Blog Posts

With the very low interest rates over the past 10+ years, I have noticed how many very young MBAs with a background in Finance are working in the venture capital industry, not as analysts, but either as observers or even as board members.

While they are intelligent and may find their job and university education to be sexy on paper, I do question their lack of experience and expertise.  (Most often , I even wonder how many have ever worked “hands-on”  in the particular industry and an early stage company environment.)

Questions and points to review.

70%+ of companies are not able to return their initial investment to their investors.

VCs today are often less knowledgeable about the industry and the technology than the entrepreneurs trying to run the company.

The more money venture capital teams manage, the less time they have to nurture and advise entrepreneurs. Yes, there actually is a need to get experienced CEOs and senior members on board, to support the investors with running their early stage company operations particular when it comes to sales and marketing.

Venture capitalists invest in good people and good ideas.. no, not really  –  more importantly they invest in good industries.  High growth and accelertion within a particular industry vertical are most important to investors.

Indentifiying competent management is very difficult. Many young companies are run by techies today – with zero knowledge of basic sales and marketing principles.  Most of them cannot execute company operations successfully. These CEOs often lack interpersonal communication skills required to find effective solutions to generate traction and user growth quickly. ( A competent finance MBA on the board will not make a big difference)

(A special thank you to the team and Bob Zider in Menlo, Park)

Generally speaking ” If you do something with open source that is irresponsible and that causes harm, you should go to jail – just like if you kill someone when driving a car..” ( Wendy Hall, United Nations AI advisory body)

For the last few weeks, I have been speaking to early-stage companies and their young team of developers and entrepreneurs. Many are still building a technical solution with various components, and when I asked the question where they are in the market cycle, they are not able to answer the question. What market cycle ? To help them move forward with their marketing and sales strategy, I encourage them to read yet another book, see below, currently in its third edition.

 

 

As apposed to developer teams building individual software modules for enterprise customers, designing an open platform and  PRACTICAL (uncomplicated) ecosystem first, may prove most beneficial for future sales growth.

Benefits include :

1. Establishing a customer relationship, as a “day to day” user experience
2. Growing your brand name using meaningful data points and services within a system’s environment
3. Accumulating more enterprise customer purchases in increments, defined by broader needs, and predicting customer benefits with the availability of new technologies and  “combinational”  flexibility

Requirements :

This platform approach requires a core value proposition that is practical and easily understood, reflecting inherent and particular customer needs, ideally also strengthening distinctive competitive advantages i.e lowering customer switching costs and integration expenses for the service provider.

Challenge :

So, what data sources and services are most important for your particular  enterprise customer, and how will you take advantage of this acquired knowledge ?

Start with a small platform, keep it “light” and very easy to use.

“In a separate commissioned survey by Forrester Consulting, B2B customers ranked easy-to-use, up-to-date DIGITAL customer interfaces as the most important characteristic of organizations they prefer to work with….

Yet … they also emphasized the need for a strong, ONGOING relationship with their sales reps. In fact, more than half said they would stop doing business with a company that failed to meet face-to-face regularly..” (Deloitte Digital)

So find and build the best sales process and start using both.

Report below with a few additional points, examples and questions.

Enterprise B2B Sales

Today, while reviewing the background of an individual, I was disappointed to see that the education listed on Linkedin was not correct, and this does support my argument that many profiles on LinkedIn are becoming increasingly “superficial, eccentric and flaky.”

Moving forward and to save time, I will ask for references immediately plus a properly written and updated CV.

No reason to run to the Middle East.

I do feel that many European startups take a much leaner approach in building a company base with reliable traction first. As there traditionally has been less money to be distributed, the European early-stage companies are often much smaller and need to work frugally. Given the reset in VC funding and the SVP shock in the United States – many smaller venture capital companies and their early-stage investments will be “flushed out”.. and disappear. In my opinion, this is a “natural” correction.

Below is a book that was very popular 10+ years ago and if you’re not familiar with these principles you should buy the book for your team, and practice practice practice !! No reason to run to the Middle East.

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While many companies have technical expertise, their focus on value positioning / marketing and customer communications often fall to the side. A perfect example is the number of AI and ML companies still offering to build models – please stop already. Communicate a different message to show tangible value.

Please also read this book .. so that you continue to offer value, and not just another “me-too” technology.

” Davidow clearly spells out 16 principles which increase the effectiveness of marketing programs. From examples as diverse as a Rolling Stones concert and a microprocessor chip, he defines a true “product.” He analyzes and explains in new ways the strategic importance of distribution as it relates to market sector, pricing, and the pitfalls it entails. He challenges some traditional marketing theory and provides unique and important insights developed from over 20 years in the high-tech field. ” (Bill Davidow)

“Giving the people what they want is fundamentally and disastrously wrong. The people don´t know what they want.. provide them with something better.” (Samuel Rothapfel, 1920´s – Value Innovation)