Posts tagged ‘Add new tag’

Some learning for a start-up. Stay focused and never forget – cash is king!

I would like to share some essential experience that I’ve learned over the last 11 years as an entrepreneur as well as an investor in start-ups. Some of them I’ve learned painfully and some I’ve got free of charge.  Nevertheless the list is not complete and I am sure that there are lots of other learnings. Please feel free to add your comments.

Pareto’s 80/20 Rule: efficiency works

Some start-ups (especially German start-ups, because they often tend to over-engineering) are too late with their product launches. Perfection and too many features are often the reason why a start-up needs to much time, money and is losing its competitive edge. My experience: Just get the product out of the blocks fast and learn from your customers’ feedback.

Keep your organization mean and lean

Long story short: An employee of a start-up should either build something or sell something. In most cases a young company doesn’t need HR staff, personal assistants or other people, which don’t create value (revenues or products/technology). Take this into account for every hire.

Liquidity is more important than profitability

Focus your operational business on cash flow and not on EBIT. Most important is to be able to pay bills and sign paychecks. Your entire organization and all team members should think this way. Cash, cash, cash – is king!

Plan with a bottom up approach

If your budget is based on a business plan which is calculated with a top-down approach you might be lost. There is a huge difference if you are describing the entire market potential or if you are planning your revenues for the next 12 quarters based on a defined sales process with a logical metrics.

Define your Must-Wins (we call them “game over customers”) and go get them

In some particular markets it can be more than important to add some lighthouse customers as early as possible – maybe even before the official launch announcement. These “game over customers” will block competition and will gain a lot of credibility. Well and it will focus your sales efforts onto the right targets.

Run your company with an evolving KPI-chart

Key performance indicators (KPIs) are benchmarks that all levels of a start-up can use in their day-to-day operations. I highly recommend defining the relevant KPIs as early as possible in order to run and to manage the start-up. There are hundreds of KPIs that can be measured. It is an ongoing task to pick the relevant once, to monitor them and to reconsider if there might be additional important KPIs.

Never drink your own cool aid (never believe in your own PR)

You might know of some good examples for this advise. Start-ups with huge and impressive press coverage, various speaker slots at conferences and intensive social media buzz – but no real business. Press coverage can support the business but it is never ever an indicator for the success of a start-up. New customers, installations, bookings, revenues and cash-in are important. I’ve seen founders and management teams of start-ups, which lost reality because of there PR success. Please be aware!Reblog this post [with Zemanta]


March 21, 2010 at 10:39 am Leave a comment

10 year anniversary of Target Partners

Image representing Target Partners as depicted...
Image via CrunchBase

Target Partners invests in young technology companies in Germany, Austria and Switzerland since 10 years. Through our personal commitment, a global network and our deep experience as entrepreneurs, managers and venture capital investors, we support our portfolio companies.

This March we celebrated our 10th anniversary.

Reblog this post [with Zemanta]

March 20, 2010 at 4:29 pm Leave a comment

2009 from a German VC’s perspective

The German Internet start-up battle

There is lots of noise in Berlin. Numerous Internet start-ups have been founded and seed-funded in the last years. 2009 was dominated by new (mainly copied) ecommerce cases. As an early stage VC investor (Target Partners) who sees the majority of the investment cases in Germany it was quite astonishing to see the “rat-race” which is currently taking place. The German Internet and ecommerce incubator scene was ruled from the European Founders for some years. Due to the fact that this concept seems to work others tried to copy this approach. The result is that three or even more incubator organizations are often competing with their start-ups today. A good example is the battle of the German copy-cats Sponsorpay, Gratispay and Deal United. Every start-up is supported from a different incubator an is doing more or less the same.

I highly respect the power and the experience of all involved people – in the supported start-ups as well as in the incubator organizations. But I am honestly asking myself if it is a good thing or a waste of resources that such kind of competition looks sometimes like an end in itself. Well, time will tell and in the meantime we all have some interesting things to observe.

The deal flow in 2009

This year was really an interesting one. We’ve seen more deals than ever before. Statistically the ratio of pure Internet case has decreased and the percentage of technology cases has increased. Which is a good tendency because we believe that technology can make the difference. If I compare the deal flow in 2009 with the deal flow some years ago it is more than obvious that the German start-up market is growing. There is no proof but I think this is the result of various causes, e.g.:

  • Public stories about successful entrepreneurs are motivating other people
  • Active business angels are supporting entrepreneurs and their ideas
  • Social media are connecting and inspiring entrepreneurs
  • Seed investments are possible again because of the establishment of the High-Tech-Gruenderfonds and some business angel networks

I hope that this trend will continue.

The investments in 2009

Will be posted in some days…

Reblog this post [with Zemanta]

December 25, 2009 at 6:46 pm 2 comments

Who is posting?

This blog is a view from an VC investor, entrepreneur as well as from a private person. You'll find posts about Startups, Technology, Venture Capital, Entrepreneurship and about life and fun. If you enjoy and if you don't please send me your critical comments.

OJ on Twitter