Robert Ochtel’s Blog

An Experienced Approach to Venture Funding

Entrepreneurs, Use General Technology and Market Trends to Define the Future for Your Start-up Company

The stock market always looks to the future.  This should also be true for first time entrepreneurs.  When defining your start-up company’s business proposition, you need to look at both the general technology and the general market trends of the future.  Why, because it is these general trends that will define the future market place for your technology, product or service offering.  General trends are often over looked by entrepreneurs, but venture capitalists always take a “big picture” view as to what technologies and markets will be pervasive five to ten years out in time. As is often the case, what is true and certain today regarding technologies and markets will not be true and certain five to ten years in the future. Therefore, as an entrepreneur you need to have a “big picture” view of the future and make sure your technology, product or service offering will have a role to play in the future, when defining a given market “problem” or “need”.  This article discusses the importance of creating this future frame work, based on general technology and market trends when presenting your technology, product or service offering to your potential investors.

Develop a Clear Understanding of the General Technology Trends

General technology trends change over an extended period of time.  Unlike the predictions often set forth by the technology pundits, a new technology does not take hold in the market in a year’s time frame. It often takes five to seven years or more for a new technology to take hold.  It even takes longer than that for a new technology to become pervasive and accepted by the general public.  Why, because there are many issues that come into play when rolling out a new technology.  These include the following:

  • Initial costs of new technologies are generally high,
  • Infrastructure roll-out takes time and is very expensive,
  • The new technology may not be ready for prime time, and
  • End-users do not always readily embrace new technologies.

These issues can substantially delay the rollout of new technologies.  But in the whole scheme of things, the entrepreneur must be aware of new, general technology trends, their timing and availability to the market.  In this context, having a good understanding of general technology trends, their availability, and how they can affect your start-up company’s product or service offering, in a positive or negative manner, is key to positioning your start-up company and its product offering in the future markets. Knowing and properly presenting your start-up company’s technology product or service offering in the context of these general technology trends will not only gain you credibility with your potential investors, it will provide the underlying and necessary credence to overall potential value of your start-up company and its technology, product or service offering. This is important, as investors need to know and believe that your start-up company’s technology, product or service offering has the ability to create long-term value in the context of the general technology trends of the market.

Review and Understand the General Market Trends

Knowing the general market trends is often a key to positioning your start-up company’s technology, product or service offering to your investors.  General market trends provide the “big picture” of what the future markets are going to look like.  What are the long-term market growth areas?  Will these market growth areas be the same as those markets today? What will the population look like in five to ten years? What will drive the long-term economic engine of the US and world economies?  These high-level general market trends need to be considered, understood and addressed by entrepreneurs looking to define the future for their start-up company’s technology, product or service offering.  Knowing and being able to appropriately define the general market trends of the future will provide potential investors with the necessary context as to how or why your start-up company’s technology, product or service offering will be important to addressing the “problems” or “needs” of future markets.  This is very important to investors, as they need to understand the “big picture” and how your start-up company’s technology, product or service offering will impact the markets of the future.

Define Your Start-up Company’s Product Offering in the Context of These General Technology and Market Trends

As an entrepreneur, remember you are trying to sell your technology, product or service offering to potential investors.  To properly do this you need to sell a vision.  Why, because a vision necessarily provides context, looks to the future, and requires an appropriate presentation of how your start-up company’s technology, product, or service offering fits within the general, future technology and market trends.  This vision necessarily needs to define your start-up company’s product offering in the context of both future technology and market trends.  Not doing so will necessarily hurt your efforts to convince investors of the potential future value of your start-up company and its technology, product or service offering.  By properly painting both the general technology trends and associated general market trends and how your start-up company’s technology, product or service offering provides an opportunity to secure a unique position with regard to these general trends, investors will then buy in to your vision and are much more apt to invest in your start-up company and its technology product or service offering.  Therefore, take the time to step back from your start-up company and its technology, product or service offering and take in the “big picture” in terms of both general technology and market trends.  This will allow you to develop the necessary context and associated vision for your start-up company. It will also allow you to provide the “big picture” contextual view to your potential investors, providing the necessary road to securing funding.

As an entrepreneur looking to present the future to your potential investors, you need to necessarily have a good handle on both the general technology and market trends.  This will allow to you provide the appropriate context as to how and why your start-up company’s technology, product or service offering will be both important to addressing these trends and how at the same time you are solving future “problems” and “needs” in support of these overall trends.  The bottom line is that by addressing these general, future technology and market trends, you will be providing your investors with a vision that allows them to see the future appropriately and how your technology, product or service offering will create value and play an important role in this future.

This information was taken from Robert’s new book: “Business Planning, Business Plans and Venture Funding – A Definitive Reference Guide for Start-up Companies”.  Available at www.amazon.com.  For more information on the book go to www.carlsbadpublishing.com.

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September 28, 2009 - Posted by | Business Planning, concept, Venture Capital, venture finance, Venture Funding | , ,

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