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An Experienced Approach to Venture Funding

Entrepreneurs, a Properly Developed White Paper will Help Your Start-up Company Secure Traction in the Market

Entrepreneurs need to focus on a lot of things to help make their start-up companies become successful.  When it comes to securing customers and traction in the market, this is often one of the most difficult tasks to accomplish.  With a lack of funding, limited credibility, and an unproven technology, product or service offering, start-up companies need all the help they can get to secure the attention of potential customers and gain traction in the market.  After an initial successful corporate overview presentation, start-up companies are often asked for more information so that interested individuals, within their targeted customer base, can go back and share what they have learned with their colleagues.  More information is also often  a key and necessary component for these same targeted customers to make an informed decision as to whether to move forward to the next steps for considering your start-up company’s technology product or service offering.   Providing this necessary information is often best accomplished with the development of a white paper.  A white paper is a document that provides an overview of your start-up company’s technology, product or service offering and at the same time provides the necessary details regarding how this product offering is used in the targeted end application it is intended to serve.  In addition, a white paper also provides an overview of the benefits, both technical and financial, so the end customer can better understand the overall utility of using your start-up company’s technology, product or service offering in their end market application. This article focuses on the need to develop a white paper to help your start-up company secure traction in the market.

Provide an Overview of Your Technology, Product or Service Offering

A white paper should provide your targeted customers with an overview of your start-up company’s technology product or service offering.  Here, as an entrepreneur, you need to describe in detail what your product offering is and how it is differentiated from other competitor product offerings on the market. Potential customers that have heard an overview presentation regarding your start-up company are often interested in discovering more regarding your technology, product or service offering and a white paper can be that vehicle to provide the necessary details. Remember, as a start-up company, it is often very difficult to get a targeted customer to change from their current competitor’s “solution” to a new start-up company’s “solution”.  So, as an entrepreneur, you need to provide the necessary details that give them a reason to consider your start-up company’s product offering.  If you are successful, you will more than likely secure an internal advocate or “champion” for your start-up company’s product offering for consideration in their end market application.   This will go a long way, as securing the proper internal corporate “champion” can often provide the necessary credibility to move your start-up company’s product offering to the next level of consideration within your targeted customer’s company. 

Outline How Your Product Offering is Used in the Targeted End Market Application

One of the key aspects and purposes of developing a white paper is to provide a description on how your start-up company’s technology, product or service offering is used in the targeted end market application.  This detailed description will provide your targeted customer with the ability to properly understand the full utility of your product offering and how it is differentiated from your competitors’ product offerings.  More often than not, and depending on your start-up company’s product offering, you will need to provide a full technical description of your start-up company’s product offering and how it will be used in the end market application.  This description should provide the necessary detail so that the technical individuals (e.g., system engineers, application engineers, etc.) within the targeted customer will have a full appreciation of how your product offering works and how it is differentiated from other product offerings available in the market.  Remember, as an entrepreneur of a start-up company, you have a lot of people to convince within your targeted customer’s company, that you offer a new product offering that is truly differentiated in the market and a proper detailed description of your technology, product or service offering within the end application will help with this task.

Provide an Overview of the Technical and Financial Benefits

A white paper also needs to describe both the technical and financial benefits of your start-up company’s technology, product or service offering.  Here, you need to properly delineate not only how your product offering is technically superior to your competitors’ product offerings, but you also need to outline the financial benefits of using your start-up company’s technology, product or service offering.  As an entrepreneur, you need to remember that all of your targeted customer’s decisions as to whether to use a new technology, product or service offering come down to a business decision.  As such, unless there is a substantial financial benefit to using your start-up company’s product offering, you will not be seriously considered by your targeted customers.  Therefore, after providing an overview of the technical benefits of your product offering, you need to properly delineate the financial benefits.  This will provide your targeted customers with the necessary information to make an informed decision when considering your start-up company product offering and enhance your ability to gain traction in the market.

Developing a well thought through white paper that properly describes your start-up company’s technology, product or service offering is often necessary to secure traction in the market. After a successful corporate overview presentation, a properly developed white paper can be used as a tool to promote your start-up company to your targeted customer base. By providing an overview of your start-up company’s technology, product or service offering, a detailed description of how this same product offering is used in the end market application, and an overview of the technical as well as the financial benefits, your white paper provides the necessary vehicle for your targeted customers to make an informed decision to move forward with your start-up company’s product offering.  Remember, gaining market traction is often very difficult, but with a properly developed white paper you can provide your targeted customers with the necessary information to make an informed and expedient decision regarding your start-up up company and its technology, product or service offering.

December 29, 2009 Posted by | Venture Capital | 1 Comment

Entrepreneurs, a Well Thought Through Go to Market Strategy will Increase Investor Confidence

Venture capitalists are always looking for a reason not to invest in your start-up company.  By their very nature they are risk adverse. Even if they like your business concept, believe in your executive team, and have confidence in your business model, they still need to be assured that your start-up company’s technology, product or service offering will be able to secure immediate traction in the market.  The ability to develop early traction in the market is a key to securing revenue and convincing investors that your start-up company is real and will produce the expected returns for their early stage investment. By developing a well thought through go to market strategy, you can convince investors that your start-up company will be successful in the market and at the same time increase their confidence level. This article focuses on the requirements for developing a well thought through go to market strategy and the  things you need to focus on as an entrepreneur to be successful in this process.

Identify and Prioritize Potential Revenue Sources

Identifying and prioritizing your targeted revenue sources will help you develop a well thought through go to market strategy.  Here, prioritizing your near term revenue sources will provide your start-up  company with focus and at the same time develop near-term cash flow, a key for any successful start-up company.  Often, start-up companies have many potential revenue sources that can generate cash flow for their start-up company.  Some of these revenue sources will take time to secure both from a development and time to market perspective and from a customer development perspective. Other potential revenue sources may be much more immediate.  The key here is to identify those revenue sources that will allow your start-up company to generate cash flow as soon as possible.  By doing so, you will provide your investors with confidence and at the same time provide the ability to expand your horizons as you move forward and continue to develop your start-up company.  By identifying and prioritizing your near term revenue sources you can develop a go to market strategy that is sound, create immediate market traction, and inspire investors’ confidence as you move forward as a start-up company.  So, take the time up front to identify and prioritize your near term revenue sources, it will increase your chances of success in the market. 

Map Out Your Rollout Schedule with a Realistic Burn Rate

Once you have identified your near term revenue sources, as an entrepreneur of a start-up company, you want to make sure you have enough money available from your investors, to achieve both your start-up company’s product development goals and objectives, as well as your requirements to secure near term customers and generate top line revenue.  To do this you need to map out your start-up company’s technology, product or service development and rollout schedule along with your required burn rate – the amount of money you will need to spend each month to achieve your all of your development and go to market goals and objectives.  The key here is to be realistic.  Investors know that it always takes twice as long and twice as much money to achieve traction in the market.  So, you need to provide yourself and your start-up company with some run way to achieve your development, market, and revenue objectives.  Therefore, spending the time to thoroughly review your development costs and mapping them to a rollout schedule takes into consideration the amount of time it takes to secure real paying customers is a key to success as a start-up company.  Here, it is better to under promise (within reason), and over deliver than it is to over promise and under deliver.  As such, investors have a realistic understanding of what it takes to get traction in the market and they will appreciate a well thought through roll out schedule that has an associated burn rate that will allow you to meet your start-up company’s goals and objectives in the market.

Develop a Targeted and Prioritized Customer List

Finally, as an entrepreneur, you need to identify your target customers and develop a prioritized list of these same customers that will be interested in your start-up company’s technology, product or service offering. This targeted customer list needs to be well thought through. Not only do you need to identify your target customers, but you need to consider which customers will take time to develop, which customers have an immediate need, and which customers are risk takers. In this case, it is always better to call your customers and determine their interest up front, as this will allow you to prioritize your customers and at the same time identify those customers that will be early adopters of your start-up company’s technology, product or service offering. Having done this homework up front, you can often identify which customers will be willing to become early beta customers and at the same time provide your start-up company with instant credibility with your investors. So, take the time to not only develop a targeted customer list, but prioritize your customers as early adopters, this will help you when engaging with potential investors. 

Developing a well thought through go to market strategy takes time and effort. Therefore, as an entrepreneur, you need to take the time to develop a realistic go to market strategy that will afford you success in the market and provide for the ability to create market traction and secure near term revenue. To do this, you need to identify and prioritize your potential revenue sources, map out your development schedule with a realistic burn rate and finally develop a targeted and prioritized customer list.  All of these things will help to ensure success in the market and at the same time provide your investors with the necessary confidence to invest in your start-up company.

December 22, 2009 Posted by | Venture Capital | Leave a comment

Entrepreneurs, Expanding Beyond Your Core Competencies will Help You Define Success in the Market

Start-up companies and large companies alike have a set of core competencies that define the company, their product and service offerings, and their position in the market.  More often than not it is this set of core competencies that provide the company with their baseline competitive advantage in the market.  Often, for start-up companies, these core competencies although unique do not necessarily provide them with a complete product offering or the ability to offer a new and different go to market strategy.  Many times these same start-up companies must look beyond their own core competencies to complete their product offering and at the same time provide a unique end-user experience.  This article focuses on looking beyond your core competencies to differentiate your start-up company and its product offering to help define your success in the market.

Beyond Core Competencies

Every start-up company must have a core competency that uniquely defines the company and at the same time provides a long-term competitive advantage in the market.   For most start-up companies this core competency is based on a patented technology, process or service offering.  Many times, this core competency, although unique, is not enough to define a “complete” product offering in the market.  So, as a start-up company, you need to define what it takes to compete in the market and at the same time differentiate your product offering beyond its baseline core competency.  This requires you, as an entrepreneur, to take a holistic approach to the market and define what other capabilities, features, functions, and services are required to compete in the market. Many of these market driven requirements are well beyond the core competencies of your start-up company and will require you to partner with other companies to provide a complete product offering and at the same time differentiate your product offering in the market.  So, as an entrepreneur, you need to realize that your start-up company’s core competencies may not be enough to effectively compete in the market.  At the same time, because of the investment requirements, and time to market issues, it is often more expedient to partner with other companies to complete your product offering and compete with a differentiated product in the market.

Strategic Partners

Strategic partners can often be the key to expanding your start-up company’s product offering beyond its core competencies.  At the same time, strategic partners can provide your start-up company with the following:

  • Access to new markets,
  • Insight to the overall product development requirements,
  • Sources of new revenue streams,
  • Help to uniquely position your company in the market, and
  • Provide a new and differentiated go to market strategy. 

Therefore, by working the appropriate strategic partners you can develop a “complete” product offering that you would not be able to develop and offer on your own.  This will help to define your product offering and in the long run will more often than not help provide your start-up company with additional success in the market.

The User Experience

One other consideration, when looking to expand your product offering beyond your company’s core competency, is to focus on the end user experience.  Is your product easy to use?  Does your product address all of the needs of the customer?  Does your product provide the customer with a satisfying experience?  Many times these things cannot be only addressed with your start-up company’s core competencies. They often require additional capabilities, features, functions, and services to address the complete end user experience.  This will again require you to look beyond your own start-up company’s capabilities to address these needs.  So when you are considering bringing your start-up company’s technology product or service offering to market, consider the end user experience and expectations. To do so, will allow you to look beyond your own core competencies and address the broader needs of the market.

Looking beyond your start-up company’s core competencies is a key to being successful in the market.  All companies, large and start-up alike need to do this to ultimately define their product offering. This often requires start-up companies to realize that they do not have a complete product offering and need to work with one or more strategic partners to define their final product offering.  In addition, taking into consideration the end user’s experience and their expectations are required to bring a successful product to market.  So, as an entrepreneur, remember, it often takes many more capabilities, features, functions, and services, than your start-up company’s core competency offers to provide a “complete” product offering to the market. So when you look to define your product offering take this into consideration as it will ultimately your start-up company with more long term success in the market.

December 14, 2009 Posted by | venture finance, Venture Funding | , , | Leave a comment