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CostEffective IT: Successful Ventures
Cost-Effective
IT: Successful Ventures,
by
Richard Sonnier
Houston
Business Show "Advisor" Richard Sonnier, of the Information
Technology Services firm Nimble Services, Inc., provides weekly
information on our show about business technology issues. He can be
reached at 281-445-4800 x250 or rsonnier@nimbleservices.com.
This week I will discuss the keys to successful IT ventures.
Venture Capital (VC)
John Jaggers of the Sevin
Rosen Funds presented at the recent Rice Alliance IT Forum. His
presentation was "Myths and Realities What Every Entrepreneur Should
Know About VC When Launching a New Company." He made several very
interesting points about IT ventures in which the Sevin Rosen Funds
specialize. Sevin Rosen has launched such IT companies as Compaq,
Lotus, Cypress, Electronic Arts, SGI, Citrix and CIENA so they have
experience with this industry. I will summarize his presentation
in this article. You can view the presentation slides at the Rice
Alliance website (link).
Top Three Criteria
Most venture capitalist agree that the top three criteria for a
successful IT venture are:
- Team
- Market
- Uniqueness
With the team being the most important and the uniqueness of the
business being last. Now, isn't that interesting? For all of the high
technology hype, the most important element of a successful technology
business is great people; and the second most important element is
marketing. In fact, the overall point of Mr. Jaggers' presentation is
that an IT business requires great people, good marketing and hard work
to make money just like your business.
Why IT Ventures Fail
You might think that most new technology companies fail because the
technology does not work. This is not truth according to Mr. Jaggers.
You "can count the 'technology failues' on one hand." The main problem
is marketing. As we say on the Houston
Business Show, marketing can make great difference in your
business. For a new IT company, marketing becomes the barrier to the
success. Apparently, many new companies successfully develop the new
technology but cannot market and sell it effectively or it turns that
no one wants it.
After marketing, the next big problem is "underestimating the
competition." Contrary to what you might read elsewhere, the United
States has lots of smart people. A new company will have competitors
for its new technology either from other new companies or established
companies. Protecting your intellectual property with patents or other
devices is important, but being first to the market is the key.
Finally, people problems cause failures. Company chemistry is very
important for any business, especially the startup where everyone is
working hard and putting long hours. It takes strong people to be
entrepreneurs with the vision to change the world, but these people
need to work together as a team to make the company successful.
Next week I will
discuss service oriented IT.
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