INDEX
Page numbers followed by t refer to tables.
Accenture, 88
acquisitions, 36, 98, 111, 120, 130, 136, 152, 157, 161, 162–163, 180, 182
angel investors, 76, 97, 106, 119, 141, 146. See also investors
Apple, Siri’s sale to, 1, 9, 22–23, 164
Arnold, Jim, 10
artificial intelligence (AI)
market opportunities using, 2, 46, 110
Siri development and, 10, 11, 12–19, 22, 91, 163, 181
BASF, 174
Bell Laboratories, 153
Bell telephone operating companies, regional (RBOCs), 31, 45, 52, 53
benefits, in NABC analysis, 180–182
benefits statements
business plans with, 81, 96–97
presentation to investors on, 102
Bercow, Doug, 10
big data industry, 95
Blockbuster, 42
board of directors
annual operating budget and, 120
CEO problems as responsibility of, 145
chairman role on, 121
crossover stage options and, 162
customers on, 123
famous people or celebrities as members of, 122–123
in framework for creating and building a great venture, 26–27, 120–125
importance of keeping members informed, 125
importance of selecting members for, 120
ineffective behavior of, 121–123
iterations in developing, 27
mismatch of experience of members of, 123–124
number of members on, 121
venture capitalists’ role on, 105–106, 108
Bosch, Carl, 174
Brachman, Ron, 11
breakthrough market opportunities. See market opportunities
Broadcom, 84
building the organization
culture of continuous innovation and, 170, 188–189
early customers and early revenues and, 134–135
in framework for creating and building a great venture, 27, 131–132
iterations in developing, 27
Neustar’s communications data services example of, 34–35
problems of corporate partnerships in, 136–138, 148
product management and, 132–133, 133t
business development departments, 136
business models
business plans with, 81, 85, 86–87
cost accounting issues and, 149
differentiation with, 81
example of unsustainable, 149
internet start-ups and, 94
market opportunities and, 95
presentation to investors on, 102, 115
Siri development team with, 16, 19, 181
business plans
business model in, 81, 85, 86–87
defining essence of new company in, 79–80
differentiated product or service solution in, 81, 89–96
financial plan with, 81, 99–100
in framework for creating and building a great venture, 2, 7, 26, 79–103, 192
go-to-market strategy in, 81, 85, 87–88
investors and, 116
iterations in developing, 27
market dynamics and, 151
mission statement and, 81, 82–85
Neustar’s communications data services example of, 32–33
price competition and, 151
quantitative statement of benefits in, 81, 96–97
seven ingredients of, 81
Siri development team with, 18, 19
understanding and analysis of competition needed for, 81, 97–98
value proposition in, 81, 100–101
business vision
business plans with, 81, 85–86
differentiation and, 90
presentation to investors with, 114
CALO (Cognitive Assistant that Learns and Organizes), 12
centers of innovation, 182–186
CEOs. See chief executive officers
CFOs. See chief financial officers
Cheyer, Adam, 9, 12, 14, 17, 22, 67
chief executive officers (CEOs)
changes of, over stages of the company’s life, 76
chief operating officers (COOs) and, 168–169
fatal mistake of keeping wrong individual as, 144–145
identification of best individual for, 60, 62–65
innovation as focus of, 170, 171–172
IPO decisions and, 166
length of tenure of, 65
chief financial officers (CFOs)
IPO decisions and, 166
reports from, 166
chief operating officers (COOs), 168–169
client-server architecture, 94
collaboration, and innovation, 179
commoditization of products, 150, 151
competition
industry consolidation and, 151–152
presentation to investors on, 102
price pressure in, 151
success of new company and, 159, 160
timing of start-ups and, 95–96
understanding and analysis of, in business plans, 81, 97–98
competitive advantage, 91, 151
competitors
demonstrating products or services of, 98
graphing differentiators of, 97
investors’ relationships with, 112
presentation to investors on, 102
consumer communities, 42
consumers
daily use of new product by, 41
market opportunities and analysis of, 40–41
reasons for buying products or services by, 40–41
COOs (chief operating officers), 168–169
corporate culture
CEO’s responsibility for, 62
collaboration and, 179
innovation and, 170, 171–172, 175–179, 192
mergers and, 165
Cortana (virtual personal assistant), 9
cost reduction, and market opportunities, 40
Covad Communications, 45, 51–53, 96, 106–107, 166
creative people, as management challenge, 172–175
credit card payment systems, 53–56
crossover stage
in framework for creating and building a great venture, 27, 159–170
Neustar’s communications data services example of, 35–36
new investors at, 164
options at, 162
strategic choices needed in, 160–161
customers
as board members, 123
business plan on, 134
fatal mistake of not knowing, 142–144
governments as, 135
“has to have” product for, 39
presentations to investors about, 115
quantitative statement of benefits for, 81, 96–97
working with, 11
DARPA (Defense Advanced Research Program Agency), 11–13, 17, 18
David Sarnoff Research Center (RCA Labs) 3, 4, 45, 177, 178–179, 185–186
Da Vinci robotic assisted surgery system, 48–49
delivery of services
market opportunities from changes in, 42
Ness’s example of IT resources using, 56–58
product management and, 132
Dell’Oro, 85
demonstrations of products or services, 98, 103
Deutsche Telekom, 11
Dietterich, Tom, 12
differentiated technology
Covad and home broadband access example of, 51
in framework for creating and building a great venture, 26, 46
Ness IT resources example of, 57
Nova’s credit card payment system as example of, 54
differentiation
analysis of competition and, 92–93
market-ready product or service in, 91–92
directors. See board of directors
DIRECTV, 45
disruptive technology
business models and, 91
Siri virtual personal assistant as, 91
Dodd-Frank Act, 43
Echo (virtual personal assistant), 9
Ehrlich, Paul, 173
Elavon, 56
employees
hiring of. See hiring process; recruitment
managing creative people and, 172–175
motivating innovators and, 175–179
ensuring the future
centers of innovation and, 182–186
common language and process for, 179–182
continuous innovation and, 188–189
encouraging innovation at all levels and, 186–187
in framework for creating and building a great venture, 27, 171–189
innovation as CEO focus and, 171–172
iterations in developing, 27
key principles guiding, 171
managing creative people and, 172–175
Neustar’s communications data services example of, 36–37
evaluation process for employees, 76–77
execution
building an organization and, 131–132
corporate partnership issues and, 136–138, 148
early customers and early revenues and, 134–135
financial management and, 130–131
in framework for creating and building a great venture, 27, 127–139
investors’ interest in, 113, 116–117
iterations in developing, 27
location decision and, 127–130
Neustar’s communications data services example of, 34–35
problems of corporate partnerships in, 136–138, 148
product management and, 132–133, 133t
executives
location decisions and, 129
See also chief executive officers (CEOs)
Fairchild Semiconductor, 82
Federal Communications Commission (FCC), 32, 33, 36, 44
financial management
chief operating officers (COOs) and, 168–169
cost accounting issues and, 148–149
fatal mistake of mismanagement in, 146
financial officers. See chief financial officers (CFOs)
financial plans, 79
business plans with, 81, 99–100
new product ideas conflicting with, 185
presentation to investors on, 103
risks described in, 81, 99, 103
flash memory technology, 47–48, 135
Food and Drug Administration (FDA), 49–50
Ford, Henry, 66
founders, role of, as executives, 60–62
framework for creating and building a great venture
breakthrough market opportunities in, 26, 39–58
building the organization and execution of, 27, 127–139
differentiated technology or business solution in, 26, 46
ensuring the future in, 27, 171–189
fatal mistakes of start-ups and, 141–157
investors and board of directors in, 26–27, 105–125
iterations in developing, 27–28
managing success at crossover stage in, 27, 159–170
Neustar’s communications data services example of, 28–37
value proposition in, 26, 27, 28
ventures that can change world and, 3, 191
funding
corporate integrity and, 74
Covad and home broadband access example of, 53
crossover stage and need for new, 164
initial questions from investors about amount of, 115
of initial stages, 80
intervals between rounds of seeking, 117
lead investors and, 124
quantitative statement of benefits needed for, 96–97
team road shows for soliciting, 109–110
venture capital partners’ meeting about, 117
future, ensuring. See ensuring the future
Ganek, Jeff, 29–33, 36, 61, 73–74, 168–169
Garvey, Tom, 12
Goldman Sachs, 107
Google, 9, 16, 19, 20, 61, 160, 163, 181
Google Now (virtual personal assistant), 9
go-to-market strategy
business plans with, 81, 85, 87–88
presentation to investors on, 102
government regulatory environment
high-definition television (HDTV) industry example of, 44–45
home broadband access example of, 52
limitations from length of time changes in effect in, 44
market opportunities from changes and, 43–45
regional Bell telephone companies example of, 45
governments, as primary customers, 135
greentech companies, 95
growth
market opportunities with, 7, 26, 28–31
success at crossover stage and, 161, 162
Grzedzinski, Ed, 56, 77, 169–170
Haber, Fritz, 174
Harari, Eli, 47–48, 64–65, 135
HBO, 192
Health Insurance Portability and Accountability Act (HIPAA), 43
Hewlett-Packard, 94
Horizon Ventures, 21
high-definition television (HDTV) industry, 44–45
hiring process
salespeople and, 147
See also recruitment
Hulu, 45
Hundt, Reed, 44
IDC, 85
industries
anticipating future developments in, 150–151
changes in standards in, 152
reacting to new technologies in, 152–157
transforming. See transformation of industries and services
information technology (IT)
client-server architecture in, 94
Ness’s example of market opportunities in, 56–58
initial public offerings (IPOs)
BEA example of, 153
funding rounds with, 119
industry consolidation and, 152
Ness example of, 58
Nova Information Systems, 56
predictability of revenues and profits and, 167–168
steps in evaluating use of, 165–166
innovation
CEOs and focus on, 170, 171–172
continuous process of, 170, 188–189
encouraging at all levels, 186–187
ensuring the future using, 27
managing creative people and, 172–175
market opportunities and, 46
motivating innovators and, 175–179
Neustar’s communications data services example of, 36–37
stage-gate method and, 181–182
value propositions and, 179–180
integrity, culture of, 60, 73–74
Intel, 51, 82–83, 106–107, 139
international markets, and market opportunities, 43, 56–58
internet
communications industry changes and, 14, 30, 41–42, 45, 86, 142
consumer communities on, 42
DARPA funding of, 11
example of reacting to new developments in, 153–157
home broadband access to, 51–53
new product and service opportunities with, 50, 94, 153–156
streaming video services on, 42, 45, 46
internet of things, 46
investment, presentation to investors on, 103
investors
analysis of competition needed for, 97–98
crossover stage and need for new, 164
examples of issues in discussions with, 111
financial management and, 130
finding a lead investor, 118
five meetings needed to gain funding from, 113–118
“five-minute rule” in telling story to, 114
in framework for creating and building a great venture, 26–27, 105–119
importance of first presentation to, 114–115
in-depth discussions with, 115–116
initial introductions to, 109
IPO decisions and, 166
iterations in developing, 27
liquidity and, 161
location decisions and, 128
major risks and issues discussed with, 116–117
Neustar’s communications data services example of, 33–34
number of investments at same time, 109
presentation on value proposition to, 101–103
quantitative statement of benefits needed for, 96–97
relationships with, 110
road shows seeking, 109–110, 112
role on board of, 106
Siri development and, 18–20, 21–22, 110–111
team involvement with, 109–110
three questions about company at beginning meeting, 113–114
time frame for seeking, before being seen as a stale company, 112–113
value proposition and venture deck presentations to, 81
venture capital firms and, 106–108
Israel, David, 12
iterations, in developing framework, 27–28
J.P. Morgan, 107
Janeway, Bill, 58, 155–156, 157
Jobs, Steve, 1, 22, 63, 67, 69, 163, 183
Kasisto virtual personal specialist, 23
King, Martin Luther, Jr., 63
Kittlaus, Dag, 13–14, 20, 22, 110, 180
Knowling, Bob, 52
Kodak, 160
Kressel, Henry
Covad Communications and, 51
Ganek at Lockheed Martin and, 33
Ness Technologies and, 57
Nova Information Systems and, 54, 55
role of, as investor, 70
Sensors Unlimited and, 167
Warburg Pincus and, 3
Lach, Mike, 169
Langone, Ken, 64
lead investors
crossover stage options and, 162
finding, 118
influence on company of, 110
parameters in choosing, 111–112
Lemnios, Zach, 11
Lenovo, 160
Level One Communications, 51, 52, 90, 96, 138–139
Lincoln, Pat, 10
management
centers of innovation and, 182
encouraging innovation at all levels by, 186–187
location decisions and, 129
motivating innovators and, 175–179
See also chief executive officers (CEOs)
managers
location decisions and, 129
marketing
hiring of salespeople and, 147
industry consolidation and, 151
international markets and, 161
poor coordination with, 148
product marketing role in, 133, 133t
strategies in, 92
success at crossover stage and, 161
marketing departments, 132
market opportunities, 2
analysis of consumers in, 40–41
centers of innovation and, 182
Covad and home broadband access example of, 51–53
daily use of new product and, 41
in framework for creating and building a great venture, 7, 26, 39–58, 192
growing with, 151
high-definition television (HDTV) industry example of, 44–45
industry consolidation and, 151–152
Intuitive Surgical’s robotic assisted surgery system example of, 48–50
iterations in developing, 27
market and technology trends convergence in, 43, 45–50
Ness IT resources example of, 56–58
Neustar’s communications data services example of, 28–31
new international markets and, 43, 56–58
new technology platform displacing existing products and services as, 43, 53–56
new technology platforms with new product and service opportunities as, 43, 50–53
Nova’s credit card payment system as example of, 53–56
“painkiller, not vitamins” businesses in, 39
presentation to investors on, 102
primary trigger points for, 43
quantifying value of solution in, 40
reasons for buying products or services and, 40–41
regional Bell telephone companies example of, 45
regulatory environment changes and, 43–45
SanDisk’s portable data storage systems example of, 47–48
transforming industries and services and, 41–58
ventures that can change world and, 3
market trends
Intuitive Surgical’s robotic assisted surgery system example of, 48–50
market opportunities from convergence of technology trends and, 43, 45–50
presentation to investors on, 102
SanDisk’s portable data storage systems example of, 47–48
Mayfield Fund, 143
Mead, Margaret, 185
medical technologies, 2, 46, 48–50
memory systems, portable, 47–48, 135
mergers, 120, 152, 159, 161, 162, 164–165, 170
milestones, in financial plans, 81, 99–100
mission statements
business plans with, 81, 82–85
presentation to investors with, 114
talent recruitment and, 72
value proposition in, 83, 84–85
mobile ad hoc networking, 142–143
mobile communications industry, 10–11, 14, 19, 23, 41, 42, 110, 160
Moore’s Law, 52
Morgenthaler, Gary, 20, 110–111
Morgenthaler Ventures, 20, 110
Moritz, Mike, 6–7, 108, 191–192
motivation of innovators, 175–179, 186
X Products Division of, 183
Motorola Mobility, 160
Myers, Karen, 12
National Institutes of Health (NIH), 48
National Venture Capital Association, 107
need, in NABC analysis, 180–182
needs hierarchy (Maslow), 175–176, 178
Netflix, 45
Neustar, 28–37, 43, 61, 73–74, 96, 168
new product development
centers of innovation and, 183–184
changes in industry standards and, 152
culture of continuous innovation and, 170, 188–189
example of reacting to new technologies and, 153–157
“has to have” product in, 39
industry consolidation and, 151
new technology platforms with new opportunities in, 43, 50–53
success at crossover stage and, 161
ventures that can change world and, 3, 191
Nova Information Systems, 53–56, 77–78, 87, 96, 169–170
Nuance Communications, 4, 16, 20, 111, 163
Obama, Barack, 47
Ogut, Bilge, 33
operating budgets, 120
organization structure
culture of continuous innovation and, 170
early customers and early revenues and, 134–135
in framework for creating and building a great venture, 27, 131–132
iterations in developing, 27
Neustar’s communications data services example of, 34–35
problems of corporate partnerships in, 136–138, 148
product management and, 132–133, 133t
PacketHop communications technology, 142–144
Page, Larry, 61
partnerships, corporate, 136–138, 148
Pepper, Robert, 138
performance review processes, 76–77, 147
Perrault, Ray, 12
Pickar, Ken, 172
Polaroid, 160
portable data storage systems, 47–48, 135
price competition, 151
private equity firms, 105, 119. See also investors
product development departments, 132, 148
product management
building the organization and, 132–133, 133t
custom solutions as failure of, 134–135
failure from poor handling of, 148
“it’s not good enough” approach in, 148
poor coordination in, 148
profitability
cost accounting issues and, 149
as objective, 131
publishing industry, 42
quantitative statement of benefits
business plans with, 81, 96–97
presentation to investors on, 102
“Quiet Boom, The” (Winarsky), 10
Raza Microelectronics (RMI), 70–71, 83–84, 85–86, 96, 101
RCA Corporation, 3, 44, 77, 176–178, 179, 185
RCA Labs (David Sarnoff Research Center), 3, 4, 45, 177, 178–179, 185–186
RDA, 101
determination of needs in, 68
of financial officers, 71
getting started tasks and hiring plans for, 68–69
investors’ assistance in, 69–70
passion of potential team members in, 72
of right people at right time, 71–72
Siri development team and, 67
regional Bell operating companies (RBOCs), 31, 45, 52, 53
regulatory environment
high-definition television (HDTV) industry example of, 44–45
home broadband access example of, 52
limitations from length of time changes in effect in, 44
market opportunities from changes and, 43–45
regional Bell telephone companies example of, 45
renewable energy industry, 95
revenue increases
market opportunities and, 40
review processes for employees, 76–77, 147
risks
discussion with investors about, 116–117
financial plans on, 81, 99, 103
presentation to investors on, 103
Royal Bank of Canada (RBC), 165
runway metric on available cash, 130, 131, 146
sales department, and hiring, 147
Salesforce.com, 91
Samsung, 48
SanDisk, 47–48, 64–65, 135, 137–138
Sarbanes-Oxley Act, 43
Sarnoff, David, 177
Scoble, Robert, 22
Scobleizer blog, 22
seed investors, 76, 97, 119, 141, 146. See also investors
senior management
centers of innovation and, 182
location decisions and, 129
managing creative people and, 172–175
motivating innovators and, 175–179
See also chief executive officers (CEOs)
Shaw, George Bernard, 63
Signal Lake Ventures, 80
Silicon Valley (TV series), 192
Siri (virtual personal assistant), 9–24
analysis of market opportunities in, 40
Apple’s purchase of, 1, 9, 22–23, 164
competition for, 92
Da Vinci robotic assisted surgery system and, 48
launching of, 22
NABC analysis for analyzing, 181–182
recruitment for development team of, 67
SRI Ventures and, 4, 9–11, 13–14, 16, 17, 18, 21, 111
technology challenge in, 16–18
SRI Ventures, 3
CALO project under DARPA and, 12
CEOs drawn from within, 62
commercialization process at, 4, 179
common language and process at, 179–180
Intuitive Surgical and, 48, 49
Kasisto virtual personal specialist and, 23
NABC method at, 182
PacketHop communications technology and, 142–144
Siri development and, 4, 9–11, 13–14, 16, 17, 18, 21, 111
stakeholder team used by, 13
team development strategies and, 76
Stanford Research Institute, 3
start-ups
failures of, 141
five fatal mistakes of, 142
not knowing customers and, 142–144
problems of corporate partnerships with, 136–138, 148
streaming video services, 42, 45, 46
Sun Microsystems, 94, 155, 160
surgery systems, robotic assisted, 48–50
team
centers of innovation with, 184
collaboration and, 179
culture of corporate integrity and, 60, 73–74
defining characteristics of, 60, 66–68
financial incentives for, 67, 72
in framework for creating and building a great venture, 7, 26, 59–78, 192
identification of CEO on, 60, 62–65
investors and, 109–110, 113, 116
iterations in developing, 27
modifications to, over stages of the company’s life, 60, 75–76
Neustar’s communications data services example of, 32
new product development and, 185–186
overconfidence of, 150
passion of potential members of, 72
presentation to investors on, 102
process for building, 60
recruiting talent for, 60, 67, 68–72
review process for members of, 76–77
role of founders as executives and, 60–62
start-up teams versus management teams, 66
technology development
failure to anticipate new directions in, 150–157
location decisions and, 129–130
technology solutions
in framework for creating and building a great venture, 2, 7, 26
iterations in developing, 27
Neustar’s communications data services example of, 31–32
ventures that can change world and, 3, 191
technology platforms
Covad and home broadband access example of, 51–53
existing products and services displaced by, 43, 53–56
new product and service opportunities and, 43, 50–53
Nova’s credit card payment system as example of, 53–56
technology trends
Intuitive Surgical’s robotic assisted surgery system example of, 48–50
market opportunities from convergence of market trends and, 43, 45–50
SanDisk’s portable data storage systems example of, 47–48
Tether, Tony, 11
textbook publishing industry, 42
timing
CEO decisions on, 64
financial plans on risks and, 81, 99–100
market and technology trends convergence and, 46
market opportunities and, 93–96
recruitment process and, 71–72
T-Mobile, 11
Toshiba Corporation, 138
Toyota USA, 135
transformation of industries and services, 41–58
Covad and home broadband access example of, 51–53
high-definition television (HDTV) industry example of, 44–45
Intuitive Surgical’s robotic assisted surgery system example of, 48–50
market and technology trends convergence in, 43, 45–50
market opportunities in, 41–42
Ness IT resources example of, 56–58
new international markets and, 43, 56–58
new technology platform displacing existing products and services in, 43, 53–56
new technology platforms with new product and service opportunities in, 43, 50–53
Nova’s credit card payment system as example of, 53–56
primary trigger points for, 43
regional Bell telephone companies example of, 45
regulatory environment changes and, 43–45
SanDisk’s portable data storage systems example of, 47–48
timing of new ventures in, 42–43
Travelocity, 42
US Venture Partners, 143
value proposition
business plan with, 81, 100–101
founder’s development of, 60
in framework for creating and building a great venture, 7, 26, 28, 192
investors and, 113
iterations in developing, 27, 28
market opportunities with technology trends and, 46–47
mission statement with, 83, 84–85
Neustar’s communications data services example of, 32–33
Nova’s credit card payment system as example of, 54
presentation to investors with, 101–103
Siri development team with, 15–16, 18, 19
venture deck presentations to investors and, 81
venture capital firms, 106–108
background of partners in, 107
follow-up investments from, 112
as lead investor, 118
liquidity and, 161
location decisions and, 128
long investing period used by, 107
partners’ meeting on possible investment by, 117
range of ownership of, 106–107
See also investors
venture capitalists
number of investments at same time, 109
role on board of, 105–106, 108
See also investors
founder’s development of, 60
importance of, 61
investors’ evaluation of, 109
leadership needed with, 64
Siri development team and, 9
stakeholder team for creating, 13
value proposition development and, 16
vision
business plan and, 81, 85–86, 90
CEOs’ development of, 63, 64, 65, 145
investors and, 99, 101, 110, 113, 114
Ness IT resources example of, 57
Neustar’s communications data services example of, 29–30
presentation to investors with, 102
SanDisk’s portable data storage systems example of, 47–48
Siri development team and, 10, 11, 13, 163
talent recruitment and, 72, 74
“world-changing” products or services and, 8
Vlingo, 163
Warburg Pincus, 3
Covad Communications and, 51, 53, 166
Ganek at Lockheed Martin and, 33–34
Level One Communications and, 139
Neustar and, 36
Nova Information Systems and, 54
Raza Microelectronics (RMI) and, 83
Winarsky, Norman
Siri development team with, 9, 10, 14, 20, 21, 110
SRI’s commercialization process and, 4
SRI’s common language and process and, 179
X Products Division, Motorola, 183
Yearbook of the National Venture Capital Association, 107
YouTube, 45