Startups are an amazing process. It all starts with an idea or “what if” scenario: a blank whiteboard and an empty room, a discussion of like minds. Specifications are written. Code is prototyped. Boom!
I have been on all four sides of the startup equation: creating/founding, VC technical due diligence, acquiring at software corporations, and being acquired by software corporations. What does it take to create a chance at a successful Startup? I like to call it the Three T’s: Talent, Technology and Timing. I believe this is what creates the 1% of startups – the successful entities. The Big Idea of your NewCo coalesces the three T’s together. So lets break down the Three T’s:
One common thread that I see is The Team, The Crew, The Clan. The Team is core to any of the startup functions. Take a well-seasoned and technically strong team that can execute on a code base in a very efficient manner and all of a sudden a grade B idea turns into a grade A idea. I do not care if you are making pencils. If you have a great team, it will make the pencils into pens! I wrote in a previous post concerning the talents of people who exist in the world of technology startups. Most are multi-faceted over-achievers. Let us look at a very basic core description of some of the attributes I look for in a member of a technical team:
Must have the ability to:
- Translate business requirements into system design and implementation.
- Breadth of knowledge in several areas and stretch beyond current models.
- Understand a variety of constantly evolving business requirements, tools and platforms. (I am willing to bet that idea or business model will change)
- Speed and Agility. Can you work intelligently with speed? You will be prototyping systems that have never built before with little or no technical documentation/requirements
- Keep Theoretical Rhetoric at the door. It is good over a beer not somewhere that equates to running production code.
- Do It All constantly with little or no assistance or answers.
Oh, did I mention constant ridicule from people that say The Big Idea is not possible or they already thought about it? Most companies like Google, Microsoft, Apple, Oracle, Yahoo! or IBM (the folks inside the firewall) acquire companies for two basic reasons: 1) talent or 2) technology. Ok, pretty obvious yet what is the underlying motivation? The talent play is human resource recruiting on steroids. I was talking to an executive at a software corporation somewhere in The Wild West and they said they really do not like acquisitions but look at it like they get an in place department ready to kick start onto something else. Wait what happened to your lovely Big Idea? That is modus operandi and “T” number two.
In many cases the technology is acquired for defensive reasons. Why you ask? The good folks inside the firewall usually do not want the other folks inside the firewall to have the latest and greatest creations. Is it really all that important to them? Not really. It is adjunct to the core businesses of the companies inside the firewall. Be careful here – do not fall in love with the technology you are creating. It is very easy to do so. The technology is just a means to an end that enables the idea. That said, sometimes new technologies are created to create the idea. Reduction into practice is what it is all about. I cannot tell you how many times I have heard, “Well we have THOUGHT about that technology.” Ok well glad you have thought about it, thanks we are going to go off and build something to drive a business model to fruition. Given a great team that can execute a clean concise code base (complete with specifications and provisional patents) makes a very attractive package for said corporations to pick up. They get more minds on the keyboards. Possibly your ever changing Big Idea will be used on the corporation. I must say making money off some code you wrote via an acquisition that is deployed via one of the folks inside the firewall is cool. In fact so cool it feels criminal. Especially when it is at the right TIME.
This is a tricky one. A very smart professor once told me, “Timing is Everything.” The tech world operates, as do most things in life, within the vicissitudes of cyclicality. What comes around goes around. It just looks and smells slightly different. In the startup world if you think it; it may have already been accomplished and the terminology quick follower may not be quick enough. In most cases they who ship first usually win although a good Rolodex™ of contacts help as well. Knowing when to launch or deploy or even start the Big Idea is everything. Given a great team and some good technology when do you pull the trigger to deploy the Big Idea? Recently, there has been much discussion of semantic intelligence and predictive analytics. Information Retrieval and Knowledge Discovery were extremely hot 1998 to 2001. Many of the same tools and methods for performing natural language processing, machine learning, data mining and a host of other adaptive methods were alive and well yet much of the infrastructure was not in place. Today we have infrastructure technologies with REST, Hadoop, EC2 and the like and it makes getting down to business of creating Societal Mathematics so much more enjoyable because one does have to worry about the pipes. Also we have so much more data in the areas of digital born goods via the World Wide Wait (ah Web – excuse me). Is it truly different? Not in an academic sense. The timing is important. A great idea or a great team to far ahead or far behind could spell disaster for a startup. In most cases it is better to be a “front-runner” than a “quick follower”. In a startup hours are days and days are months. So it is very important to get out of the gates quickly. Analysis to paralysis can be a death knell. A grade B idea timed correctly with great execution will magically turn into a grade A exit.
Is this a concise cookbook? No. Yet I hope you found it helpful and thought provoking. There are no panaceas for idea2bank monetization but that doesn’t stop me from trying to find one!
Remember: your ideas are your own until you tell someone.