rsedmak

In the last few years, I’ve had the opportunity to be involved with a number of enterprise software companies in an advisory role.  As an advisor, I usually end up jealous of the leadership team, as they get to go through the process of finding product/market fit – talking with potential customers to make sure that all market assumptions are tested.  This process, to me, is one of the most fun experiences in all of business.  Not only do they get to learn a ton about the industry they are trying to serve, but they get to build relationships, and are usually the first to know when the team is ‘on to something’.

What surprises me is how many startups completely bypass this process, almost always to their own detriment.  In these cases, not only is the startup just floating by on a set of best guesses, but they are also missing the chance to read ‘between the lines’ to find real, untapped opportunities to deliver value to customers.  In fact, these companies have no chance at what I think is the best possible situation for a B2B startup to be in: knowing the customer’s business better than they do.

Achieving this means having a good conceptual model of what the future holds for that industry.  These types of situations really get me excited.  Investors talk about looking for durable competitive advantage in their portfolio company prospects. This type of thought leadership paired with helping customers anticipate changes in their industry is probably one of the best durable competitive advantages there is.

[Photo: flickr/pedrosimoes7]