VALIDATION OF YOUR IDEA/PRODUCT IS THE BEST FEELING FOR AN EARLY-STAGE ENTREPRENEUR... A NECESSARY EXERCISE TOO
This past week the GoingOn team met with a venture capitalist who the majority of us believe is the most knowledgeable and active in the Web 2.0/Open Media space. During the initial half hour, he really didn't give any indication of his thinking on our company and just listened to our presentation and asked a few questions. Soon after the first half hour, he began the discussion about how he was amazed that other established companies weren't doing what we set out to do. As the meeting went on, he provided some great insights on our pricing strategy and how to position ourselves in the market. He proved himself to be damn smart and confirmed he was an investor that we wanted.
More importantly the meeting was great for all of us because he provided validation of our vision and product. Over months of testing, pitching, reading, writing, and thinking about your startup and product, it's easy to become enamored with everything related to your efforts. As an entrepreneur, you sometimes have to wonder if you're just breathing in your own exhaust... drinking too much of your own kool-aid.
So the feeling when an experienced executive within your target industry, thought leader, successful venture capitalist, or a brilliant and respected person become interested or excited in your startup it's a great feeling. It's another bread crumb in the path towards success. This experience is especially rewarding if you're seeking seed funding.
During my first startup, ViewPlus, we found out that our idea and product was not an easy sell. First, our investors had to be knowledgeable or at least understand the cost of instructure of cable systems. Second, since it was a video-on-demand system, they had to understand the existing pay-per-view services and probably some of the issues with video distribution. We tried to simplify the problem we wanted to solve and clearly explain our kickass solution, but it was never an easy pitch.
When we met people that got what we wanted to build, it was exciting. "Got" I define as not just lip service, but actually understanding our vision and the ability to provide sound feedback and insight.
Back in 1999, when we were hungry entrepreneurs, Jimmy, Peter, and I got excited over every baby step we made. Back then Garage.com use to be a match-making service between entrepreneurs and investors before the recent shift to an early-stage fund. ViewPlus was accepted into Garage.com's "Heaven" which supposedly less than 2% of companies that applied were accepted. Once in "Heaven" their select investors would be able to search through this priority listing of startups. We were psyched.
I also remember how psyched we were when we finally met a cable TV executive that liked our idea. But for every interested investor, potential advisor, or strategic partner, there were many more naysayers and people who didn't get it. Obviously, if all you get are naysayers then you should rethink your product/service idea or overall business model. Anyway, I found out that it was important to listen carefully to the naysayers too unless they were complete asses. There could have been important ideas or feedback which we would incorporate into our product or business plan. I found that it was difficult to pitch an idea that was completely new and untested, but I loved my time and experience with ViewPlus.
HeyAnita Korea was different experience. It was a technology and concept that we didn't create. We provided the introduction to Softbank's founder, Masayoshi Son, as just a personal favor, and then some of HeyAnita's founders pitched us to help them set up operations in Asia starting with South Korea.
This experience was different not only because it wasn't our own, but because it was a "wow" technology that wasn't really trying to solve a problem but to make life easier... accessing information by voice through the phone. The demo was cool and gathered interest from most people, but the question was would they really use it?
Here it was easy to breathe our own exhaust. A cool technology with what we thought was a great business model we developed for the Korea market, but we had an uphill battle to convince the wireless carriers and telcos in Korea to integrate our services. The coolness factor of the technology clouded the real validation we needed to hear in terms of how we could build a lasting business out of it. How would people respond to this new technology and how much education would be needed? Was this a completely new behavior pattern we were forcing on people or was it a natural extension of their current phone behavior? So on and so on...
Even though ownership might have been an issue along with the coolness cloud that covered our eyes, we probably didn't seek out to challenge ourselves enough and our business model. Maybe we accepted lip service as validation of our efforts.
We struggled for the first year to find the right business model and target market, but by the second year HeyAnita Korea got its head out of the clouds and listened to the footsteps of the market.
Now for GoingOn Networks, I believe I learned from my past experiences, so hopefully I can effectively apply them as we build a business from our vision.
[tags: entrepreneur, entrepreneurship, entrepreneurism, startup, VC, technology, business, blogging]