Who are the bad guys?

By Mark Zimmerman

I’ve been doing a lot of investor pitch preparation with clients recently and one area where companies are consistently weak is the “competition slide“.

Looking for some inspiration on improving these I came across a great analysis from Jason Cohen of Capital Factory in Austin.  He identified two classes of competitive positioning flaws that showed up frequently in 150 pitches he reviewed:

1. Being dismissive of the competition or worse claiming to have no competitors
2. Defining your company by comparison with the competition

I’d add a third:

3. Misunderstanding what a sustainable competitive advantage is.

Let’s look at each of these in turn.

“We have no (real) competitors”

95 times out of 100 this translates to, “we haven’t explored our market space thoroughly and/or we don’t know the industry in which we’ve chosen to compete.”  Four times out of 100 it maps to, “our solution is truly novel but we haven’t considered substitutes, the status-quo, homegrown solutions and the like as competitors for the customers time and money.”  One time in 100 (at most) it’s true; which sounds like a great thing but is often a curse given the high cost and extreme difficulty of creating a new market or the possibility that no competition means that there isn’t a market at all.   All three are red flags for investors looking at your pitch. In the first two cases, do your homework. In the last, think long and hard about whether this is the right go-to-market approach.

“We are just like competitors X and Y but cheaper” or “We combine all the best features of competitors X, Y and Z”.

“Cheaper” is always interesting but often doesn’t pass scrutiny in one of two ways:

1. The price advantage isn’t sustainable
2. The company is only considering the cost of its product in the “cheaper” equation not the total solution cost.

If your strategy is to combine the “best” features of your competitors, which customers are you “best” for and why?

“We are {smarter, faster, nimbler, more dedicated and passionate} than our competitors and we have (secret, patented) feature X.”

Smarter, faster, nimbler, dedicated and passionate are traits that every start-up team touts and often it’s true (at least compared with some competitors) but it’s unprovable and claiming it shows both hubris and naivete.   If your competitive advantage is just a particular feature, protected or otherwise, what do you plan to do when big company A or better funded start-up B inevitably copies it?

So what should you do?

• Make sure you’ve identified all viable competitors and alternatives available to the customer.  Ask yourself , “How are my potential customers solving this problem now?” or “If our company didn’t exist what solution would I recommend to our customers?”
• Present an objective analysis of how you’re different from the competition now and how you plan to stay that way.
• Don’t do an exhaustive feature by feature comparison but rather focus on the handful of key areas that matter to your chosen customer segment.  Ask yourself, “If I had to choose just one competitive advantage what would it be?”
• If there’s an area where you aren’t as good as the competition, make sure to identify and address it.  You’ll build credibility.
• Use the common “harvey balls” in a table or a “2×2 matrix” if they effectively communicate your competitive positioning.  If they aren’t the right tools for the job, explore other options like the Blue Ocean strategy canvas or this interesting approach from Kirill Sheynkman.

A weak competition slide is what investors typically see.  Making yours credible, complete and insightful will help your start-up stand out.

Mark advises entrepreneurs in the information technology, communications and entertainment practice at MaRS. He specializes in B2B enterprise software, SaaS business models as well as security and privacy.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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Top Three Reasons why Biotech Companies should use Social Media

By Jeremy Grushcow

Tech startups use social media avidly [rabidly?], but biotech companies? Not so much.  Biotech companies should be blogging, tweeting and linking in like mad, though.  Here’s why:

1. Your customers (pharma companies) do it. More and more pharma companies are active in social media. Take a look at this article in the December issue of Life Science Leader (h/t @FiercePharma) or read the Dose of Digital blog any day of the week and you’ll be directed to interesting information about how products are being developed, tested and marketed. These are things you need to keep in mind as you move through your own product development process. Also, lots of pharma folks are on LinkedIn, so if you are as well, you’ll maximize your ability to reach out through personal connections when you’re building a constituency for your partnering deals.  Here’s my Twitter list of BioPharma news and analysis.
2. Your investors do it. Check out this Twitter List of Canadian VCs, Angel investors and other funders.  Look at what they’re talking about, and you’ll see you don’t have to tell people what you ate for lunch (or disclose your latest lab results) to convey that you’re doing something interesting that other people are interested in.  Check out the CVCA’s blog, Capital Rants or the Maple Leaf Angels blog.  In Toronto? Stop in at the MaRS blog or the R.I.C. blog to see where investors will be and what they’re thinking about.
3. Your peers (other startups) do it. If you’re not participating in online conversations, you’re missing a world of good advice and perspectives.  Click over to Rick Segal’s blog or  StartupCFO, Mark MacLeod’s Blog. It doesn’t really matter that these guys aren’t involved in biotech. Lots of startups are facing similar issues to yours — funding, staffing, etc. and getting out of the biotech bubble from time to time can be a good thing.  Plus, being at a startup is isolating, particularly in biotech with its strong incentives to run a virtual company, so go online to find peers, mentors and other resources.

If this all sounds reasonable, but you’re still skeptical, or not interested, then find someone in your organization who’s excited about it, regardless of their actual job, and set him/her loose.  [Not totally loose, of course. Common sense is critical online because it’s hard to hit “undo” on the web, and appropriate confidentiality remains key to biotech ventures.  But all your people have common sense and discretion, right?]

We’ll be keeping an eye out for biotechs and other bioscience companies that are making good use of social media as part of our Biotech Trends series this coming year.  Other suggestions for 2010 biotech trends?  Let us know.

Re-posted from the Cross-Border Biotech Blog

Jeremy Grushcow is a Foreign Legal Consultant practising corporate law at Ogilvy Renault LLP. He has a Ph.D. in Molecular Genetics and Cell Biology. His practice focuses on life science and technology companies.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers pro vide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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Practical advice on kicking the Fossil Fuel habit

By David Pasieka

One of my passions for the past couple of years has been the translation of Sustainability principles into bottom line profits.

To this end, I am an active CleanTech Advisor at the MaRS Discovery District and have been a lecture leader at Shulich, Sheridan, McMaster, University of Toronto – Mississauga and The Directors College on such topics as Climate Change, Sustainability and Corporate Social Responsibility.

Recently, Tom Rand the CleanTech Practice Lead at MaRS released his long-awaited book: Kick the Fossil Fuel Habit– 10 Clean Technologies to Save Our World – my copy arrived on Monday. As I did a quick scan of its content, I was reminded of one of the famous Seinfeld episodes featuring Cosmo Kramer and his “Coffee Table book about Coffee Table Books” . When on Regis and Kathie Lee, Kramer demonstrates that the book is so practical that its cover “actually converts into a Coffee Table itself”. As my friend Sbrolla might highlight, I am not comparing Tom Rand to Kramer by any means(!). I am simply underscoring that this book is one of the “more practical” purchases that you could make. It walks us through the 10 technologies that will allow us to kick the fossil fuel habit. These include: Solar, Wind, Geothermal, Biofuels, Hydropower, Ocean, Smart Buildings, Efficiency & Conservation, Transportation and the Energy Internet.

I found it

1. ENGAGING – Tom does a great job in keeping it upbeat and ensures that it has elements of his keen wit
2. INFORMATIVE – the text walks us through the basics, issues and opportunities associated with each technology
3. TECHNICAL – simple diagrams and photos take the complicated technology and make it easy to understand
4. LOCAL CONTENT – lots of references to Canadian technology and even some Ontario based companies
5. PROVOKING – gets you thinking about having a Trillion dollars to spend and what the impact would be of this money
6. HOT TOPICS – in addition to the 10 technologies, Tom tackles Climate Change, Nuclear, Carbon, Hydrogen and Peak Oil
7. VISUAL – the photo’s are stunning and reinforce the fact that Windmills and Solar arrays are simply Majestic.

Overall a quick, visual and information book that deserves the read and an ultimate place on your coffee table. As a Science, Sustainability and Academic Guy, this is Great work Tom!

Let’s hope you don’t follow Kramer’s lead and spill the coffee all over the book when you get a chance to be on Regis.

David Pasieka is the Entrepreneur-in-Residence at the RIC Centre. Learn more here. Visit Our Contributors page for more information about David. Read his blog at www.cedarvue.blogspot.com

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Top three reasons why Biotech Companies should use Social Media

Re-posted from the Cross-Border Biotech Blog

By Jeremy Grushcow

Tech startups use social media avidly [rabidly?], but biotech companies? Not so much.  Biotech companies should be blogging, tweeting and linking in like mad, though.  Here’s why:

1. Your customers (pharma companies) do it. More and more pharma companies are active in social media. Take a look at this article in the December issue of Life Science Leader (h/t @FiercePharma) or read the Dose of Digital blog any day of the week and you’ll be directed to interesting information about how products are being developed, tested and marketed. These are things you need to keep in mind as you move through your own product development process. Also, lots of pharma folks are on LinkedIn, so if you are as well, you’ll maximize your ability to reach out through personal connections when you’re building a constituency for your partnering deals.  Here’s my Twitter list of BioPharma news and analysis.
2. Your investors do it. Check out this Twitter List of Canadian VCs, Angel investors and other funders.  Look at what they’re talking about, and you’ll see you don’t have to tell people what you ate for lunch (or disclose your latest lab results) to convey that you’re doing something interesting that other people are interested in.  Check out the CVCA’s blog, Capital Rants or the Maple Leaf Angels blog.  In Toronto? Stop in at the MaRS blog or the R.I.C. blog to see where investors will be and what they’re thinking about.
3. Your peers (other startups) do it. If you’re not participating in online conversations, you’re missing a world of good advice and perspectives.  Click over to Rick Segal’s blog or  StartupCFO, Mark MacLeod’s Blog. It doesn’t really matter that these guys aren’t involved in biotech. Lots of startups are facing similar issues to yours — funding, staffing, etc. and getting out of the biotech bubble from time to time can be a good thing.  Plus, being at a startup is isolating, particularly in biotech with its strong incentives to run a virtual company, so go online to find peers, mentors and other resources.

If this all sounds reasonable, but you’re still skeptical, or not interested, then find someone in your organization who’s excited about it, regardless of their actual job, and set him/her loose.  [Not totally loose, of course. Common sense is critical online because it’s hard to hit “undo” on the web, and appropriate confidentiality remains key to biotech ventures.  But all your people have common sense and discretion, right?]

We’ll be keeping an eye out for biotechs and other bioscience companies that are making good use of social media as part of our Biotech Trends series this coming year.  Other suggestions for 2010 biotech trends?  Let us know…

Jeremy Grushcow  is a Foreign Legal Consultant practising corporate law at Ogilvy Renault LLP. He has a Ph.D. in Molecular Genetics and Cell Biology. His practice focuses on life science and technology companies.

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Use market intelligence strategically

“Using Market Intelligence as Your Strategic Weapon” is the next “Growing Your Business” seminar, held Nov. 18  at a new location this month in Brampton. The monthly workshops are hosted by RIC Centre (Research Innovation Commercialization Centre) and the Ontario Centre for Environmental Technology Advancement (OCETA).

This session, held at the Rose Theatre, located on 1 Theatre Lane in Brampton, will explore the value of market intelligence as a strategic advantage for entrepreneurs.

Three excellent speakers are on board to explore  this subject.

Christine König, Managing Partner at König & Consultants Inc., studied biochemistry in Goettingen, Germany, where she received her PhD in Cell Biology. Her first entrepreneurial activity was to custom develop genetically modified mice that serve scientists as models for human disease. Later, she transferred that knowledge into a research firm developing state-of-the art breast cancer diagnostics. As an entrepreneur Christine has personally experienced the rise and fall of great ideas, potential markets, and partnerships.

Isabel Alexander, Vice Chair, Fielding Chemical Technologies Inc., founded Phancorp Inc., a small chemical wholesaling company that became a global standard for the chemical industry. On August 1, 2009 Phancorp Inc. merged forces with Fielding Chemical Technologies Inc. to provide Cradle to Cradle Care of Chemicals. Isabel now serves as Vice Chair, Fielding Chemical Technologies Inc. Since 2002, Ms. Alexander has been recognized as one of Canada’s Top 100 Women Entrepreneurs and in 2009, she was the recipient of the International Women of Influence Award for Emerging/Growth enterprises.

Usha Srinivasan, Director, Market Intelligence, Market Readiness Program, and her team of industry specific and information specialists provide quality and timely market intelligence to entrepreneurs in Ontario through the MaRS Market Intelligence Services. Prior to joining MaRS, she worked at Frost & Sullivan, a leading global market research and consulting company. She has technical and industry background in the water, environment and building technologies space, having worked with global clients such as GE, Siemens, IBM, Honeywell and Brita.

For more information visit  www.riccentre.com. Or  Register here, For further registration details, please contact Sharon Dotan at sharon.dotan@ric-centre.on.ca

Registration deadline for the event is November 17, 2009.

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