Contributed by Rich Kreisman, Principal Partner, Kreisman Information Consulting, San Francisco.
Sharing wisdom to a group of info industry pros can be a tricky thing – we’re a tough crowd – but that’s exactly what Michael Chen, Former President of NBC News’ Strategic Initiatives Group, and, Founder of NBCUniversal’s Peacock Equity Fund, did to kick off SIIA’s 2012 Information Industry Summit.
Highpoints of Chen’s advice, looking at the world from an information industry investor’s viewpoint:
#5 – See the Future
To win in a confusing and competitive information market, we all need to be futurists. “And, hopefully, you will see the future before everyone else gets into the markets,” Chen said. Citing a range of stats, including tablet sales moving rapidly from 10% of the mobile market to 19% of the market because of greater-than-expected Christmas 2011, he discussed many of the key platform changes anticipated to impact content providers in the future – more smartphones, more Internet-connected TVs and more mobile e-commerce transactions.
#4 – Have a Simple Communications/Public Relations Strategy
Like all of us, investors are busy… very busy, as many of us know who have tried to raise money. Chen’s advice: “In 1 minute or less, you need to describe your product or service, why customers would buy it, what is your ‘edge’, and why is it sustainable.”
Investors like to be able to easily explain their investments, says Chen – to their business colleagues, their personal friends and their families. In order to do so, simplicity and directness is key.
#3 – Do Not Just Be an Innovator; Show Investors You are an Entrepreneur
Chen, who has seen his share of pitches from prospective companies, made this observation: “Innovators create new ideas; entrepreneurs commercialize them and make money”.
In other words, being an entrepreneur involves a lot more than just having a good idea. I saw a lot of heads nodding on that point. Many people in the room must have worked at great startups that lived – and died – on their founding team’s execution abilities.
#2 – Understand the Language of your Investor… Finance
Fascinating to hear Chen tell a room of publishers to listen and learn the language of their audience. Investors are not interested in just hearing the CFO talk about finances, for example, Chen said. They want to have confidence that the entire management team understands where and how money will be spent. Other good points:
- Do not build hockey stick financial plans to present at investment pitches
- Have a reasonable base case plan and also a downside case
- Show frugal management of costs and overhead in the existing business
- Have an exit strategy plan that you can explain from the start
#1 – Investors Invest in People
Chen spent the most time discussing this point. Simply put, he says, investors will not invest in people they do not have chemistry with. While chemistry is elusive, it can be created by being prepared ahead of investment meetings and understanding an investor’s key drivers.
Chen concluded with an important notion: “Your reputation will precede yourself, making it important to build a personal brand along the way.” How to do that? Throughout your business dealings, focus on the 4 “I’s” – integrity, inclusion, impact and inspiration!
Rich Kreisman is the Principal Partner in Kreisman Information Consulting (KIC), a San Francisco-based consultancy advising publishers on content licensing and distribution strategies.