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Startups in WI Need the 3 C’s: Customers, Connections & Capital

As startups, you need assistance with everything.  However, there are the 3 C’s which are the most critical and encompass many areas of support that you will need.

Customers Are King

The traditional sense of this phrase is that if we treat our customers as kings or queens, then they will be loyal, long-term supportive customers – the goal of every business.  However for startups, the customer or even ONE customer can make the difference in your business succeeding or failing.  We must have product validation – will someone buy our product, do they perceive value, what is that value?  All of these questions need to be answered and proven in the market place to move your business to the next stage.    Startups do this through product trials, feedback, testing, changing the product, more testing, more feedback –it’s a continuous cycle and we need supportive, interested customers to work with us through this and to then buy our products – the ultimate validation.  In the end, the customer receives a great product that will help their business and the startup has validated their product in the marketplace.

Connections – It’s Who You Know

This saying could not be more true in the startup world.

  • You need connections to Capital.  You need your Capital Connections to be connected to other Capital.
  • You need connections to Customers, who will then be a reference and provide you with connections and references to other customers.
  • You need connections to Partners that may help distribute your product.
  • You need connections to advisors, board members, business development contacts, services companies (legal, accounting, audit, patent, HR, etc).  To find and verify all these services is a daunting task for a startup.  Having trusted connections that can filter and refer the right connections is invaluable.
  • You need connections to build your C-Suite.  At every stage your management team will be evaluated.  It’s not likely your college roommates will be the right c-level management team for you.  You want the right experience in the right positions that enable you to build the business and bring credibility to your venture.  You will need to find these people through many different connections and again, you want to evaluate your c-suite based on their connections and ability to help the business.

Even if you have been in your industry for many years, you will not have a network that includes all these connections.  Build out your network in every conversation.  Ask for connections to customers, capital, advisors or other contacts that will be beneficial to your business.  Evaluate your investors, advisors and board members in part with their level of connections that they can bring to the business.  You can send a lot of emails and make a lot of calls which will not open a door, but a warm referral from a trusted connection will general open the door every time.

Capital – The Need is Constant

Even before you start your company, you require capital.  Once you start down the investment road, the need for fund raising will be constant.  Of course this ebbs and flows with customers and revenue.  However, at each stage you will have to evaluate organic growth vs raising capital.  It is a constant process, you will do this every day.  In WI, there are many supportive Angel groups and more popping up all the time.  Unfortunately, we only have four VC’s in Wisconsin.  In 2013, there were only 26 deals for a total of $67M in investment.  This pales in comparison to national numbers.

It makes it difficult for our WI companies to compete when there is insufficient capital available in the state.  This requires our companies to seek capital outside the state which is costly and the effort is hampered by the lack of connections within our current ecosystem.  Our established companies can help tremendously in this area.  We have companies such as American Family and MG&E who are investing back in to our WI companies.  A strategic investment by an established company is tremendous validation for a startup company and provides needed capital to continue to develop the product set.  An established company then has access to this technology to create strategic advantage.  It’s a win-win if we can create more strategic investment within the state.


Why a Wisconsin Partnership Pledge?

In the Governor’s Roundtable on Entrepreneurship, Governor Walker asked a group of entrepreneurs for things that would help the startup ecosystem.  Of course the most important thing for startup companies is customers.  Customers validate your product, generate revenue and give you critical feedback as you are growing your business.  I proposed that we foster this connection of startups and established companies.

I had also just learned that a competitor from CA was being used at a large HC organization here in Madison.  I thought – why didn’t we know they needed a solution like that?  Why didn’t they know SOLOMO was here and could provide this solution?   In Wisconsin, there is no established way to foster the connection and provide visibility between established companies and early stage companies.   Thus, we need a more predictable way to connect these companies and potentially R&D tax credits or other incentives for established companies to participate in a meaningful way.

There are clearly different levels of support that early stage companies require as outlined the pledge (link), including Mentorship, Customers, Solving Real-World Challenges, and Investment.   Participating in the Pledge will raise our startups visibility and connect them more directly with established companies that have a specific interest in their industry or technology.

There are also many benefits to established businesses, including access to new technology to differentiate you in the marketplace.  It’s hard to keep your current systems running and find time to investigate new technology.  Our startups can do that work for you and you can provide feedback, do customer trials and implement the technologies that are of benefit to your organization.

In the future, we’d like to lobby for tax credits or other benefits for our established companies in order to help incent you to participate at higher levels.  Sponsorship will help with these activities.

Sign up to take the Pledge – what can you do?

The Effect of Social, Local, Mobile and Personal Technologies on Your Business Strategy

Cloud enables Mobility. Mobility enables Social, Local and Personal technology solutions in ways we have only begun to imagine. So…what does this mean to your business strategy? If we haven’t begun to imagine the possibilities, how can we construct a business strategy that takes advantage of these capabilities? More importantly how do we make sure that our business remains viable and relevant ahead of our competitors or even more likely ahead of start-ups with new business models and greenfield technology solutions who are unencumbered with legacy systems and processes?

Every day, I brainstorm with customers on leveraging cloud and mobility in their business. When we can reach a customer or consumer at any time on their mobile device, we can fundamentally change the business. After a recent customer session where we identified new business models for monetization of their customer base, outlined simple mobile solutions for creating amazing efficiencies in their business and realized new ways to connect their customer base and partners, my customer sat back and said “This changes everything.”, and even more interesting “That was so much FUN!”.

But, he could not have done it alone, nor at the beginning of the session were these opportunities even a possibility in his mind. These technologies will open up doors that were not possible before. You can monetize your intellectual property in new ways, you can create new advertising models and revenue streams, you can crowd-source your products and/or solutions, and the list goes on and on. However, in order to do this you have to have a fundamental understanding of what is possible and you have to think in new ways now that you can directly connect to your stakeholders anytime, anywhere.

So, given that most of us do not have this kind of knowledge, and yet we are responsible for our organizations business strategy and setting this critical strategic direction….what do we do?

• Get educated. Many business leaders I work with do not yet have a smartphone and are reticent to “learn new things”. Mobility (and cloud) are inevitable. In the next 12-18 months there will be more mobile devices than laptops/desktops. Get educated on these market trends and what they will mean to your business.

• Collaborate. The most compelling discussions have representatives from all generations and stakeholder roles from inside and outside the organization. The Gen Y bring amazing insight to the table on their expectations from brands, their usage of technology, and more importantly creative and innovative new ways to leverage these technologies in business. Enlist all generations in the conversation on the art of what is possible.

• Avoid the way we have always done it. In many discussions with businesses, they wish to adapt these technologies, yet they wish to do it “the way we have always done it”. This is the time to relook at business processes, leverage legacy systems in new ways, provide real-time information and connect with your consumers in real-time. Simply taking your legacy system and trying to put a mobile skin on top of it, won’t maximize your benefits. I liken this to when we moved mainframe green-screen applications to client-server and many organizations simply rewrote the same application in the new GUI. Don’t make this mistake with mobile.

Strategic opportunities are always hard to spot and execute. With cloud, mobile, social, local and personal technology trends, they become even more difficult. It’s coming and it can fundamentally enhance and/or change your business. So get educated, bring in the experts — the digital natives that are growing up with these technologies are setting the expectations for user experience. Get ready to change and update your business in amazing new ways that leverages direct-connection with your customers (all of them), real-time interaction and response, personal experiences, and targeted local business models.

As they say….if we don’t do it, someone else will. It’s time to think outside the box….or inside the box…this one…mobile.