I've spent far too much time watching teams struggle with how to name their products- it's something that seems easy but is actually fraught with problems so some time ago I set up a checklist of the 8 things I thought you should check. The worst of these is often the domain name- most good ones have gone- so here is really simple tool to produce a bunch of suggestions quickly that can go straight into a domain name bulk service for checking.
To use this tool simply start tying lots of "First bits" (based on known words, sounds letter patterns or adjectives), and lots of endings you like in the second. The page will constantly update the third output column with a list of candidates you can then use to copy and paste into a domain name service like this one.
Nothing is stored so do keep the lists you make by copying and pasting them somewhere on your own computer.
| First bits | Second bits | Output |
I really enjoy the RisingStars Portfolio Seminars: it's always great to see gathered together the portfolio company directors and to see the value they get from talking to each other.
Jonathan opened proceedings pointing out that there are differences between some of the doom-and-gloom in the current Private Equity market compared to some of the solid progress recently in the RisingStars portfolio. In particular pointing out that the increase in valuations for RSGF1 over the last 6 months is unusual in the market.
Second up was Julie Meyer, famous for founding First Tuesday, and now CEO of Ariadne Capital spoke about entrepreneurs with some really interesting quotes. Some key trends she highlighted included:
Julian Viggars, our Head of Technology opened up by cheering us up with some economic facts of life- thanks Julian! But within the data were some interesting gems:
Some years ago, Alison Kibble the CEO of Femeda, introduced what was then an early-stage investment, so it was great for her to come back and explain the progress that the company had made with their disposable home treatment for one of the most prevalent medical conditions; female urinary incontinence. She was able to report a staggeringly positive response to their medical trial, although I wouldn't have minded if she'd found a better example of the support she's had from investors than posting adverts for the trial in our office toilets!
She was able to illustrate well the way in which the large FMCG companies are interested in the way that Femeda, and companies that ilk, can move much faster towards new products being on the market, and hinted at the potential for a corporate transaction to take the product to a global market.
Finally, Alison finished up by describing the desperate stories from the comments on the company's blog which illustrated just how far the product can go to improve people's lives.
Ben Hookway is one of our "serial entrepreneurs". He provided some war stories from NextDevice, the issues they faced with selling their mobile UI software company into the handset value chain. In particular the difficulties of taking the decision to sell at that time. He pointed out how important some key aspects of the exit process had been:
Ben described his next role, as CEO of Vidiactive- more of this later...
In the question and answer session, Stuart McKnight observed the gradual return of some of the top tier investors during Q2 who had been quiet in Q1. Julian responded that we've seen an increased level of interest, but still a little shaky and uncertain. Jonathan observed that he'd seen an institutional realisation that technology had been a bit neglected in the rush to increase Private Equity funding. "Attitudes have changed", he observed.
He suggests that you find ten people to use your service who "trust you/respect you/need you/listen to you...", that, " if they love it, you win. If they love it, they'll each find you ten more people (or a hundred or a thousand or, perhaps, just three). Repeat."
Seth Godin makes a key point here which we've seen many start-ups, large and small, all miss: if you require that your business grows virally, then all that spend on launch and PR is wasted if you do so when the product is not yet good enough to be viral by itself. That's not to say that PR etc. can't be great when you want to pour some petrol on that fire, but you're better saving up that fuel for when the fire is already spreading by itself.
However, I'd have to suggest some qualifiers. The test is not those "first ten", but whether those first ten start to "spread the virus" by themselves. That might well mean that they need to be considerably more than ten so that you can measure and understand them, but it certainly doesn't have to be ten thousand. Key to that viral spread is the communication from an existing user to a new one, and that's a tough barrier because the user chooses it, not you (how many different ways have you heard Twitter described?). My view is that Seth Godin's definition of the "first ten" might prove a little unrepresentative- they're clearly going to listen, and therefore give you the chance to communicate much more sophisticated and subtle ideas, you can "teach" new things, or even "un-teach" perceived wisdom. You could also get those first ten to think about what the service could mean to their lives and how they might use it, and it will be much more memorable. So I would suggest that the "first ten" test is necessary but not sufficient.
Jemima Kiss' inteview with Mike explaining Ensembli:
This post will doubtless expand as people make suggestions, but I have meant for some time to get round to posting a checklist I can refer people to look over.
| Checked | Item |
| Have you removed as many superlatives as possible and replaced them with numbers/facts (e.g. changing "Joe has been a leader in user-interaction design for many years" with "Joe has lead user-interaction design projects for BigCorp, and SmallHouse for 10 years and produced the interaction for the WebThingy service used by 200,000 people a month.") | |
| How would your customer describe the problem that your service/product solves? | |
| How do your customers solve that problem now, and how will they solve it in the future without you? | |
| What do your customers pay to solve that problem today, what will they pay for your solution? | |
| How will you to teach each of your customers about your solution to the point they will buy and how much will that cost (don't forget to allow for those that never get round to ordering/paying)? | |
| How will your competitors react to your early success? How much will it cost them and how long will it take them to catch up? | |
| How long has it taken other companies entering this space to build up customers? | |
| Have you identified a clear route to market, is there a beachhead market segment you have in mind, in what way is this different from the mainstream? | |
| What more must be done, what will it cost, and how long will it take before the product/service is ready to generate revenue? | |
| What have the team done before (illustrated with numbers where possible)? | |
| What other businesses have made good money and/or exits working in the same problem space? What steps have you taken to learn from the people who did that? |
"The average cost of selling is too high."
In particular, we see many companies where the need to communicate complicated messages, over a succession of meetings, and maybe customer trials too, is itself expensive. This is then compounded because the proportion of those customers that convert is not too great, and they take a long time to decide to start paying. Finally when a proportion place orders it doesn't cover the cost of all that customer engagement.
It's a shame that 11 reasons isn't such a tidy number!
Every now and then we come across founders who are rather sore. They started a business with a partner and shared the equity 50:50 using an off-the-shelf company only to find that things didn't work out (see the post on Boomerang Founder). We thought we might commission some standard legal docs which we could then give away to anyone starting a business which might set things up a little more fairly. Obviously people would be wise to take legal advice, but often they don't at that stage. What I'd really like to find is some people willing to be quoted on an announcement about these legals to explain their experiences of falling out with founders and why they'd want to use something more robust another time. If you know anyone who fits the bill perhaps you'd ask them to get in touch.
Jonathan Diggines our CEO opened the event with a view of the state of the economy generally: hard to make this part positive looking, but Jonathan pointed out that there's no reason to think that tech sector will be worse effected, and some reason to think it might be better than most.
I was curious to see what the aggregated view of the portfolio companies was on Corporate Finance advice. So I asked our portfolio companies to give us some feedback which I've summarised below. Any comments would be very welcome!
A common issue I see with early-stage companies is over their selection of entry market sector. Obviously, all investors love their portfolio companies to have a huge vision to change large markets in a big way, and on occasion the best way to plan to reach that is to go straight to the big opportunity head-on. However, often that's going to be slow and hard, perhaps credibility is crucial, in which case it's really helpful to find a launch "beach-head" in the lines advocated by "Crossing The Chasm".
So where companies have chosen to use a beach-head, the next question is which one? If you just pick the "largest sector", or the one you're "most familiar with, you face a danger- the best entry sector is not always the obvious one. I think there's a different set of thinking about launch markets, where you highlight a slightly different set of factors as important.
| Criterion | Ultimate market | Launch market |
| Scale | Ideally as large as possible | Manageable, but low priority in selection process |
| Differentiation of offering against competition | Important | Critical |
| Focus on customer problems | Can be more general- boxed product is easier to scale | May be helpful to have solution type sales initially |
| Unit sale | Very large or small is good- scalability is crucial | Ideally ~1 months burn- large enough to be useful, but small enough to avoid lengthy approvals |
| Mission criticality | Mission critical to the customer provides extra value | Ideally not too critical- hard to buy from a startup |
| Length of buy cycle | May be long | Short is incredibly helpful |
| Easy customer identification | Useful | Vital |
