19 Mar 2008
0 CommentsThe “New Playbook for Venture 2.0: How to get from $0 to exit with less capital”
Yesterday, long time friend and business colleague Grover P. Righter who is General Manager Americas for Silicon Valley-based iMobileInternet, was the Keynote speaker at the Mars Experience Tech 2008 Conference. That conference was clearly a highlight of the year and was brilliantly executed by MaRS guru Peter Evans.
And, Grover’s keynote address, entitled “New Playbook for Venture 2.0: How to get from $0 to exit with less capital” easily stole the show. I’m keenly encouraging wider understanding of this topic, as it is central to our core “hands on” investment strategy at Verdexus. In a very detailed methodology, that I’ll dub the Grover Playbook, Grover Righter clearly has best captured the essence of the new world of building more capital efficient knowledge-based businesses.
I’m hoping Grover will provide a more detailed briefing on this methodology in a future instalment, meanwhile I’ll highlight a few key points:
- with the advent of open source, virtualization, outsourcing, social networks and new web/mobile models into the enterprise, building a web or wireless business from scratch to exit (“new home”) for about $2 million (rather than the more traditional $20 to $50 million for an enterprise software company), translates into 10 times improvement in capital requirements and efficiency.
- while undoubtedly attractive, this world isn’t easy to navigate. Requiring an incredibly detailed and disciplined approach, I would suggest this Playbook might demand 10 times the strategic and executional skills from the (extended) management team compared to the more traditional technology company build-out.
- perhaps the great unspoken implication of Grover’s talk was what it means to typical venture investors who have primarily focused on the provision of capital versus the operational and executional aspects.
- in fact, Grover’s model is really a way to optimize that notorious gap from Angel/Friends and Family to Series “A” by leveraging advisors and capital in creative ways,
- a truly synthesized approach, aimed primarily at the CEO (and senior management team), Grover’s Playbook covers all aspects of the business, including composite business models (“Revenue 2.0”) , overall financial models (the “Well Formed Company”), new cash model (the “CEO’s Mistress”), virtualizing nearly everything (including management), the limitations of traditional market research, decoding value (users vs. who pays the bills), go Beta early, etc.
- From the Q&A and later discussions, it was clear to me that the serial entrepreneurs and experienced executives in the audience immediately “got it”, but
- my suspicion is, the prominence of a very activist virtual management (advisors and mentors who are exhorted to be a constant thorn in the side of management), may challenge the natural tendencies of many founders (did I say “founderitis”?)
All the above was provided backed up by a financial model, that needs to be customized by each CEO.
Stay tuned to hear more about the Grover Playbook for Venture 2.x.
22 Mar 2008
0 CommentsRUN THE DREAM: Social Entrepreneurism Par Excellence
On Thursday, I attended the pre-launch party for what is an exciting new social enterprise. The guest of honour, Jonathan Howard, a 24 year old (and, I am proud to say, my nephew), is embarking on an extraordinary quest. On Tuesday, 25 March he will, in his RunTheDream charity fundraiser, do what most of us wouldn’t ever even consider attempting – to run across Canada, a distance of over 9 000 km from St. John’s to Victoria.
Why has Jonathan undertaken this amazing, and many of us would say impossible, run? Well, besides proving to himself that he can, Jonathan who is already an accomplished athlete and marathon runner, has had this personal goal since his university days. And, even more importantly, he hopes to raise significant funds for Autism Society of Canada, a rapidly emerging cause, yet one that still lags some of the bigger charities in its awareness and fundraising. In addition to a significant fundraising objective, a CSF for Jonathan’s will be to significantly increase awareness of the Autism Spectrum Disorders across Canada.
How can you help Jonathan raise his (minimum) goal of $2.5 million? The website at http://www.runthedream.ca will be launched on Tuesday March 25th, and in addition to regularly updated progress reports, online donations can be made on this site, or printable forms for mailing purposes are also provided. Alternatively, any Canadians can email from their online banking portal to “mydonation@runthedream.ca”. Please give generously, however you choose to donate.
One of my personal favourite quotes to characterize the exceptional nature of entrepreneurism is:
This surely applies to Jonathan’s demonstrated passion to embark on a task that 99.999% of us would view as impossible. And, part of achieving the impossible is the creation of a great “social enterprise” in RunTheDream, having startup metrics like:
So, by these measures, this a not “your father’s” approach to charity or nonprofit and, I remain excited how the passionate entrepreneurism of remarkable individuals like Jonathan Howard, continue to transform our society in very positive ways. We all wish Jonathan good luck in embarking on his trans-Canada odyssey.