built from speaking with your customers.

Competitive Differentiation: If you are a small company with the same features and functions as a large company, it will be very difficult to compete with the resources of the larger company. Likewise, a small company with the same features and functions of another small company will also create a “slugfest” lengthening the sales cycle. Most likely the deal is lost because the competitor established a relationship with the buyer earlier in the sales cycle.

Sustainability: Many CEO’s believe that their company is the only player in their market space. What they don’t realize is that a large company has the resources and bandwidth to build a similar product rapidly. CEO’s should investigate defensive postures like patents to ensure sustainability.

Customer Buyer Profiles: Building out a buyer profile requires engaging prospects for in-depth interviews. The conversations should at a minimum include: what problem are you trying to solve, how much is this pain costing your company, and what is your buying process.

There is a tremendous amount of effort that goes into understanding a market, often beyond the capacity, resources, and bandwidth of a CEO.

For more information, please contact me directly.

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Are You Receiving Funding without Understanding Your Market?


recent blog posted by DaggerFoil Group that discusses why it is important to Understand Your Market Prior to a Funding Event.  There are key elements to understanding your market that includes:

  • Market Size
  • Competitive Differentiation
  • Differentiation
  • Value
  • Sustainability
  • Customer Buying Profiles

http://www.daggerfoil.com/receiving-funding-without-understanding-market/#sthash.5IjeQRqY.dpbs

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Software Proof of Concepts Best Practices II


The following was a question posed by a reader to the blog Software Proof of Concepts Best Practices written April of 2010. The question posed was rather interesting.

I’m working on a software Proof of concept project here in Finland and writing my master’s thesis related to the project for Lappeenranta University of Technology in the department of Innovation management. I read your blog post from April, 2010 (Software proof of concept best practices, https://ackbury.wordpress.com/2010/04/06/software-proof-of-concept-best-practices/ ) where you state the following:

“The indirect costs associated with an evaluation can often be up to 25% of the cost of the product.”

I was wondering the source of this statement, is it based on a scientific research, your experience, some sort of corporate research?

The costs analysis of a software proof of concept seems to be pretty complicated issue and this is one important aspect in my master’s thesis.
Hope to hear from you soon and thank you for an interesting article!

Best regards,

Mr. XXX –

It is nice to meet you virtually. This statistic came from my own personal experience. During the period 1996-2007 I was selling and implementing large scale global ERP projects with the likes of PeopleSoft, SAP and NetSuite. Coincidentally, I remember being in Finland on several occasions up in Jyväskylä.

My intent in this blog was to demonstrate that the evaluation process was as difficult as the actual implementation itself. To model out the costs associated with the implementation will be wide and varied:

1. How large is the project
2. How much exec project sponsorship
3. How large is the evaluation team
4. Are the requirements fully defined
5. Does the project team have clearly defined goals and metrix

Since there are so many variables in the selection process, a specific number may be rather difficult to obtain. Good luck with your thesis project. If you figure out a model that is more specific than the 25%, I would enjoy understanding it.

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How to Dominate the Competition in 2015 by DaggerFoil Group


An interesting post by DaggerFoil Group about dominating the competition in 2015!

Dominate the Competition ins 2015! Over the last few years there has been a massive transformation in the way customers buy in B2B technology markets. Yet, the vast majority of technology vendors take their products to market essentially the same way they have for the last 50 years.  Their Marketing organizations focus on creating leads, then handing those leads to Sales and sales reps take them through their process and close business….hopefully.  The underlying assumption is that sales reps own the customer through their buying process.

Competition

Unfortunately, most of the customer’s buying process is done before they contact a vendor. Today, studies indicate that 56-70% of the customer buying cycle is completed before they ever contact a vendor.  Sales engagement is less than the back half of the buying cycle!

– See more at: http://www.daggerfoil.com/dominate-competition-2015/#sthash.y9SfMjfo.dpuf

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Mercenaries of Capital


Attached please find a recent press release from Aver informatics, a Green Bay based company, invested by local WI Angels, moving to Ohio enticed by VC the Nevv Mercenaries- Drive Capital. This Fund has been invested by Ohio State ($50M) and by Silicon Valley’s VC Mercenaries associated with Sequoia Capital.

WISCPARTNERSYes, it may become a success story in Ohio, but how does that help the State, UW schools, or local economy or employment?

This is the precise challenge addressed by WISC Partners LP, a unique Operating Capital (OC) Fund, specifically created to fund, expand and execute resources of the globally placed and experienced Badger State Alumni Network (BSAN).

Wisconsin Investment & Strategic Capital combines the “Capital and Execution” to drive growth, employment and wealth creation in the State of WI while bringing the global resources of Capital, business infrastructure, markets and manufacturing to create and deliver value within the State of Wisconsin.

WISC Partners, invests with companies at various stages, with diversified technologies/products/markets to maximize the enterprise and hence the shareholder value. The Capital placed is sourced from high Net worth Individuals/Family Funds in WI, and the Badger Alumni Network. The Fund is chartered to give back up to 25% the returns to the GP’s to various academic/business organizations in the State. To learn or participate in WISC Partners LP please visit http://www.wiscpartners.com or call David Guinther (GP) at 608-256-9101.

We, with your support, will protect the “Brain-Drain” dream and loss of employment within the State of WI intelligently, effectively and collectively.

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WISC Fund


Certainly excited to join the Wisconsin Fund!  About the fund…

Wisconsin Investment and Strategic Capital (WISC) Partners Fund. WISC is positioned as an Operating Capital (OC) Fund for investment in Wisconsin based companies. The fund invests $150K to $2M in companies with Angel, Series A or Series B rounds. The Fund requires that the portfolio companies engage in a growth and /or exit driven Plan A-2, that is overlaid on the existing Plan A-1. The expertise and the deep executive reach of the Badger(WI) State Alumni Network (BSAN) is accessed to implement the revenue and Enterprise value growth. The Fund is designed to exit the investment within a 24 / 36 month period from investment with. 2-4 times return goals. The fund will invest in IT/ Healthcare / B2B and B2C Media, Cleantech and Semiconductor opportunities. The Funds General and Executive Partners have all hands on experience in building a wide range of very successful companies including learning from failures in the Hard Knox School of Entrepreneurship.

 www.wiscpartners.com

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The Seven Key Traits of a Successful Sales Person

Re-posting an article written for DaggerFoil Group on the seven key traits of a successful sales person

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