As a VC investing in technology-related companies, be they atoms or bits, the depth and breadth of the innovation is critical. This is a rather obvious. So how do I define innovation? Innovation = invention + commercialization. If it isn’t viable in the market, if it doesn’t even reach enough of the market to know, it’s a lovely, but it’s an invention, not an innovation – and most of us VCs like the latter more.
Take a look at most pitches and usually more slides are on the technology and functionality than sales and marketing. Take a look at most ‘use of funds’ and most of the money goes to product development, with not that much towards sales and marketing. Granted, in the early stages there is a lot of discovery to be done on sales and marketing. That’s ok. We’d like to know the business’ thoughts on how it is going to find out what it doesn’t know. Everyone in the room knows there are a ton of unknowns. It’s ok not to know but a plan for finding out is critical. VCs know there are risks, and we want to know how the business will discover, mitigate and provide contingencies for those risks.
Now maybe I’m a bit unusual in what I’d like to see and hear from entrepreneurs coming to our firm for funding, and I probably am. Coming from Bell Labs, I have a passion for technology…but I also know first hand that if you don’t market and sell your ‘stuff’, it’s doesn’t really matter. The Lean Startup Movement has helped some in terms of getting feedback for the product or service but it’s not a panacea for identifying markets, marketing and sales.
Even when the markets and plans for attracting those markets are identified and great, effective messages are developed, the gulf between how the startup wants to sell and how customers want to buy can be huge. Unless you have the next iPhone and can dictate the rules of the market, changing customer buying behavior is not easy and is critical. Startups need to test and find the balance between how their targeted customers want to buy and an effective and efficient way to sell.
So, after 10 years of being a VC, and loving the opportunity to help companies grow, my advice is don’t neglect marketing and sales. It’s not as ‘sexy’ or as fun perhaps as working on the product or service. It’s usually less tangible, more open to wide interpretation…but it’s critical. You can have the greatest product or service in the world, but if no one knows or cares, then why should I?
image credit: sierraclub.com
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Deb, founder of Mills-Scofield LLC, is an innovator, entrepreneur and non-traditional strategist with 20 years experience in industries ranging from the Internet to Manufacturing with multinationals to start ups. She is also a partner at Glengary LLC, a Venture Capital Firm.