Recently, I was attending a session at UC Berkeley’s Haas School of Business, where I am a class mentor, and we were talking about new venture opportunities. Specially, after you have gone through the screening process of identifying your next venture, you have to identify your sustainable competitive advantage and how that will map to your grand strategy.
Unfortunately, what I find is that many (inexperienced) entrepreneurs’ don’t place enough emphasis on this – partially because they believe, given what they are doing, it may not be that important and, in many cases, don’t really comprehend what a competitive advantage really is and what it can do for a company.
Continue reading “Sustainable Competitive Advantange”
I came across a great article today via HBR about the vendor-customer dynamic and how, unfortunately, vendors take an unnecessary beating from their customers in the name of “good business”. All to often, I think people tend to forget that business is done between people – not machines, not companies… but PEOPLE! Therefore, if you want to get the best out of people, you need to start by putting the best into people – and you do that by exercising the Golden Rule (treat others as you would like to be treated).
Remember, in today’s globally competitive business environment, having strong ties to your vendors can yield tremendous insight, which could allow you to make better decisions. Your vendors have relationships with your competitors and have powerful insights on how the market is moving along. In addition, vendors can provide you with financing (e.g. net terms) that allow you to manage your cash flow more effectively. So, why would you want to treat someone who can help you, badly?
Continue reading “Love thy Vendor!”
I came across a great article by Richard Rumelt, Professor of Business and Society at the UCLA Anderson School of Management titled: “The Perils of Bad Strategy”. It’s a great read that discusses the impact of bad strategy and how, unfortunately, many organizations (and their leaders) believe that they have a strategy when they really don’t.
Continue reading “The Art (behind) Strategy…”
For starters, it’s good to be back on the blogging scene. I spent most of May traveling to Asia (Hong Kong, China, and Bangkok) getting an whirlwind overview on their economies, doing business in these booming markets, and what we can expect over the next few years. Needless to say it was a great education…
Now… back to the topic at hand. To clarify when I say “Blue is the new Black”, I’m not referring to fashion – in fact, I’m the last person that should be writing about that topic! I’m talking about business… in accounting slang, it’s understood that when your business is operating in the “black”, the company is actually operating above the bottom line – in other words, doing well. Conversely, when the company is operating in the “red”, it means the company is on fire and may need to be saved (or shut down – depending on which is more prudent). Continue reading “Blue is the new Black!”
In business, never underestimate the value of true first mover advantage. True first mover advantage reflects not the first actual mover, but the first mover to garner significant market share. In fact, the gains can be tremendous – become recognized as the leader in the space (whereas everyone else becomes the “me too”), get customers (and revenue) before any competitor can arrive on the scene, and reap great profits and possibly gain monopoly-like status. An entrepreneur’s (and the VC who backed the company) dream come true! Continue reading “I was here FIRST!”
If you take but one thing away from these posts, let it be this: venture capital is a tough business to get in, be in and stay in. During 2009, the VC industry continued the downsizing that became very visible in mid-2008. While the global economic issues that surfaced in 2008 (e.g. banking meltdown, subprime market, global economic recession) accelerated the decline and definitely added stresses to the industry, this resizing is a function of the technology bubble bursting several years earlier – also known as the “dot com to dot gone” era. With many firms that raised money during the bubble unable to raise new funds at this time, a further decline in the number of firms is likely. While fund raising and investment entered a new range, IPO activity remained at a mere trickle and the acquisition exit marketplace declined both in quantity and quality. Continue reading “So you want to be a VC, eh? (Part 3)”