A VC in Vacationland

Technology Agnostic Solutions Win Again!

March 27, 2010

Image by psilver (silverph) via Flickr

My good friend, Dan Dershem, CEO of LeanLogistics, related the following "technology adoption" story to me. Although his ten-year old daughter had been asking for a cell phone ("like all my friends have, Dad!"), Dan had been resisting her pleas. Perhaps changing tactics due to a friend's advice, she asked for an iTouchfor Christmas, which unsuspecting Dan bought her. Right after Christmas, sitting in a ski resort parking lot, she announced from the back seat that she was communicating through her iTouch with a classmate over a class project they had due in the new year. The WiFi enabled iTouch let her to talk with her friends just as easily as if she had a cell phone. Another example of the tech user slipping around "enterprise platforms" (Dad's reluctance, in this case) and gaining access to applications they need to run their lives.

The lesson is clear for budding entrepreneurs: the more you can empower your users, make their lives easier and provide continual value and be technology agnostic, you will be a winner. Trying to tie user to single platform solutions may work for a time (watch out Amazon Kindle and Apple iTunes!), but ultimately the user community wants to be able to access solutions through a variety of technology options.

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Don’t Compete Against Rivals; Make Them Irrelevant

March 20, 2010
Image by Steve Rhodesvia Flickr

One of the first "will I invest?" criteria I look for in a start-up business plan is how a new company plans to outfox/outplay/outmaneuver competitors. Surprisingly, it is often an area that is ignored, or detailed with a matrix showing the new offering to be far superior than anything on the market. That is when I hone in of why the entrepreneur thinks they are going to beat out current rivals.

The beauty of the concept of making rivals irrelevant is that it happens all the time in all industries. Google, for example, initially took Yahoo, AOL, Microsoft and the rest of them to the cleaners on search. But the latest statistics show that Facebook is fast becoming a top origination for search on the web. This is clearly related to the number of people who not only have Facebook as their home page, and then not bother to change pages to originate search. Should Yahoo and Google be concerned? They better…

But the reality is that making it happen is much harder than entrepreneurs think. Here are a few suggestions on how to make your business plan be a competitor destroyer:
1. Get top industry gurus as investors/advisers–having the names of leading angel investors, industry experts, successful entrepreneurs (calling Larry Page!), etc. as supporters of your business not only gives you access to strategic advice about beating competitors but lets potential new investors and partners know that other smart people have vetted your ideas.
2. Detail roll-out plans for your business model–too often, a good idea does not have enough thought process into the "how" of execution. If, for example, you are going to use viral marketing techniques, great, but please explain exactly how these are going to work and how you are going to pilot techniques to test their success. Explain clearly about how these techniques are going to reach your target audience and why they will choose you over a rival–better, more diverse content? easier to use web-based tools? enhanced social/business networking opportunities?
3. Don't look in the rear view mirror–too often, business plans compete against yesterday's rivals. You have to assume that somewhere out there in the world, another entrepreneur is working on your idea, or one very close to it. They will be your future rivals and your strategies should reflect how they might blunt the advantages your are building into your plan.
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Green Logisitcs: Healthier Snacks in the Supply Chain

March 13, 2010

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I don't know about you, but my supply chain runs through my stomach. Let's not discuss where it goes from there. The revamped Business Week (thanks, Bloomberg, for revitalizing what had become an increasingly useless magazine) featured an interesting article recently on Pepsi hiring a team of scientists to develop a healthier alternative to Doritos. I write this as I watch the NFC payoff games, eating, you guessed it, Doritos.

What does this have to do with green logistics? In my mind, green logistics is not just about better packaging, buying local, reducing carbon footprints, etc., but also about healthier products inside the bag/box.

So kudos to Pepsi for realizing that being healthier is also an important part of why green logistics matters going forward.

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March 8, 2010

If you are interested in the future of wireless medicine, check out this great video featuring Eric Topol http://www.tedmed.com/videos?utm_source=TED+MED+Mailing+List&utm_campaign=87f3fb7a2e-TEDMED+-+More+Videos+Released+-+heywood+thru+topol&utm_medium=email
The Misery (and Process) of Fund Raising

March 6, 2010

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My friend (and CEO of two of my portfolio companies-Vtrenz & Avenue Right), Brian Gramer pointed me to a very well written Blog on the process of raising venture capital. Based on the experience of the team at the Search Engine Optimization start up, seomoz, the Blog chronicles the mistakes, challenges, right things to do, mistakes not to make, etc. etc. for entrepreneurs looking to raise venture capital. It is well worth the hour to review the insights and to internalize the lessons.

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TerraCycle: a Real Business Model for Recycling

February 27, 2010

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Finally…a real business model for the recycling business. TerraCycle has created a company that can actually provide the correct financial incentives across the waste stream to allow all participants to make money. In a nutshell, Terracycle pays for recyclable materials from companies, charities and schools, turns them into "cool" products and sells them for a profit. Only five years old, the company is transforming ideas about how to best reuse packaging materials. And they have convinced many major consumer products companies–Kraft, Mars, PepsiCo, General Mills and Kimberly Clark to participate in their programs.

By the end of 2010, TerraCycle will process millions of recycled consumer packages from across the US, from brands such as Capri Sun to M&M's. TerraCycle's five warehouses process consumer packages sent in from over 8 million people, who are paid on average 2 cents per package. The materials, along with unused rolls of packaging materials, are processed into pencil cases, backpacks, bag (see picture) and storage bins. These are sold at Target and Home Depot, among other leading chains. Their product licensing model has been the key to success, atttracting companies like Disny who want to be more "green" with their consumers.

TerraCycle is profitable and expanding globally. And breaking all the rules of running a start up, according to an interesting article in the Financial Times. Note-viewing the article requires free registration on the FT site.

Check them out…

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Book Review: The Widow Clicquot

February 20, 2010

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I admit that I initially read this book due to my great interest in wine. But I soon realized that it was really a great study in successful entrepreneur-ism under incredibly challenging conditions.

The Widow Clicquot is the story of France's first Champagne empire, one created and ruled by an entrepreneurial woman who overcame huge challenges in a man's world of the late 1700's-early 1800's. I highly recommend it to all women entrepreneurs who want some insights in making it in a male dominated society.

I won't go into the whole story as the book is a quick read, but just review a few highlights. Barbe-Nicole Clicquot Ponsardin was born into a middle class entrepreneurial family in 1778 in Reims–today the world capital of Champagne production. She barely survived the French Revolution in 1789, only by a kindly servant smuggling her out of danger. She married young, and asked for the families wine shipping business as part of her dowry. Her husband promptly died and she was left with running the business. Wars constantly shut down European borders to wine exports, poor vineyard management ruined vintages, business partners were untrustworthy, to name a few of her travails. Having a top sales guy who traveled Europe, avoided arrest at every turn and was consistently loyal to her for years was a key success factor. She expanded in the early years beyond shipping other producers wine into making her own Champagne, working tirelessly to create a cachet around her brand by convincing kings, queens and nobles–especially the Russians– to fall in love with the bubbly. At least twice the business should have failed but Barbe-Nicole always found a way to survive, including smuggling her wines across closed borders.

To be sure, the book has its faults. Little is known about Barbe-Nicole's personal life and much of her business savvy needs interpolation from scanty company records. This does not take anything away from her remarkable feats in surviving during a time when war was the norm and peace a distant hope in Europe. The author takes liberties with lots of references on what might have happened instead of facts. But the facts do not exist and I never felt she seriously overstepped her bounds.

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Videos: Why More Start Ups Should Use Them

February 13, 2010

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Videos are a great selling tool–as in a picture(or video) is worth a thousand words. But few start ups use videos to explain their solutions, to train clients on their solution, or to market to potential customers.

One of the start ups I advise, GSGTelco, which provides software and outsourcing services to manage wireless and wireline phone billing for customers, makes a very effective use of video technology. Production of one of their videos takes less than a day and is all done with inexpensive on-line video development tools.

GSGTelco uses Camtasia Studios software for their video production. You can view a 2 minute video they recently made on their newest wireless lifecycle management product here. There are many other software products for video production you can also evaluate, such as wistia or read the reviews on Google.

Videos can market/sell/train 24/7, 365 days a year. They can be at that meeting where you cannot be. They give start ups the ability to stretch scarce marketing, training and sales resources. Why not give them a try?

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February 8, 2010

Attention Federal Deficit Hawks! Check out the Sunday NYTimes article on how cutting your least favorite program will reduce the deficit… http://www.nytimes.com/2010/02/07/weekinreview/07calmes.html?scp=3&sq=deficit&st=cs fascinating (and depressing)…
Twitter for Business?

February 6, 2010

Image via CrunchBase

No, I don't really Twitter. A few tweets a month. Perhaps more someday when I figure out what I want to say. I tend to be a late adopter of social networking unless it involves my family.

But Twitter for business got me thinking about whether this phenomena will translate, like IM, cell phones and related technologies.

Here's why I think it will happen in supply chain:

1. Speed–people need answers fast in today's business world and Twitter is one of the fastest ways to do it.
2. Conciseness–140 characters forces concise, clear answer…a real benefit for fast communication of critical issues.
3. Networks–you can set up a network of suppliers and let them instantly know about changes in orders, deliveries, etc.

Having said all this, they still do not have a concept or business model for business communications solutions. We'll see if business becomes a late adopter, or some other solution emerges that trumps the Twitter world.

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