The “New Playbook for Venture 2.0: How to get from $0 to exit with less capital”

Grover Righter
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.