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Question: What is needed to prove that a great idea is a business that is worthy of investment?
Answer: In the early stage of business development it is important to prove the product concept, prove that a market exists, what type of business model will work best, and begin to put a first class management team together. Investors at this stage are looking for a unique idea, with as much protection as possible, and a significant level of investment by the founders. For example, if the concept is patentable, the founders should have invested the $10K to $30K required to file patent. They also want to hear how the founders intend to pay them back. Investors at this stage are sometimes referred to as Angels, Friends and Family, or Doctors and Dentists.
Question: Why not skip that step and obtain venture capital funding?
Answer: Some mistakenly look towards Venture Capitalists (VCs) at the early stage of business development without understanding that VCs usually invest in businesses, not business concepts. They look hard at the market and revenue potential and expect growth in excess of 50% per year. They also look at market acceptance. How many customers do you have and what testimonials can you provide. They also look hard at the management to determine whether they have a track-record of guiding a company of this type through the anticipated growth.
Lastly, they would like to understand the specifics around the exit strategy. Most entrepreneurs pay lip service to this item. They think it is sufficient to say the top three: Be Acquired, Go Public or Continue to Run it. It does not occur, that if the idea is to be acquired, then identify who the target companies are, what these companies look for in acquisitions and what steps the company will take to build something attractive to them.
Question: Why does a firm need a technology road map?
Answer: A technology road map ensures that the required technologies and technical capabilities are available when needed. This connection is important for two reasons. First, it gives the company the vision it needs to make critical make or buy decisions, and second, the time incorporate new technology needs into staffing plans and career paths.
Question: What is one of the most common mistakes technology and telcom companies make in business and marketing planning?
Answer: A common mistake is not linking corporate values to corporate messages. For example, if a corporate value includes being a world-class product developer delivering the highest quality, state-of-the-art products, relying on cutting-edge technologies, then you should check to see that every aspect of the business carries this message forward.
Business planning documents, SEC filings, public relations messages, seminars at trade shows or conferences, advertising, product documentation, sales and service training, customer education, employee comments should emphasize this message. In that way, everyone knows what is important and it helps in making day-to-day decisions.
Continuing the example, the financial model would show a higher than average R&D Component. Product managers would ensure that each generation or release of a product would have new cutting edge technologies and features in them. Marketing would not put out communications stressing low prices to counter a new competitor offering lower prices.
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GROWTH STRATEGIES
