I now have a set of predictions about emerging technologies, web 2.0, etc from a wide range of sources. In the past month professional researchers, consulting firms, financial analysts, business schools, etc have all put out interesting documents. The broad direction is pretty consistent, and I guess to you all not too much of a surprise, but the question I most often get asked is where and how can I figure which start-ups I should be watching, or even investing in, (but please don’t use this post for that purpose!), that will make a difference.
Let me start by saying that I think that might be the wrong way round, I do believe that you should start by deciding what, where and how technology will impact your business, and if you want to know more about taking this approach then take a look at Capgemini Technovision. However let’s assume that you have reached the stage of needing to a) find start-ups and b) to make sense of their potential to survive, at least long enough for you to gain value from using their technology.

Logically you will be looking for players in the new technologies and that means using the medium of Web 2.0 because that’s the way they think, act and operate their businesses. A good starting point for this is Crunchbase a derivative of the ‘TechCrunch’ events, on in San Francisco 8th to 10th of September. This is a free listing of over 8000 companies, some of which are pretty big now, as well as some very small garage type operators. The directory lets you play cut and dice around topics, location, or anything else. In addition there are more 15,000 people who are involved in technology innovation as well as all the latest news on acquisitions, funding rounds etc.
In itself TechCrunch is a perfect example of a new market place around communities. It’s not the only one, but I find it one of the easiest to use and the most comprehensive. The real challenge that I suspect is what hooked you in the beginning is how to decide on their potential. This is pretty well summed up in John Ettle’s book; Managing Innovation, and if you follow this link you will get an extract of some pages, scroll down to the summary section to get his definition. My own formula is much simpler; I use three points to decide on the where the value proposition should focus;

  • Creation of new value by a product or a service resulting in additional revenues and share
  • Change in the manner of doing business that will result in greater share of an existing market
  • Organisation of resources, processes, or activities in a more effective manner to save on costs

Some of you may recognise these three points as referring to the terms ‘Innovation’, ‘Intimacy’ and ‘Industrialisation’, and you would be right, I am not suggesting that my approach is unique. However lets add the real three questions that I use to decide if a start-up can survive the market competition as others invariably will try to enter its space;

  • Other companies, particular the mainstream vendors, have built in barriers to adoption that prevent them from readily following
  • This start-up can get there sooner than any competitor and is able to built an unassailable position and share before competition could start
  • The management of the start-up has the ability to execute in getting the product to market and deny others the chance to get critical mass

Not rocket science, not terrifically intellectually clever, but it seems to work. Try it on the start-ups you know that got to be successful and I think you will see my point.