Our next destination with GSMA Mobile World Congress takes us to the global tech startup hub – Silicon Valley! As you can probably tell, we are super excited and cannot wait to tread in the footsteps of all the mighty entrepreneurs that reside in that part of the world and have blessed our daily devices with the technology that we have and use continuously today.
May I take this opportunity to introduce to you all, Michael Fox, our investor relations leader for our first edition of 4YFN at Mobile World Congress Americas. Michael is a senior strategist and a consummate networker, who has built a world class circle of influence in the startup and venture community, corporate partners and service providers.
Currently, in addition to teaching entrepreneurship at an MBA programme in Design Strategy, he is a Venture Mentor for MIT CNC and formerly was the Silicon Valley Emissary for London-based Global Corporate Venturing which supports the global corporate venture capital community.
So, as you may have guessed, with his huge wealth of knowledge and experience within the startup scene, we wanted to meet him and ask a few questions…
Over to you Michael…
We will be heading to 4YFN at Mobile World Congress Americas for the 1st time this year, can you give us your opinion on the different ecosystems across the US and what our international startups and delegation can expect from being right bang in the middle of the tech startup epicentre of the world – Silicon Valley?
Each ecosystem, by definition is unique. It’s a function of creativity, talent, market insight, ability to execute and capitalisation. Obviously, Silicon Valley and San Francisco has a unique chemistry that has flourished now leveraging innovation, appetite for risk, talent and capital like no other place in the world. Understanding how to navigate, build a network and establish relationship equity takes time and clear understanding of the market nuances that are unique to Silicon Valley. That said, Silicon Valley, like any ecosystem is far from perfect. In part because of the pace of innovation, many innovators can suffer from a certain type of “Silicon Valley myopia.” When looking at the international landscape, it’s sometimes easy to forget how important market knowledge and localisation play a role in one’s ability to “extend reach.”
As the lead for investor relations at 4YFN Americas 2017, we hear that you were involved in major innovation projects in the American IT sector, therefore can you tell us a bit about your experience within that context?
If one looks at the “triangle of value” between innovation, corporate and capital, I sit in somewhat of a unique position having operational experience with each sector. In addition to having the pleasure of working with many startups in the mobile space, I was also an Entrepreneur In Residence for a $5B fund focused on building valuation, I also worked on the corporate side, having helped to launch the VAIO for SONY and as a senior advisor to the President’s Office for Mitsubishi. Most recently, I was the Silicon Valley Emissary for Global Corporate Venturing. In this context, understanding the unique convergence in the mobile space as it relates to market adoption, strategic corporate partnerships, customers and capitalisation, is critical to hitting the target.
If, for example, you are developing an innovative mobile fintech solution and you fail to recognise that 70% of the world doesn’t have a relationship with a bank, 40% of which are smartphone users and that 90% of Asia (half the world’s population) is using Android, the likelihood you lock into an effective product market fit is virtually nil.
We understand that you will be speaking at the welcome session and will be offering tips to startups on how to approach investors. If you had to give 3 pieces of advice to our audience now, what would it be?
I have seen in many startups, both here in Silicon Valley and across the world, there are three areas where many efforts consistently miss the mark. Even if you have the most disruptive innovation, if you’re not on target, the value is, by definition, stranded.
The first inflection point is understanding your audience and the role of empathy. This is critical. Many efforts fail because they don’t understand how to engage with the customer, strategic partner or institutional investor. Think about who you’re engaging with; it’s not about you, it’s about them. What motivates them? What’s on their radar and most importantly, what’s their pain point?
The second point is the value of applied critical thinking and strategic insight. It’s imperative to have a clear objective, understanding both the food chain in your ecosystem, together with a clear understanding of the market dynamics and landscape.
Lastly, mastering the story arc and effective communication are critical. Messaging and one’s ability to identify and articulate both value and differentiation are perhaps one of the most important elements in winning the support of the investment community.
In your experience, what do you think investors are looking for at this years’ 4YFN startup event? Can you advise on the type of tech that is hot right now?
First, it’s important to note that institutional investors are not all the same. Some smaller funds may prefer early seed and post seed stage while larger funds spend more of their time in later stage investments. It’s critical to “know your investor” and what interests them. Domains that many seem to be focusing on include Fintech, Blockchain, IoT or AI. It depends on the core interests of the fund. That said, with any institutional investment, key fundamentals they look for include differentiation and defensibility, sustainable value and virtually all look for customers and validation.
What should a European investor know or consider when investing in an American startup? Are there any specific advantages? Is there anything else that you think investors from outside the US should know about America’s startup ecosystem?
Institutional investing overseas is a tricky one for so many reasons including legal and tax issues. Many find value in syndication for local support, knowledge and investment supervision.
In any effective partnership or investment syndicate, the key is establishing common objectives and goals. Without a common vision and agenda even within a syndicate, it’s an imminent train wreck. It’s important to note the single most important element any investor is looking at is the team.
What should a European startup consider when approaching an American investor?
Many investors have different interests and agendas. It’s important to understand who you’re dealing with. Do your homework beforehand. Know their history, what’s their domain focus and knowledge base? What does their pedigree of investing look like and what have they invested in? Is there potential synergy with their portfolio? Don’t be afraid to reach out to portfolio companies and ask their thoughts on what it’s like to work with them. Know who you will be working with.
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