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Random Thoughts

So for at least the next couple of days, we’re in that weird time period between reflection and anticipation, closing out last year’s unfinished business and preparing for the next year’s challenges.

As I reflect and anticipate, a few random thoughts come to mind I thought would be fun to share.

Some phrases I collected in 2016 are:

The highly alliterative “Cultured poultry”, which is growing meat in machines – it’s not a new idea, nor does it sound particularly appetizing IMHO, but it’s an idea that has certainly been gaining momentum.

“Battle of the Buzz” – In 2016, more than half the states have legalized marijuana for certain medical conditions, and more than half a dozen states legalized recreational use. With craft breweries and craft spirits already disrupting the landscape, the alcohol (and pharmaceutical) companies, are terrified they may lose more market share and have bankrolled the fight against legalization.

And then there are established companies like Constellation Brands considering embracing the weed.

“Aging in place” –  By 2050, I will have joined the more than quarter of the US population who will be 60 and older. For several years now Venadar has observed emerging companies innovating products to enable a higher quality of life for aging adults. The rationalism is that seniors will be more active by addressing everything from mobility, nutrition, safety, home environment and social aspects. Move over Clapper and Life Call, CES 2017 boasts the following, many of whom are addressing the needs of older adults:

  • Health & Biotech – 510 exhibitors
  • Wearables – 881 exhibitors
  • Smart home/Appliances – 1108 listings
  • Personal Privacy and Cyber Security – 108 exhibitors
  • Robotics – includes 341 exhibitors

Asset light – To be a manufacturer, you don’t need machines, or HR, or an office… or employees for that matter. Companies that employ nobody, yet the owner soars – however, some worry it won’t help job growth.

What other things did I find scribbled in my notes that clients and prospects talked about…?

2016 Driveway moment – Favorite story on Marketplace:

Cottage cheese wants to be the new Greek yogurt

Ellen Byron was interviewed about her article “Could Cottage Cheese Ever Be Cool?” wherein cottage cheese manufacturers are hoping that new flavors like cucumber & dill, or maple & vanilla, as well as lower sugar and high protein will bring cottage cheese the same level of attention as Greek yogurt.

Several years ago, we recommended that a client invest in Greek yogurt.  We observed an emerging trend of high in protein, on-the-go snacks and meal replacements, etc.  As of 2014, Greek yogurt  accounted for over 50% of the U.S. yogurt market, compared to about 4 percent in 2008. Our client passed on the opportunity, and has since told us they regretted the decision, never wanting to be “greeked” again.

Based on our work, we know entrepreneurs are typically 3-5 years ahead of major corporations in addressing new market opportunities. If you are only seeing the things investment bankers and VCs are shopping around, are you really seeing the right things? The best things?

What are we anticipating? Folks here at the office are looking forward to helping our current and future clients create venturing arms and connect with the entrepreneurial community, as well as the next season of Stranger Things, Luke Cage and Better Call Saul…

Let’s Be Friends – Relationship Advice from Venadar’s Mark Kaiser

uhohspoonIn my years of initiating relationships and negotiations with big companies and emerging companies, I’ve seen some incredible results from these partnerships. I am struck and sometimes amused, though, by stories entrepreneurs have told me about being approached by big companies, and by how big companies are often surprised by what entrepreneurs ask and do.  I‘d like to share some of my favorite anecdotes as a way to help both big companies and entrepreneurs have successful encounters.

Three’s… er, Seventeen’s a Crowd

As a favor, I was asked to tag along on a dinner a Fortune 500 company scheduled with a successful entrepreneur to discuss the potential for a partnership.  The dinner was hosted at the Ritz Carlton, and when I arrived I found that I wasn’t the only person invited – 17 people from the big company were also asked to “tag along”.  You can imagine how intimate a conversation of 17 on 1 felt.  Here are a couple of suggestions for the next meeting: 1) keep it small and don’t overwhelm the small company; and 2) choose a venue that is appropriate for someone who is trying to make payroll.  Entrepreneurs already think big companies have unlimited funds, so picking up the tab for 18 people at a Ritz Carlton for dinner only proves they are right!

#I’mGoingToDisneyland!

After they scheduled a first meeting and met with an entrepreneur, another client called me to complain that the entrepreneur posted on Facebook and Twitter he just met with “ABC Corporation” and they agreed to do a deal together.  A lot of entrepreneurs are into shameless promotion because “buzz” is important.  That doesn’t excuse the behavior, but care should be taken to not say or do anything that you wouldn’t want broadcast far and wide before a confidentiality agreement is in place.  Until the NDA, nothing is “off the record”.  Talking out of school or sharing confidential information (whether an NDA has been signed or not) is not a good way to advance your cause if you have any genuine interest in working with a particular big company.

Practical Advice for Entrepreneurs and Big Companies

I could go on and on… but here is some practical advice for both big company folks and entrepreneurs:

Big company: Entrepreneurs have a love/hate relationship with you. On one hand, they admire what you have accomplished and would like to be a billion dollar company just like you – on the other, they fear you will “steal” their ideas.  Start with a “low risk” conversation about how you may be able to support the entrepreneur, and, if available, point to your track record of working well with partnering and investing in start-ups.

Big Company: Hard to believe, but It’s usually not about the Benjamins. While some entrepreneurs desire access to capital under reasonable terms, more often they are interested in access to your distribution/customers to grow their revenue. With some exceptions, they don’t necessarily want “help” with their supply chain, HR, your purchasing power, or advice on how to run their business.  Listen and offer to help with things the entrepreneur really might value.  You are starting a business friendship.  Be a friend.  You are not in a purchasing transaction.

Entrepreneurs: If I’ve said it once, I’ll say is a thousand times, avoid exaggeration like the plague.  Whether you have 23 customers or 12, you are still a small business.  Ditto for 43 employees or 27.   If the demo is just a prototype, say so.  The truth is always better than something you make up.  You might be surprised as the big company might just be able to help you with your real problems, not the ones a vaporware story might imply.

Big company: Entrepreneurs work in real-time.  Set realistic expectations and if things are going to move slowly, tell the entrepreneur why.  One deal we were working on recently needed the approval of the CMO.  He was on a three-week vacation and doesn’t work when he is on vacation.  It would have been better to say that upfront than “go dark” for four or five weeks, which is a lifetime for an entrepreneur.  To an entrepreneur, a vacation is special and to not work when away is unheard of.  Going dark for more than 24-48 hours without giving advance notice may cost you a relationship.

Entrepreneurs:  Don’t be afraid if a representative of a big company gets in touch.  Be guarded, but it’s probably a good thing.  And at first, don’t tell anyone anything you are uncomfortable sharing.  My rule of thumb is don’t share anything you wouldn’t share with a good, well-qualified customer or prospect in a sales call.  A confidentiality agreement is just like a fishing license, but a fishing license doesn’t guarantee you will catch a fish.  It protects confidential information that is shared, but it doesn’t require you to share any information at all.  It is okay to say “I am not comfortable sharing that information at this time” or “before I answer, I am curious why you are interested”.

Proverbial Win-Win

Keep in mind there are many dialects in almost every modern language – in business partnerships, there is the dialect of the big company and the dialect of the entrepreneur.  Listen and learn how to understand what each other is saying (I still have a hard time understanding someone from the Bronx, or Alabama), it’s the key to starting a new friendship with someone who might help you create the next billion dollar business.