Growth Times

I will soon have another opportunity to test my beta talk on the Divide between Technologists and Business folks, and why that is the number one root cause of tech venture failures (see my slides – torn apart by Slideshare, here!). Communitech has kindly invited me again to speak, this time at their entrepreneur group in Guelph, where I currently reside. It will take place from 6-8pm at SYNNEX Canada Ltd, 107 Woodlawn Rd W.

As a preamble to this talk, I just came across a very interesting blog post, recommended by Guelph’s very own Brydon of start-up Brainpark, arguing for the need to shift from a product development mindset to a customer development approach. I added some comments there too.

I look forward to seeing many Guelphites and having a good chat about this topic. Bring your war stories!

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I have just added a reading list on Growthroute’s website, to help clients, prospects and would-be entrepreneurs quickly identify some key reference frameworks that drive our actions. If you exclude the all-time classic of Peter Drucker, Innovation and Entrepreneurship, which deserves its own section, this list is divided in 6 parts, inspired by the Develop/Market/Fund/Scale framework Growthroute uses to classify the type of actions and projects we work on with entrepreneurs:

• Broad guides on entrepreneurship: those books attempt to cover the whole entrepreneurial process, from generating ideas to building them to marketing them and financing them. Some of those books, such as Richard C. Dorf’s Technology Ventures: From Idea to Enterprise, are used at MBA and commerce programs, while others are established general references.
• Develop: books in this category primarily help readers figure out where to start, what market to target, what product to launch, and what go-to-market to pursue. This category includes thesis books such as Crossing the Chasm (my personal favorite), Blue Ocean Strategy, or the Innovator’s Solution, and other strategy pamphlets.
• Fund: this contains guides to raising money from VCs and Angels. There are generally less references in this category, I think primarily due to the more limited consumer appeal of the topic, and the general focus on learning by doing rather than by reading in that field. This said, I think the books listed here are excellent introductions to the topic.
• Market: it’s one thing to build a great product and another to get it spoken about. Or is it? In my opinion, an integrated promotional strategy using the product at its very engine and a select channel mix works best. Those books focus on that, i.e. making your product as “word-of-mouthable” as possible and effectively leveraging the right delivery mechanisms to amplify the buzz. If you read only one, then I recommend Chip Heath’s Made to Stick: Why Some Ideas Survive and Others Die. By all criteria, this is the bible of buzz.
• Scale: so you have a great product and some market traction? What next? These books help you structure the organization for exponential growth, keep the momentum going and reap the dividends. Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth, by David G. Thomson, is probably the most straightforward and useful reference on this topic.
• Lead: this really is a sub-chapter of the “scaling” section, but the importance of good leadership cannot be underestimated once your organization starts to grow and founders have to rely on others to get stuff done. Those books make excellent points on management practices and are designed to make you think about your own approach and style. Chris Bradford was my professor at Stanford and his book Power Up: Transforming Organizations Through Shared Leadership, is the one that made me the most about leadership styles.

Lastly, I also listed a must-read for anyone planning to rely on business book theories to drive their companies: the Halo Effect, which argues that business book authors often confuse the causes and consequences of the business “best practices” they advocate. In our reading list, I have tried to avoid authors who do that, although even some of the books I listed fall for the halo effect at times. But one thing is certain, you won’t find Good to Great here!

Let us know what you think of those books and please do ping me if you feel like I missed any that should figure here.

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It’s official, the Ontario’s Emerging Technologies Fund (ETF)  is now open for business. This $250-million fund will co-invest into companies in high-growth sectors such as clean technology, life sciences and advanced health technology and digital media and information and communications technology. Co-investments are made along with qualified venture capital funds and other private investors. For more information see http://www.ocgc.gov.on.ca/

I am generally not a fan of public sector intervention in the private sector, but this comes as a positive move in contrast, since the government has wisely decided to let VCs and angels screen investments for the fund money instead of trying to do it itself. And frankly, after distorting the economy through massive subsidies to under-performing foreign car manufacturers, any public money directed towards innovative ventures is welcome. It also comes as somewhat of a relief to the Venture Capital industry in Canada, which is doing much worse than in the U.S. (yes that’s possible, apparently!), and is down to almost nothing according to this report by their association. Not that there was much in the first place!

The main question is whether there will be dollars to match. In other words, this program unlike, say, SR&ED, doesn’t make investments more attractive. It just makes it possible to invest in more companies. Since the VC model is under attack for its supposedly poor returns (with arguments I am still quite skeptical about, but that’s another story), all eyes are turned towards them to see whether they make use of that fund, or it goes primarily to Angel investments. After all, as the book Fool’s Gold asserts (thanks to the National Angel Capital Organization for the link), Angels Finance 27 Times More Start-ups Than VCs, at least in the US.

To ventures who wish to apply for a slice of this pie, my recommendation is to work both on your frontend, i.e. ultra-targeted pitches, b-plans, networking with VCs and Angels, influential advisory board, and your backend: management team, sales process, go-to-market and scaling strategy, monetization, exit. Those are both sides of the same coin, and unfortunately one of them often get neglected. Needless to say, we can help.

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