Just stumbled onto Peter Rip’s blog EarlyStageVC. While some of my best friends are VCs, I’m not and so I can’t say how representative his blog is of the general VC mindset. But I can say he is a great student of innovation.
VC’s have a unique perspective on the innovation process–they are by necessity both intimately involved in new ventures (betting $Millions will do that) and objectively distanced from them (to be able to pull the plug, if need be).
What this provides, in Peter’s case, is a great perspective on the innovation process that generalizes well beyond software and the Silicon Valley. And is refreshingly devoid of the traditional bus-book approaches to managing innovation.
In one telling post, How to double your valuation, he talks about what it takes to create value in a new venture:
So how do you double your valuation? Pick one application; serve one type of customer and be in that business. Show how you can conquer a specific set of competitors by virtue of the technology, but don’t be in the technology business. If you can persuade your investors that the first beachhead is attainable and interesting, you will get credit for subsequent applications and the big, horizontal play. Tell a story that shows you understand who your customer is, how to get to them, and why they will buy or use your product/service. Show how powerful the technology and team are, but stay on message about the focus. Let us imagine the Future.
- Don’t enable – solve
- Don’t provide context – provide conclusions
- Don’t ask customers to build – ask them to use
Technology is raw material. Create finished goods.
All ventures–from Si Valley startups to internal projects, should be managed to create and demonstrate concrete value quickly while still promising a broader platform for future and dramatic revenue growth. Is your company managing the development of new ventures in this way?