Featurists, Futurists, Flakes & Freaks - How To Be An IT/Digital Startup Winner

Malcolmevans
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The Cultureship Practice
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- Searching for substance within IT and Digital propositions
By Chris Airey & Malcolm Evans

    Malcolm:

We’re doing a lot around the online services sector, IT and Digital at the moment. We are working with a group of exceptional and emergent businesses, each of which combines deep but practical disruption, inherent technical excellence and crystal clear customer value-add.

But the non-starters also continue to tumble out in droves from non-enterprise centres and from the phoenix mentoring programmes . There are the featurists (no product, just a bit of flash); futurists (“the market will move this way in 2017”); flakes (serial non-entrepreneurs); freaks (“We’re from Widnes: with the right investment today we can change the way Californians live tomorrow”).

Almost daily you hear the term “investment ready” and rarely do you get to learn what it means. Or the debate gets corralled into theories such as Lean Startup and Minimum Viable Product, which are fundamentally valid but frequently hijacked by rhetoric merchants who parrot the words but who are clueless around the implementation and the implications.

As business builders, through the application of hard cash and even harder experience, we are presented with IT and digital propositions almost daily. Believe me, we so much want you to succeed. There are VCs out there – and state-backed enterprise funders – who sometimes seem to take a perverse pleasure in saying no.

We always appreciate when we are in a room listening to hopes and plans that there is lifeblood flowing in there; people are bearing their souls and making themselves vulnerable.

But there are always hard questions to be asked, in the mind if not always out loud. Below follow the kind of thought processes that really go on during the assessment of online services or new IT/Digital in the mind of someone who knows what he is looking at.

Chris Airey is an exceptional presence within IT and Digital in the NW. He has built major systems from the ground up and is always an early adopter of nimble new additions. He has worked with private equity acquiring companies. He is endlessly generous of his time in engagement with startups who will listen and, as a big company CIO, is also used to sitting very much across the table from the never-ending parade of vendors who wish him to take their offerings.

Following are his thought and assessment processes. Think how you would fare presenting your own cherished IT/Digital proposition, either in a quest for investment, or as a would-be vendor:

    Chris:

So, you are sitting there, opposite me, with all your bright ideas leaking in every direction. You are the messiah of your niche.

On the other hand, I know the opportunity cost per minute of me listening to you, and yet again wish that précis was a prevalent skill.

What am I interested in when you articulate your story?:

a) Is there a real level of emotional attachment, ambition or passion for your thing? I don’t mean inane shrill patter – but if you don’t value it, then why would I? Sometimes I may be happy you don’t and thus take from you the fool.

b) If there is more than one of you, then do you have a pre-nuptial? If not then I will look for the common ground and the divisive issues before mentally applying a risk factor; since you have not been an adult and agreed how your relationship will work, then I will assume you are commercially unsound in every other aspect. If you are on your own then the odds would say you will fail, but I might see someone worth helping.

c) Articulate your thing in terms of technology and business capabilities: often there is a pivot opportunity on capabilities or assets that you will not see, as you are inside-out, rather than outside-in. At worst, if you understand how your thing can be broken-down, it has the chance of being re-assembled to adjust to the market.

d) What are your go-to-market and product roadmaps? I will look for how many bets you have in each race and how much re-use of effort there is. There is a balance you should understand between being a one-trick-pony and being spread too thinly.

e) I will think myself into the roles of others; can you tell WIIFM across these:

1. Finance – shareholder, lender, introducer

2. Client Board – role by role

3. Acquiring (Exit) Board – role by role

4. The types of person(s) who would get utility from your thing?

f) Is it clear what I am buying: IPR, experience, a tool, a solution? Can I buy bits? Do I have options, or are you IBM’s new Universal Business Adapter?

g) What help are you getting? Is any of it from anyone who has got things done? Have others left you carrying all the load and risk, or can you get others to do things for you?

h) Have you taken money before. It is not just the ROI that is of interest but your wisdom in avoiding being a zombie for some agency or other.

I) Do you understand who you are a threat to? I hope so, otherwise you will never succeed, or know who to sell around.

j) Vitally, can I see how would you make the Eugene H. Krabs in me happy?

In the final analysis it’s about value. In the analysis immediately before that it is about knowledge – how much do you already have and how much do you go down in my estimation in proportion to the amount I have to tease or wring out of you?

- Malcolm Evans is one of the UK's leading business funding specialists.

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