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Roeder-Johnson Corporation 1301 Shoreway Road, Suite 322 Belmont, Ca 94002-4106 USA +1 (650) 802-1850 Fax: +1 (650) 593-5515 www.roeder-johnson.com |
BELMONT, CA – JANUARY 24, 2006 – Unique technology is still important or crucial to the success of start-up companies, said a key group of venture capitalists, entrepreneurs, journalists and analysts in a survey conducted recently. 91% of the respondents answered the question "Do you believe that unique technology is crucial to the success of start-up companies today?" with "frequently" (39%), "usually" (39%) or "always" (13%).
"I was both surprised and highly encouraged by this unexpected result," said Abigail R. Johnson, president and co-founder of Roeder-Johnson Corporation (Belmont, CA), who conducted the survey. "We have numerous contacts and friends in the venture capital community, and the vibe for some time has seemed to be that unique technology is an 'ugly stepchild' that you need to hide or barely mention for fear of scaring off investors or customers."
Johnson's firm, like the venture capitalists who have sent a constant stream of their portfolio companies to her door over the years, is constantly being "pitched" by entrepreneurs seeking to rise above the noise level. "For most of the last two decades," Johnson explained, "Start-ups would lead with their technology, and it was always a cornerstone of their business plan. But in recent years, technology enthusiasm has been missing." Johnson believes that many entrepreneurs have become — or felt they needed to present themselves — as "incrementalists" rather than evangelists.
Part of the problem is that the venture capital community became extremely conservative after the bubble burst, Johnson believes. "They became gun shy of deals that had either technology risk or market risk," she said. "That attitude, in turn influenced the entrepreneurs, who quickly learned how to preach to this particular choir." The result, she said, has been a several-year stream of new ventures that have conspicuously defined themselves and their core competence along lines other than unique technology.
"I woke up one day several months ago, and wondered, 'Is technology dead in start-up companies?' We had to know."
Johnson's firm developed a small, to-the-point email survey and contacted over 70 key members of the venture capital community, entrepreneurs, journalists, and analysts. "We've launched over 75 high-technology start-ups over the years, so we have developed some very good relationships," she said.
The survey's key question was "Is unique technology crucial to the success of start-up companies today?" This was followed by five additional questions about "if technology matters, why?"
"Within minutes of hitting the 'send' button, we started getting responses back, many expressing an interest in both the question and the results. In addition, virtually everyone had comments to add, so we received some rich qualitative data as well." In the end, 80% of the people contacted weighed in with their opinions, 50% of whom were venture capitalists. The bottom line: 91% of respondents felt that unique technology was still important to start-up companies. The highest reasons listed were "for competitive advantage (93%) and "market differentiation" (93%). Other key reasons: "to support the investment decision" (86%) and "to attract suitors" (81%). In each case, the percentages represent those who responded in the highest three categories, ranked from 1 ("low importance") to 5 ("high importance").
The survey results, including a discussion of the methodology, can be found at http://www.roeder-johnson.com/RJDocs/RJTechnologySurvey2006.pdf. A chart summarizing the results can be found at http://www.roeder-johnson.com/RJDocs/RJTechnologySurvey2006Chart.jpg.
Although Johnson was gratified at the response, and heartened by the results, she cautions entrepreneurs that in today's world, a clearly-defined and articulated market and market strategy, and un-relenting attention to a well-thought-out execution plan are particularly crucial. One respondent, a venture capitalist, wrote: "Relatively speaking, unique technology is less important now than five years ago. Today, companies appear to be valued on their market success (as evidenced by customers and revenue) rather than purely on 'game changing' technology." Another, a repeat entrepreneur, volunteered: "The value of unique technology is based on what the company is trying to do. It's all about fulfilling the customer need which can be done with technology, service, packaging, or existing technology.... All are valid ideas for company creation....Dell is quite successful without unique technology and there are many others."
Johnson concluded, "Overall, we believe that this survey reminds entrepreneurs — and the ecosystem that supports start-up companies — that they must not lose focus on their core assets — of which unique technology is key — even if they are being asked more than ever to think beyond 'a better mousetrap'."
Roeder-Johnson Corporation is a unique, highly-focused Public Relations and Strategic Communications firm in Belmont, California that works with technology innovators — particularly start-up companies — that are committed to building a unique, defensible, and durable position of leadership. Roeder-Johnson clients have in common significant, newsworthy technologies and business strategies of continuing interest to the members of the press and the financial community.
Since its founding in 1989, Roeder-Johnson has positioned, launched, and provided ongoing public relations representation for over 75 high technology start-ups. Among the varied companies Roeder-Johnson or its principals have helped shape include Canesta, Echelon, Electronic Arts, Excite, Genoa (acquired by Finisar), Linear Technology, MMC Networks (acquired by AMCC), NetDynamics (acquired by Sun Microsystems), Onset Ventures, PolyFuel, Redpoint Ventures, Xros (acquired by Nortel), and many others. The firm is known for its ability to unearth the high concept, craft durable positioning that remains consistent as the client grows, and carry the story to a wide community of interest through tightly-integrated public relations execution.