This was too entertaining to pass up so I just had to share it with you. Did you ever wonder about all that hype regarding a technology bubble? It seems that companies can create incredibly advanced technology yet, if the market perceives it in any sort of negative way, the product (regardless of how good it is or how many problems it solves) does not stand a chance to succeed. On the other side of the spectrum, you have large multi-national companies that produce less than adequate products (Microsoft Vista is a good example of this) but they manage to push the products into the market and then reap the rewards of success partly due to their talented marketing team’s efforts in self promoting by creating enough buzz to fool the market into believing that the product is a raving success. Amazing, yet scary – all at the same time. If you would like to know more about making your products a raving success, let us know your thoughts.
httpv://www.youtube.com/watch?v=YuAJHaXKgFk
I have been asked many times for a guideline when it comes to evaluating investments that we (or our Clients) make. People ask why we invested in Company X and not in Company Y, Why are we interested in industry A more than industry B etc.
Well, the simple truth is that we invest to win.
We tend to strip out a lot of soft factors and focus on results.
Did management deliver?
Can they do it again?
A lot of investment decision making is based on an understanding of industry trends, a trusted relationship with players that perform consistently above industry average and some form of defensible proprietary technology that is in demand because it solves a specific pain for a given market segment.
If a company has a specific target market segment in their crosshairs, we know that they have done their homework – when management states that they serve all industries, our alarm bells start ringing.
Following is my personal guideline for what really counts when considering investment in a startup or early stage company.
1) Market potential
2) The Team
3) Results
4) USP
Investment Process
Investment Selection
Initial Investment Valuation
Determination of NAV for privately held startup companies
Another year draws to a close and those that are not yet caught up in the turmoil of the subprime mortgage scandal or related corporate governance issues are probably focused on revenues and earnings objectives for the coming quarter. It never ceases to amaze me how many managers plead innocence publicly prior to knowing the facts and especially before claiming ignorance as they beg for forgiveness when the shit hits the fan because a few investors actually bothered to read between the lines as they picked up on sub-par decisions embedded for eternity on the balance sheet that the CEO signed off just weeks earlier. Am I referring to any company in particular? Perhaps… Do I have some sort of conflict with certain management teams that believe that they are above the law. Nay, nay for their day is nigh.
Yes, the shortfall in forecasted ROI has struck me too… How can the large, multi-national organizations that claim to spend so much effort getting things right make such ridiculous miscalculations with our money? We investors need to be vigilant and show our support for those doing the right thing. We investors need to reduce the pompousness at the board level and dig into the virtues of the truly great managers in order to pull out some sanity and coach our teams to do the right thing. Come clean say you?
Do the right thing and you are clean say I.
OK, you got me… perhaps that diatribe was a bit o’er the top but this is my official end of the year cautionary note – you ain’t seen nothing yet folks… the subprime beast shall rear its ugly head in the coming months (errr years) and we will all get a taste of how badly this calamity has affected the companies we invested in when the Q4 numbers are released. I have already looked into the crystal ball my friends… it ain’t pretty.
Anyone care to set up a pool and take bets on which giants of industry will be the next to tumble? How about a bank… If there were a pool, I’d place my money on UBS, Citigroup and Merrill Lynch not necessarily in that order.
There is a lot of discussion these days about what defines a true entrepreneur and whether financial success is a pre-requisite of being an entrepreneur. Well, rather than argue moot points, let’s look at this from a practical, self evaluation perspective and see what is revealed. Below I compare and contrast being a freelancer with being an entrepreneur – I can’t wait to read your comments: