"Seeding and Supporting Start-up Success: An Interview with Michael J. Buckland"
by Scott Bennett
Thu, Oct 27, 2005, 07:17 PM
Michael J. Buckland
If you’re a technology entrepreneur, you’re up against a lot challenges. To turn that dazzling idea into a fundable business, you need strategic input on planning, market validation, commercialization, customer connections and, of course, business financing. That’s where a new breed of venture capitalist is making a difference by providing a more personalized approach in their support of early-stage entrepreneurs.
Mobility Ventures is a next-generation VC that accelerates the entrepreneurial trek "from concept to consumer." The company provides business and financial support to early-stage ventures focused on wireless communications and information technologies. Join us as we talk with Michael J. Buckland , a Mobility Ventures partner and successful serial entrepreneur, about start-up challenges, the mobility market, and the importance of failure to final success.
Michael, you’ve been a successful entrepreneur several times over and now are a private venture capitalist. What are the differences from this side of the table?
The most significant difference is the change in attitude. Most people from a business background know what it takes to start a business and the pitfalls of the day-to-day operations but face difficulties in knowing how to approach a VC for funding. Also, when one is personally involved in a start-up, one tends to be very sensitive about it and won’t listen to any criticism.
In contrast, as a VC one has to be analytical. I now look at businesses from an objective point of view rather than a personal one and can advise entrepreneurs on how best to approach a VC and receive a greater chance of funding.
Mobility Ventures claims to be a different type of VC firm – one that creates and shapes market leaders by more active, hands-on involvement with the entrepreneur. Can you elaborate on this philosophy?
Our difference is the breadth of our expertise – we’ve been in wireless a long time and know it well, from the technology to marketing and sales. Mobility Ventures has the complete skill set needed to see a start-up through the entire process. We fully understand that an entrepreneur may have an incredible idea but may not be able to express it well. We take a hands-on approach starting with an idea on a napkin to pinpointing a viable marketing position and initializing management and funding. We do everything to help the entrepreneur succeed.
What are your criteria for selecting a start-up? What kind of market and customer research do you perform or require the entrepreneur to undertake?
Our criteria are simple – a viable market, sound underlying technology, and an expert core team, in that order. Mobility is a broad field and we draw a lot from our own experience. We are able to tell entrepreneurs honestly the pros and cons of their product. But with the advent of the Internet, there’s no excuse for an entrepreneur not to research his idea on his own. It is now possible to validate ideas and product claims within days or even hours.
We want to know that the entrepreneur has done his research – we don’t just validate his ideas and market. What we really want to see is that he has done and is capable of doing the research himself. The founders also need to conduct primary research with potential customers and suppliers and get endorsements of the product or service. That goes a long way in solidifying their case.
Ultimately, we are investing in people and we want them to be capable of running their business and making it successful.
What inherent issues can diligent research reveal?
It can identify if a product is too early to market. In such a case, the much-needed early adopters do not exist and the product fails. However, as the technology becomes cheaper and accessible, and as more users become aware it, the same product can become viable and succeed. The Internet is a very good example of this.
How important is it for a start-up to identify, reach, and convince early adopters?
It’s very important to identify the early adopters as they can help define the trends as well as the market. The early adopters of the cell phone were the guinea pigs for the working out the bugs and setting up a feasible model. They established the fact that people wanted this kind of service. You can look at cell phones today and ask how many people really need a cell phone? They want one, but do they need one? Everyone aspires to have one, and it’s become an essential tool or status symbol.
It’s hard work to find the early adopters, but once you know who they are, it’s relatively easy to identify the way to approach and market to them.
From a VC perspective, what gaps do you see in most new ventures?
Sales and marketing are always the weak spots in start-ups! The founders have no problem making sales forecasts, but often they can’t back it up with detailed market opportunity analysis, product roadmaps, or customer research. This is where they fall down.
It gets back to the founder’s ego. Frequently, the founder is a technologist who thinks everyone will love his idea. It just isn’t so but he won’t listen to criticism or constructive advice about marketing and sales. It’s disappointing – we’ve seen good ideas ruined by the founder’s ego.
Also, too many ventures concentrate on the wrong things in that they work at a detailed level rather than look at the broader picture. The result is an overcomplicated message when it should really be focused on market benefits. In truth, people really don’t care how clever the technology is – they buy products and services and not the underlying technologies.
In your opinion, what is the right time to bring a marketing expert to the start-up?
Right at the beginning. We see people come in with great technology but without the marketing ability to envision where to sell it. They don’t do the research to understand why a company will buy their product. This is one of the biggest failures: asking only if the company will buy and not asking why they will buy it. This is where a marketing expert can make a huge difference. Of course, if Marketing can come along with a real live customer who will try and endorse the product, then that’s a wonderful thing.
Do you see a lot of disruptive technologies in mobility? How does the marketing compare to that of incremental technologies?
Occasionally, we see a real disruptive technology, but mostly they are a lot of me-too products. We’re seeing more marketing plays disguised as technology plays. For instance, a new way to distribute content to a mobile phone will not be of interest if it only applies to one or two platforms. It needs to be much more global to attract capital – but then, such innovations are more likely to be controlled by the device manufacturer.
In the mobility industry, if you have technology that is truly disruptive, you have to partner with someone on either end such as the carrier or the device manufacturer. Trying to fit in the middle on your own is a very difficult thing to do and entrepreneurs don’t spend enough time thinking through this vital step.
Many start-ups don’t realize that while you can find the “need,” you also have to create the “want.” This is precisely what we did at GR8 with a carrier- and device-agnostic product – we captured the market from a marketing position and not a technology position. Of course, the ideal situation is to see a gap in the technology and a gap in the market simultaneously, which provides a totally different point of view and potential for opportunity.
How does this affect the belief that convergence is the result and not the driver of new products?
That’s the way convergence should work! Every now and then, companies try to force convergence but they just don’t succeed. For example, in an ideal world, everyone should want the PDAs with their cell phone but users find them too complex and have difficulty with the functions. The benefit of the combined product is still not evident to most people, and is likely to remain a niche market in its present form.
What are the market trends for mobility solutions?
The market wants to be device-agnostic – deliver pictures, text, and content regardless of the platform. Products and solutions need be universally compatible with all devices and connectivity to fully use the computing power out there. For example, a classic case today is the difficulty of sending pictures from a mobile phone to other devices without involving a lot of formatting and modification. A platform that would solve this problem is what people are looking for.
Such solutions will benefit the consumer greatly, but will lessen the importance of the carriers. How do you overcome their resistance?
With great difficulty. It’s a fact that most carriers are slow to react. SMS messaging is a good example. At first, it was a free service but took off in 1998 to become a $40 billion industry. It was done without any marketing from the carrier. Instead, it was discovered by kids and adopted by the adults. Now it’s a way of life and generates huge revenue. In this case, the market forced the carriers to offer SMS messaging options.
The hardest part is to convince carriers to open their offerings to people not on their system, basically non-subscribers. And it’s a lot harder in the U.S. compared to Europe because of the disparity of the standards, rivalry of carriers, and interests of protecting customers. But in the end, carriers are really denying themselves revenue.
Yet isn’t the U.S. the source of great innovations in telephony?
Yes. But it’s not just the technology but also our attitude towards success and failure. America is truly unique in its willingness to fail – this doesn’t happen anywhere else in the world. In the U.S. , you have to fail three to four times before you succeed and are invited to the insider cocktail party. That’s not the way it is in Europe where failure is the kiss of death. Failure is seen as part of the learning curve in the U.S. and a source of continued innovation. America ’s innovation will always lead the world.
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Michael Buckland, a partner with Mobility Ventures , is a broadly experienced executive and business manager with over 30 years experience, specifically in start up wireless communications businesses, building revenues and establishing sales and profitability. With his first hand knowledge of being a successful entrepreneur, he has a strong sense of what it takes to build a successful company.
Since the late 1970's, Mr. Buckland has been involved with wireless communications, initially with British Telecom, as a consultant on their Radiophone system, known as System 4, the first full duplex mobile telephone system in the UK . He also played an instrumental role in establishing British Telecom's Cellnet in the early 1980s. In the mid-1980s, founded and directed Mobile Communications Ltd., the first and largest virtual service provider in the UK , which he successfully sold to BT Cellnet. He also co-founded SpeedLink Communications, a DSL broadband access & services provider in the UK , and GHW (Global Wireless Holdings).
Mr. Buckland was the founder and managing director of Gr8 Ltd. The GR8 system was an industry first and offered a unique multi-purpose delivery platform that was network agnostic and capable of delivering multi-content to both handsets and the Internet. The company developed strategic partnerships with leading carriers and equipment suppliers including BTCellnet, Genie, Motorola, Nokia and TSI. Gr8 was sold to Digital Bridges Ltd.
Mr. Buckland has played a key role in the Genesis Campus portfolio company Mobile Radius, specifically in business and channel partner development, as well as the launch of the Text42 division.