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Posts Tagged ‘Brad Feld’

Sometimes, mother-in-laws top hard statistics

(Editor’s note: Jeff Bussgang is a General Partner at Flybridge Capital Partners. This column originally appeared on his blog Seeing Both Sides.)

I’ll never forget my first marketing class at business school.  Our professor peered at us with an intense glare as he pushed back on our standard, “chip shot” comments.  At one point in the class he asked the guy next to me to opine on the case we were discussing, which involved launching a new consumer product.

“Well,” my neighbor answered confidently, “I think it will be a hit because I can see my mother-in-law buying it.”

“I see,” replied my professor dryly and then turned to the class with a withering look on his face, “Steve appears to have fallen into that fatal trap of ‘Mother In Law Market Research’ – believing this new product will be a hit just because his mother-in-law likes it.  Instead, let’s look at the data, shall we?”

This put-down to allowing personal experience influence your assessment of new products and services came back to me this week while at my board meeting for our mobile video portfolio company, Transpera. As we discussed poor video delivery quality and AT&T’s clogged network, everyone started devolving into their own anecdote of “what happened when I tried to watch a recent video on my iPhone”.

Yet, although I know it frustrates entrepreneurs, I confess to being sympathetic to investors who use their own experience as a guide to their investment activities.  Frankly, I think it is a critical part of my job as an investor to try out new products and services and those experiences certainly do inform my investment judgment.

Many VCs I talk to feel the same way. Brad Feld wrote a great article in this month’s Entrepreneur Magazine urging entrepreneurs to let him play with their products rather than present them to him.

Jack Dorsey, the founder of Twitter, recently told me that the reason he chose to work with Fred Wilson, rather than a host of interested Silicon Valley VCs, is that Fred was a Twitter power user from the beginning. When Fred first met the Twitter team, Jack said he was full of new ideas of where to take the product and the power of the model.

The desire to experience new products and services and technologies is why I own a Blackberry, an iPhone, a Kindle, a Sonos, a Roku, and subscribe to a ridiculous number of online services, blogs and feeds.  I also study how my pre-teen and teenage kids interact with games, devices, IM, Gmail, Google Buzz, to get insights into how younger users will experience the emerging connected world.

I even throw things at my wife that are targeted at her demographic to get her outside perspective on them.

I do appreciate that entrepreneurs get frustrated when the VCs extrapolate too much from their personal experience, particularly when they’re not the target market.  I remember pitching Upromise to one well-heeled VC who asked: “Is college really not affordable?”  Um…on planet Earth it isn’t.  I guess if you live in the stratosphere…

Anyway, here’s my simple advice to entrepreneurs:  tell a story.  As John Quincy Adams says in the movie The Amistad:  “Whoever tells the best story wins.” Make it real for the prospective investors.

If they’re not the target market, bring that target market user’s pain and pressing need for your new whiz-bang product or service to life.

And don’t be afraid to ask your mother-in-law for advice.

Image by DCvision2006 via Flickr

Tags: Venture Capital

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EC Roundup: Your legal questions answered –- and more startup therapy

Here’s the latest from VentureBeat’s Entrepreneur Corner:

Ask the attorney: Founder vesting — Attorney Scott Walker kicks off this regular Entrepreneur Corner series, answering the burning legal questions of startup owners. This week: Should you split company stock equally among founding partners? And what sort of vesting options should you enable?

Beware the hockey stick in your budget — Your 2010 budget is probably set, but have you made some critical assumptions of error? Brad Feld, an early stage investor and co-founder of Foundry Group, looks at the four most common types of budget models and the problems with each.

Outsourcing entrepreneurs: How the EU lets startups slip through its fingers — While America is flush with accelerator programs, there’s a paucity of them in Europe. The Difference Engine CEO Jon Bradford argues that this means the best and brightest start-up owners overseas are flocking to the U.S., which could leave the continent in a bind in the years to come.

The startup chronicles: It pays to be bull-headed — Determination can be one of the most important characteristics for entrepreneurs, says author and startup founder Bruce Judson. When people tell you something is impossible, but it’s critical to your company, a little stubbornness is often the only way to succeed.

Startup therapy: More questions to force you to face reality — Angel investor Jason Cohen offers up four more questions to ask yourself in order to figure out what you need to do today to increase your startup’s growth and profits.

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Skip The Hand Shake Now Has A Wristband

No Righteous Cause is complete without a colored wristband. That’s why I’m so excited that the no-hand shake movement (yes, movement) now has an official blue wristband for people who want to show that they support the effort. Get a ten pack of them here for $20.

Here’s who has (sort of, not really) pledged their support for the No Handshake cause to date:

• OpenCandy, Bessemer Venture Partners
• Some German city
  
• CNN, Dalai Lama And The Obamas
• One in three Canadians
• Brad Feld and Boston Globe
• NEW – The New Yorker, via this cartoon

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

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Entrepreneur Corner Roundup: More ways to ensure angel investor rejection and lessons from the high court

Here’s the latest from VentureBeat’s Entrepreneur Corner.

Excel where your competitors suck – The most minute annoyance can drive a customer into the arms of a competitor. Serial entrepreneur Scott Olson discusses how to turn this to your advantage – and how to make sure you don’t unintentionally drive your own customers away.

Running a start-up outside of the Valley – With the focus of the media (and VCs) on Silicon Valley as the home for start-ups, particularly in the tech field, it’s easy for entrepreneurs in other places to feel left out. Ali Davar, CEO of Vancouver start-up Worio, runs down the advantages of being located elsewhere – and ways to stay connected.

4 MORE ways to get automatically rejected by an angel investor – Jason Cohen, an angel investor himself, offers up four more surefire ways start-ups screw up their chances of ever getting money for investors.

What boards of directors can learn from the Supreme Court – While the topics are vastly different, board meetings could be vastly more productive if they follow the lead of the nation’s top court, says early stage investor Brad Feld. A little preparation and doing away with everyday distractions can go a long way.

Start-ups have no room for VPs – Too many start-ups segregate themselves and try to mirror their business model on the IBMs and Googles of the world, says serial entrepreneur Steve Blank in this lecture at Stanford University.

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