Robert Ochtel’s Blog

An Experienced Approach to Venture Funding

Developing A Corporate “Vision” Will Help Your Start-up Company Pre- and Post-Funding

Most entrepreneurs start their companies without a company “vision”- an idea of what the overall purpose of their start-up company is trying to accomplish and how their product is going to benefit their customers and the market.  This lack of vision or purpose can be detrimental to your start-up company both during the pre- and post funding stages of development. As without a vision, your company can often falter due to an overall lack of focus and self-described identity in the market.  So it is important that while you are working to develop your start-up company and its technology, product or service offering that you should create an overall vision for your start-up company; focusing on the long term benefits your technology, product or services offering brings to both your customers and the market. This article outlines some of the pre- and post- funding benefits that result from an entrepreneur having an overall vision for their start-up company.

Henry Ford Had a Vision.

From the beginning, Henry Ford had a vision for his automobile company – “create a car that is affordable to the masses”.   This vision drove him to develop an automobile company that was primarily focused on reducing the costs associated with producing the automobile – the Ford Motor Company.  Although, from conception, Mr. Ford did not know how he was going to accomplish his vision for his company, he strongly believed that creating a car that was affordable to the masses would benefit his customers, the market and the U.S. economy.  This vision led to the development of production assembly line as it applied to the automobile industry, and although not originally his idea, the application of assembly line to the production of automobiles substantially changed the automobile industry – making it one of the most successful industries in history, and at the same time helping facilitate the change in the economic drivers of America from an agricultural based society to an industrial based society.  In addition, the US automobile industry was historically the primary reason for the rise in the middle class in the United States. Therefore, Henry Ford’s vision for the Ford Motor Company had a far reaching impact on the US economy and the American society in general.

 Do You Have a Vision for Your Start-up Company?

Most ultimately successful start-up companies begin with a disruptive technology, product or service offering that changes the basis of competition in the market.  This disruptive technology, product or service offering alone, does not necessarily ensure success in the market.  But, by researching the market, your competition and doing the appropriate amount of due diligence, you, as an entrepreneur, can acquire the appropriate knowledge to better understand that long term general trends in the market from both a macro-economic level and micro-economic levels. In addition, developing an understanding of the social market trends, and then determining how your start-up company’s technology, product or service offering can help drive and/or benefit society, by facilitating these long term trends, will provide you with the proper insight to develop a “vision” for your start-up company.  It is through this due diligence process, acquired socio-economic understanding, and resulting vision, that you will successfully be able to develop a long-term defensible position your company in the market.  Past examples of this include Ford Motor Company, Apple Computer, Wal-Mart, and many others.  All of these companies understood the long-term macro- and micro-economic trends as well as the social trends driving the market, and then used their disruptive technology, product or service offerings to uniquely position their companies, and ultimately create a dominate market position for their companies and their technology, product or service offerings. 

Investors will Buy Into Your Vision.

Having a vision for your company, in the pre-funding stages of your company’s development, will help you define your company to your potential investors.  Promoting this vision will also allow these same investors to quickly understand the big picture of benefits of your company’s technology, product or service offering to your customers, the market and society.  Therefore, it is important to do your market research and competitor due diligence early so that you can create a vision of your company and its technology, product or service offering. This will provide your potential investors with the ability to better understand both the macro- and micro-economic as well as the social trends, and then quickly envision how your company and its product offering can have a long term sustainable impact on the market. Developing a vision can provide the “hook” to get your investors committed to investing you and your start-up company. 

As a recent example of this, Pure Digital Technologies, Inc., has created Flip Video, a line of simple, low-cost, pocket-sized digital camcorder products featuring built-in software that makes it easy for everyday consumers to instantly capture, edit, and share video and then easily upload this content directly to online video sharing sites, including YouTube.  Recognizing the “YouTube” video phenomena as a long-term, social trend – the desire to facilitate real-time video access and then share this content, within the teen and young adult population segments, Pure Digital Technologies created a compelling product for to address this market need.  Again, it was through their understanding the general socio-economic market trends, and the application of technology to address these trends, that Pure Digital Technologies has created its corporate vision and then developed a unique product offering to be a major player targeting the end consumers.  It has also allowed them to attract major venture capital investors like Sequoia Capital, Benchmark Capital, Focus Ventures, Crescendo Ventures, Steamboat Ventures, VantagePoint Venture Partners, and Samsung Ventures. Therefore, by developing a technology, product or service offering with a vision, this will help facilitate you and your start-up company to attract and secure third party investment capital.

Vision will Provide Your Company Focus.

Developing a vision for your company can also be beneficial to your start-up company in focusing on its post funding activities.  As such, it is your defined company’s vision will allow you to focus your company’s day-to-day efforts regarding:

  • Product Development,
  • Marketing,
  • Sales,
  • Strategic Partnerships and
  • Other.

As an example, if your company’s vision is to provide the most leading edge products in the market, you will focus your company’s product development efforts to provide the market with leading edge products that differentiate themselves in the market through their innovative features applications or service offerings.  In addition, this vision will also impact how your start-up company markets and then sells these same products to the market.  It will also drive your company to focus on specific types of potential strategic partnerships that help facilitate the overall vision of your company.

This corporate vision will also manifest itself throughout your organization, from the CEO down to the lowest level employee. This will include setting the overall corporate strategy and the development of individual product marketing plans and tactics. The end result is that all employees, within your start-up company, will not only understand the overall corporate vision, but work to facilitate this vision in their everyday tasks.  This will ensure efficiency and efficacy throughout the organization.  This type of focus, as a result of your corporate vision, will ultimately provide a significant benefit to your start-up company, thereby facilitating its success in the market.

Vision Can Create a Long-Term Successful Company.

Your company’s vision can create long-term success for your company.  By recognizing the value of a corporate vision and appropriately instituting this vision throughout your company, you can then create a long-term and differentiated position for your start-up company in the market. As a result, customers will recognize the value of your technology, product or service offering in the market and be willing to pay for this differentiated technology, product or service offering.  Excellent examples of this include Sony, Apple, Toyota, etc.  All of these companies recognize their the value of creating a unique position in the market by developing a long-term vision that that creates value that is clearly recognizable to their customer base.

All start-up companies can benefit from developing a vision for their company and their technology, product or service offering.  This vision must be based on long-term macro- and micro-economic trends as well as social trends in the overall market. By doing your research and due diligence, the development of this vision can set a clear path forward for your company that will provide you with benefits during both the pre- and post funding phase of your company development. At the same time, this vision can also create a long-terms sustainable position for your start-up successful company in the market.

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May 25, 2009 - Posted by | Venture Capital

2 Comments »

  1. Hello Robert.

    Well written. That is the way we work at HBR Labs and the vision we developed helped us developing http://www.showdocument.com – an easy to use collaboration service that give people the capability to meet and discuss documents and other content on the spot.

    Thanks,

    Yuval

    Comment by Yuval Moed | May 25, 2009 | Reply

  2. Hi Robert,

    From a fellow San Diego guy, I’ve really enjoyed reading your blog posts and have your RSS feed saved into my reader.

    This post, in particular, really rings true. When we got started with our business, we realized we were trying to do to much and branch too quickly. When we narrowed our focus and gave ourselves a single BHAG (big hairy audacious goal), then we began to see exponential progress. It took us a while before we figured out what we wanted to be when we grew up, but it is absolutely worth the time and effort to get your vision down early. It helps avoid costly trials that do not relate to the long term vision.

    Thanks again!
    Steven

    Comment by Music Lessons - Steven | May 27, 2009 | Reply


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