Why do Fast Followers often beat the First Mover innovators? Innovation drives our industry, attracts the best talent, attracts VC money, and wins fame for its leaders. Innovation leaders burst onto the scene, win early market leadership, but sometimes can't sustain the pace. Why do "fast followers" often jump in later and make fortunes? Is management responsible for the success or failure? Or, are these innovation leaders acquired by larger players before they have a chance to evolve into successful stand alone companies? I have been on the leading edge, sometimes bleeding edge, of technology for most of my career. I have been fortunate to be part of start-up teams that have created "first-of-its-kind" innovations at companies like Forte Software, AltaVista, Napster, Bowstreet, and Groove Networks. All of these companies were first in their field, yet few of them realized the financial rewards one would expect. Is it all timing and luck? I don't think so. Before exploring the reasons for success or failure lets review a list of innovation leaders and fast followers.
All of these companies were innovation leaders and market leaders. Yet, they were eclipsed by fast followers, in some cases multiple times, who imitated their innovation. My belief is that the technology was outstanding...the management was not. Clayton Christensen wrote The Innovators Dilemma which I reviewed in an earlier post. The basic premise of the book is that management optimizes around protecting their existing business and fails to recognize and react to disruptive threats. However, the examples in Christensen's book play out over 10 or 20 years. The above examples played out in 5 or less years. Are the same factors at work here? Lets take a look. AltaVista was the first search engine and the clear technology leader. The management at DEC didn't understand what they had and didn't invest the necessary resources to make it a business success. Later Compaq and CMGI squandered the search opportunity and tried to imitate Yahoo, Excite, Lycos, and AOL in the consumer portal game. Big mistake. Fault management. Napster was the first P2P file sharing application to bring together search, FTP, and Instant Messaging. Brilliant technical synergy. There are lots of reasons for failure here, mostly management decisions and unfortunate timing. VisiCalc was the first spreadsheet, invented by Dan Bricklin and Bob Frankston. I know Dan fairly well but have never asked him why he thinks VisiCalc fell behind and Excel moved ahead. This topic deserves its own post. My memory is that VisiCalc was slow to adopt the DOS platform. Lotus 123 moved ahead on DOS and achieved market leadership, but failed to jump onto the Windows platform fast enough. Excel did make the move and the rest is history. IBM created the PC revolution and was the early leader. Compaq was a fast follower focusing on "transportable" PCs and won huge market share. Dell came in later and trounced them all with a better business model. Compuserve was the first dial-up service provider. Together with Prodigy they dominated the market. Later AOL entered the game with superior marketing and original content. AOL absolutely dominated in the 80's and early 90's. Then @Home created the cable Internet market and took the early lead. It wasn't long before Verizon, Comcast, and other cable providers owned the broadband market. AOL never really made the transition from dial-up to broadband. In nearly every case the early innovators were eclipsed by fast followers. Why did the fast followers take over market share leadership?
It is overly simplistic to pin the success or failure of these innovators on one factor. There were a combination of factors at work. But in most cases the problem was not inferior technology, it was inferior management decisions. So, were these early innovators led by technical visionaries who were not good managers? Will the imitators and "fast followers" suffer the same fate and be overtaken by new fast followers? The list of "fast followers" above are more than just imitators. They have continued to innovate far beyond the original idea or feature set and have maintained market leadership. If you look closely at these companies they have a mix of technical visionaries and business management leaders. I discussed this with Robert Scoble who pointed out that it takes a different set of skills to start a company than it does to sustain a company. This balance of skills, I think, is the key to sustained market leadership. Cisco is an example of an early innovator that kept their market leadership position over time. Their technical founders brought in professional managers to take them to the next level. There is a rare breed of technical visionaries who are also great business leaders. Bill Gates, Gordon Moore, Larry Ellison, and Scott McNealy are examples. They are truly extraordinary and rare. However, I suspect that each of them has a strong business management team behind them. Bill Gates has Steve Ballmer. Larry Ellison had Ray Lane. The early innovators who failed did not have the business leadership necessary to sustain them. Lessons for entrepreneurs;
NOTE: This is a reprint of a story I wrote four years ago. I thought I would reprint it for the benefit of new readers of this blog. (by Don Dodge) |
June 27, 2009
Fast Followers
June 22, 2009
Segurança de Sistemas
Conheça a nova geração de prevenção a fraudes financeiras
São Paulo - Bancos e provedores de serviço tentam fechar o cerco à indústria dos crimes contra o sistema financeiro.
As formas de fraudar sistemas de instituições financeiras avançam praticamente no mesmo passo que as soluções tecnológicas elaboradas para detê-las. Os criminosos agem de diversas formas, desde golpes em usuários mais desatentos por meio de phishings (e-mails com armadilhas e sites falsos) até sequestros relâmpagos, no qual o cliente é levado a retirar seu dinheiro dos bancos para entregar.
Para tentar fechar o cerco a esses tipos de crimes, o CIAB 2009 apresentou uma série de ferramentas. Entre smartcards, leitores biométricos, evoluções de tokens e soluções para assinatura digital, todas têm o objetivo de minar organizações criminosas especializadas em aplicar golpes no sistema financeiro, ou a "Fraude como Serviço", denominação criada por Francimara Viotti, gerente executiva de segurança do Banco do Brasil.
Mais CIAB:
Por que os bancos brasileiros não quebraram?
Veja os destaques da agenda do CIAB 2009
Pesquisa aponta crescimento do uso de mainframe em bancos
Investimentos caem em filiais nacionais de bancos estrangeiros
Ex-CIO do Banco Real/ABN Amro investe em start ups de tecnologia
Bancos investiram mais de R$ 16 bi em TI em 2009
O Banco Banrisul, instituição geralmente citada pela sua estrutura tecnológica avançada, mostrou seu case de cartões inteligentes já integrados aos certificados ICP Brasil (c-CPF e e-CNPF). Além de garantir o acesso ao sistema bancário, eles ainda podem ser aplicados em outras finalidades, como na assinatura de documentos oficiais e acesso às atividades on-line da receita federal.
A leitura do cartão inteligente é realizada por meio de um equipamento ligado à porta USB do computador. Com esse tipo de proteção, um golpe é bastante improvável, já que a segurança não está baseada no que o cliente sabe, como uma senha, mas em algo que o cliente tem, ou seja, um equipamento e um certificado digital físico. "Além disso, o dispositivo se vale de um certificado padrão, que pode ser usado para outros serviços", afirma Rubens Bordini, vice-presidente do Banrisul.
Para evitar que a clonagem de cartões nos caixas eletrônicos também cause prejuízos, muitos bancos já estudam a implantação maciça de leitores biométricos. Um exemplo é o Bradesco, que está bastante avançado na autenticação biométrica em caixas eletrônicos.
Mas tudo isso não evita que sequestros relâmpagos continuem causando prejuízos país afora. A Certisign, empresa que afirma estar presente em 90% dos bancos, divulgou ferramentas que minimizariam os problemas. A que mais chama atenção é o FDS, um software no qual o cliente pode configurar diversas situações de contingência para o reconhecimento de situações emergenciais.
"Ao digitar a senha, por exemplo, o cliente pode configurar a adição de um número a mais para identificar que ele está em situação de emergência", descreve. Dessa forma, a máquina pode demonstrar um saldo menor e esconder informações de investimento, ainda que o cliente seja obrigado a colocar sua mão para autenticar o acesso.
Além disso, o sistema pode identificar um comportamento fora do padrão. Se um cliente nunca saca dinheiro fora de sua cidade em dias da semana, mas em determinado dia está tentando realizar uma operação na cidade vizinha, em horário de expediente, as ações preventivas podem ser acionadas automaticamente. Cabe ao banco e ao cliente configurar formas de comprovar a operação é legítima.
E outro temor dos clientes, relatados pelos profissionais da segurança, é bastante mórbido: que o criminoso corte uma parte do seu corpo para realizar a autenticação de caixas biométricos. Mas as soluções de biometria que são aceitas e implantadas, como a leitura de palma da mão do Bradesco, funcionam com leituras de veias, que devem ter sangue circulando.
Francimara diz que, antes de aplicar ferramentas, é necessário estudar os crimes que são realizados e buscar formas de garantir convergência entre diversos padrões. "Será um dos principais desafios dos Bancos daqui para frente, principalmente no que diz respeito às tecnologias de biometria", assinala.
June 11, 2009
Get Funding!
Great collection!!!
Get Funding
Finding the money is one of the hardest tasks for anyone starting a company. In this section, we'll describe the major funding options startups have, how they differ, and how to prepare to raise money.
Funding Basics
There are lots of options for funding a startup, with pros and cons to each. These articles, while focused primarily on the benefits and costs of VC funding and bootstrapping, also cover the basics of equity financing, government grants, and more.
The art of raising venture capital
by Garage Technology Ventures Founder Guy Kawasaki | Sep 2008
Fundraising Survival Guide
by Y Combinator Partner Paul Graham | Aug 2008
by Paul Graham | Nov 2005
3 ways to fund small businesses
Interview with startup experts Jeff and Rich Sloan
Dec 2007
Writing a compelling executive summary:
by Garage Technology Ventures Founder Guy Kawasaki | 2007
Myths of bootstrapping: a VC's point of view
by Matt Winn | Sep 2007
by Christine Comaford-Lynch
Microsoft small business group video on Finding Funding
Oct 2007
UC Santa Barbara's Technology Management Program video on bootstrapping
Aug 2008
Funding from VCs
Raising money from venture capitalists is the traditional way to fund startups, especially those that require substantial investment before selling a product. Companies with low startup costs, such as services delivered through the Web, may be self-funded or debt-financed, but VC funding is still the "classic" way to pay for a startup. These articles describe the dos and don'ts for working with VCs.
Three questions you shouldn't answer from a VC
by Rick Segal | Jul 2008
10 questions you should ask a VC
Jan 2005
by Foundation Capital General Partner Paul Holland
Ask the VC blog has many posts regarding VC (and other types of) funding
by Brad Feld and Jason Mendelson | Sep 2008
7 Reasons Startups Should Not Take VC Funding
by Greg Gianforte, CEO of RightNow Technologies and a serial entrepreneur | Aug 2008
by Tom Taulli | Jul 2008
MoneyTree's quarterly study of VC investment activity (Some links require registration)
2008
Jun 2008
by Ann Winblad | 2007
Tips on what VCs are looking for
by Seedcamp | Jul 2008
VC archetypes you'll want to avoid
by Serial Founder Larry Chiang | Jan 2008
by The National Venture Capital Association
TiECon 2007 interview with Mayfield's Managing Director Navin Chaddha
May 2007
Funding from Angels
Angel investors are, broadly defined, high net-worth individuals who invest in entrepreneurial companies, usually at an early stage. They're similar to VCs in that they provide cash to young companies in return for equity, but typically invest in smaller amounts ($25K to $250K instead of $1M to $10M). These articles outline where to find angels, how to prepare for meeting with them, and what they're looking for in companies.
Angels in America: a select sampling of angel investment resources
Jul 2005
How-to guide to angel investors
podcast featuring Ron Conway and Mike Maples | Jan 2008
Business 2.0 on how to find an Angel
by Michael V. Copeland | Feb 2006
6 tips for finding angels
by Susan Schreter
How to prepare for meeting an Angel investor
by Susan Schreter
Interview with angel investor Dave Berkus
Nov 2007
AlwaysOn interview with Ron Conway and Tim Draper on what angels want
Dec 2007
Government Funding for Startups:
Many countries have a range of government services available to help entrepreneurs start businesses, including loan programs and outright grants of money. Often, government funds will have so few strings attached that anyone eligible should seize them whenever possible. These articles point to government resources in the US and around the globe.
US Government's Small Business Administration startup funding for small businesses
The European Commission's Enterprise and Industry portal for small and medium enterprises
Canadian Government's programs and services for financing new businesses
The Australian Government's business gateway to grants and assistance
Taiwan's Institute for Information Industry program
Business Models
Your great idea isn't truly great until you can figure out how it'll make money. Any investor, aside from your mother, will insist on seeing a believable business model that proves you've targeted the right customers with the right solution at the right time and in the right way to make a healthy profit. These articles outline different types of business model for different types of businesses.
Microsoft ISV/Software Solutions Competency: Partner Pathway to Business Performance
by IDC | Oct 2006
by Guy Kawasaki | Oct 2004
A blog post on how to pay the bills before you get funded
by Steve Spalding | Mar 2008
One VC's rant on the "business model, schmizness model"
by Peter Rip | Jul 2006
An overview of software pricing for startups
by Dharmesh Shah | May 2006
Managing the Digital Enterprise
by North Carolina State University | 2008
Post on 14 Business models for free content
by Chris Anderson's | Sep 2008
The Pitch
Your business model is important, but no investor will ever see it if you don't first capture their interest with a compelling, concise, easily understood description of the business. These articles outline the components of an effective elevator pitch—a 60-second-or-less description of what you're offering, why customers would want it, who would pay for it, and the size of the market.
by then-VC Heidi Roizen | Jan 2002
Garage Technology Ventures' Perfecting Your Pitch
2006
National Federation of Independent Business's article on making elevator pitches work for you
by Steve Strauss | Feb 2005
Businessweek on the 60-second pitch
by Carmine Gallo | Jun 2007
Writing an effective executive summary
by Lars Leckie of Hummer Winblad
Ross Vickery from Greymouse Education explains how an elevator pitch can help your business succeed
Jul 2007
Sep 2006
Startup Nation offers 10 steps to a great elevator pitch
Aug 2006
Great post on elevator pitches
by EntrepreneurBlogSpace | Jan 2008
A conference table of investors describes aspects of elevator pitches that capture their attention
Feb 2007
Writing a Business Plan
Once investors are hooked on your pitch, you'll need to supply the details with the business plan. A typical business plan focuses on the company's unique product or service, the target customers, how the company will market to them, and how it will make money—in other words, the business model. These articles cover why the business plan matters and outline elements of a successful plan.
So You Wanna Write a Business Plan
Jul 2007
by Guy Kawasaki | Jan 2006
The SBA's Small Business Planner
The basics and elements of business plans as well as resources for writing them
Feb 2008
American Express Small Business's series on creating an effective business plan
Sep 2007
Business Plan World video on how to edit a business plan in Excel
Jan 2007
Introduction to Writing a Business Plan
University of Washington Center for Student Entrepreneurship | 2007
Creating a Financial Model
Business models are an essential planning tool for any startup, but veteran entrepreneurs know that cash is always king. The financial model shows investors how the company will manage its cash flow and when future cash infusions may be needed. These articles offer great advice for how to plan a financial strategy, what an effective financial model should cover, and how that model fits into the fundraising process.
SmartMoney.com's Starting Up column: How Much Money do I Need?
by Diana Ransom | 2008
by mark Leslie, of Leslie Ventures | Aug 2006
Peter Kent's financial modeling for startup companies, again in association with Stanford's Technology Venture Formation program
by Peter KentThe truth about financial models
by Momentum Venture Management's Managing Director Stuart MacFarlane | Sep 2007
Link: http://www.microsoftstartupzone.com/Resources/Pages/Get_Funding.aspx
