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Paul Ward
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This is a good analysis. VC will take too long to pick it up unless, as he says, they're innovative. The reason is that they distrust cheap assets. They want their money to buy expensive, protectable assets. And yet expensive and protectable are two concepts that can be separated. It's far cheaper to get a new company up and running in ways that are differentiated from a brand standpoint, and lawyer up on protecting the brand, than to do patentable stuff. I would want a version of this article that looks at the root cause of increasing total return to shareholders. This is essentially what gives VC their exit ... it creates an argument for the future value of the cash flows that VC can sell to people whose money will replace theirs (next tranche, IPO). So, the problem to solve REALLY is creating measurable, increasing total return to shareholders. What are the drivers for that? 1. Compelling and engaging value prop - for social media plays, this means solving a problem, engaging the imagination, architecting a user experience that is easy to adopt AND YET NOT GENERIC (god, I hate those 'don't make me think' UI people who make everything so 'web 2.0' that it's all the same vanilla cr*p), lowering barriers to recommendation, allowing co-creation and sharing, and enhancing the customer's reputation. 2. Cognitive sophistication in customer experience management. 3. Well-designed multitouchpoint ecosystem, including partner ecosystems, that are measurable. 4. Hella analytics. 5. Lots of experiments, well-designed and targeted to increase customer engagement (see Gallup and Carlson). Done. The rest of the argument can fit with what I outlined. Remember, the goal is NOT to make it cheaper, or to engage customers sooner, or even to get revenues. Cheap can be bad. Engaging early adopters is not enough. And revenues can be expensive - that is, you have to have PROFITABLE revenues that are ALSO early indicators of FUTURE CUSTOMER VALUE. All that equals ... increasing total returns to shareholders. THAT you can get funded.
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Jul 31, 2010