I have a dream...
Monday - January 08, 2007 Filed in: Venture
Capital | Strategy
Many times I am asked to help a foreign (usually
European) company to make it in the United States.
But the pursuit of the American dream requires that
sacrifices be made. Everyone wants to be a star
like Elvis Presley, yet few have the real
determination to do so.
So, why are US companies so different. The internet is releasing the fictional boundaries of technology, making its usage and its future development available to anyone. Universities in Europe are doing a much better job teaching technology, yet we don't see a significant amount of European companies become successful. What is going on?
While I don't have all the answers, I can offer a few personal observations of why the American way - and - dream is alive and well:
1/ More entrepreneurs are bred by a capitalistic society than a socialistic society. Entrepreneurs with a personal stake and drive for success boost investor deal flow and premium supply. A significantly larger investor pool yields higher valuations for premium supply.
2/ Solid early-stage business acumen. While technology and programming skills can be acquired by virtually anyone, the European petri-dish, the ecosystem that supports the early-stage exchange of technology products and services is missing. As a result people with the business skills needed to bring those early stage products to market rapidly is virtually non-existent in Europe.
3/ Resilient attitude. Young Americans (and ex-pats like me who never felt at "home") are taught to make money and make themselves happy, young Europeans are taught to get a job at a reputable company and be happy. Taking risk and thinking different is a requirement of being a successful entrepreneur, in addition to withstanding a great amount of adversity.
4/ More risk-taking buyers. Customers, partners and acquirers are more entrepreneurial too. Aggressive competitive cultures force buyers to be more entrepreneurial. Technology innovation is accepted as the instrument of differentiation in many US businesses and customers will buy products that give them competitive edge and better quality-of-service.
5/ Continuous focus. Focus on success, short and long. Building a business that goes through several transformations to meet continuous market milestones is crucial to success, rather than a formal majestic plan with many dependencies that never materializes.
So, is there no hope for foreign technologists? Au contraire, I've seen some great technologies that, if unlocked, can find early traction and impressive valuations. It's time to judge a technology not by the country it comes from but the content of its innovation. The american dream is waiting for you. Are you up for the ride?
[In remembrance of Martin Luther King]
So, why are US companies so different. The internet is releasing the fictional boundaries of technology, making its usage and its future development available to anyone. Universities in Europe are doing a much better job teaching technology, yet we don't see a significant amount of European companies become successful. What is going on?
While I don't have all the answers, I can offer a few personal observations of why the American way - and - dream is alive and well:
1/ More entrepreneurs are bred by a capitalistic society than a socialistic society. Entrepreneurs with a personal stake and drive for success boost investor deal flow and premium supply. A significantly larger investor pool yields higher valuations for premium supply.
2/ Solid early-stage business acumen. While technology and programming skills can be acquired by virtually anyone, the European petri-dish, the ecosystem that supports the early-stage exchange of technology products and services is missing. As a result people with the business skills needed to bring those early stage products to market rapidly is virtually non-existent in Europe.
3/ Resilient attitude. Young Americans (and ex-pats like me who never felt at "home") are taught to make money and make themselves happy, young Europeans are taught to get a job at a reputable company and be happy. Taking risk and thinking different is a requirement of being a successful entrepreneur, in addition to withstanding a great amount of adversity.
4/ More risk-taking buyers. Customers, partners and acquirers are more entrepreneurial too. Aggressive competitive cultures force buyers to be more entrepreneurial. Technology innovation is accepted as the instrument of differentiation in many US businesses and customers will buy products that give them competitive edge and better quality-of-service.
5/ Continuous focus. Focus on success, short and long. Building a business that goes through several transformations to meet continuous market milestones is crucial to success, rather than a formal majestic plan with many dependencies that never materializes.
So, is there no hope for foreign technologists? Au contraire, I've seen some great technologies that, if unlocked, can find early traction and impressive valuations. It's time to judge a technology not by the country it comes from but the content of its innovation. The american dream is waiting for you. Are you up for the ride?
[In remembrance of Martin Luther King]
New opportunities in gaming
While Sony, Microsoft and Nintendo show impressive
results from a console perspective the game-play
market today appeals to a very narrow demographic.
Consoles are purchased by an age group 25-40 years
old. While that demographic may be most capable of
purchasing these consoles, we know from the types
of games sold at roughly $50 per game that daddy
plays more games than his children.
One could also argue that the most playful age range in our lives is from age 2 to 16 years old, yet the games and platforms provided do not meet that demographic. Fewer than 40% of teenage girls play any games, feeble attempts to turn existing games pink did not yield more sales, according to an executive at Electronic Arts.
So, rather than a deep dive in the existing game-play demographic, with even better graphics of game consoles, vendors should focus on a game-play experience that meets real market demand, removes the negative and vegetative connotation of gaming and instead exercises mind and body.
Nintendo has taken the first step of targeting a new game-play demographic and quite successfully so. Robbie Bach, president at Microsoft (who I recently spoke to) described his initial XBOX objective as building the best performing gaming experience. Sorry Robbie, wrong business objective. Sony is by far the leader in console gaming and has great opportunity; to lose or bolster its lead. Execution will be key, Jack Tretton will have his hands full on that one, but Sony's powerful assets in home entertainment should help.
While the console vendors battle it out on price and performance, we are seeing new entrants prepare themselves to enter the home entertainment demographic with new "game-play" propositions. The console vendors will see competition at a different level, Apple is just one of them.
One could also argue that the most playful age range in our lives is from age 2 to 16 years old, yet the games and platforms provided do not meet that demographic. Fewer than 40% of teenage girls play any games, feeble attempts to turn existing games pink did not yield more sales, according to an executive at Electronic Arts.
So, rather than a deep dive in the existing game-play demographic, with even better graphics of game consoles, vendors should focus on a game-play experience that meets real market demand, removes the negative and vegetative connotation of gaming and instead exercises mind and body.
Nintendo has taken the first step of targeting a new game-play demographic and quite successfully so. Robbie Bach, president at Microsoft (who I recently spoke to) described his initial XBOX objective as building the best performing gaming experience. Sorry Robbie, wrong business objective. Sony is by far the leader in console gaming and has great opportunity; to lose or bolster its lead. Execution will be key, Jack Tretton will have his hands full on that one, but Sony's powerful assets in home entertainment should help.
While the console vendors battle it out on price and performance, we are seeing new entrants prepare themselves to enter the home entertainment demographic with new "game-play" propositions. The console vendors will see competition at a different level, Apple is just one of them.