Egg-laying and milk-giving wool-pig

Idioms don’t always translate well across different languages and cultures, but I thought this particular German phrase was a visceral and compelling image as a warning to early-stage companies not to be “all things to all people.”

Eierlegendes und milchgebendes Wollschwein, literally egg-laying and milk-giving wool-pig (sometimes shortened to eierlegende Wollmilchsau), was a phrase I first heard on a phone call with a German company a couple of years back; it was repeated recently, prompting me to write this short blog.

While it sounds great to have a multi-functional animal which provides you with all your nutritional and clothing needs, it will not be a surprise that this is used pejoratively. It describes the familiar cynicism around things that sound too good to be true and claim to be capable of dramatic improvements across a whole host of different parameters.

So how does this apply to the commercialisation of emerging technologies? Generally speaking, for early-stage companies – and especially for platform technologies with broad applicability – it is critical to develop and prove a focused value proposition with a clearly defined benefit to the end user or partner with whom you are engaging. There is often a temptation to develop a long list of all the things your technology does and is a solution for; this is in the hope that it makes your proposition seem more attractive or widens your potential audience. However, what often happens is the message becomes muddied and the proposition less compelling.

As soon as you profess a fantastical ability to do many things effectively, you risk losing credibility and diluting your message, even though there may be validity to those declarations. Remember that extraordinary claims require extraordinary evidence.

Don’t be an egg-laying and milk-giving wool-pig.

Getting fit for fundraising

A recent blog by Fred Wilson resonated with me and motivated me to write my next blog. In his blog, Fred reflects on the decision by WeWork to postpone their listing and uses the term “hair on a deal” to describe when a deal has too many issues which ultimately kill the investment. The critical lesson for entrepreneurs he highlights is the importance of having your house in order before starting to raise capital.

At Rapid Innovation Group, we believe that companies need to be “investor ready” and fit to raise. The analogy that I used recently with a company was that if an inactive and overweight 40 something year old (guilty) declared that they were heading straight to the track to run a 5-minute mile this would be viewed incredulously. Why? Well, obviously, they are totally unprepared both physically and mentally to be successful. How could they achieve this goal? However, if the person said that they were starting on an 12 month programme with this as the end goal and that they were hiring a personal trainer with a background in track and field, a nutritionist, physiotherapist and a sports psychologist to help them achieve this goal, then you might view their declaration as viable. If this was further backed up by a plan divided into clear blocks with defined milestones which involved shedding excess weight, building the body strength required for the distance, and fine tuning their technique,  then you would start to believe further and might even contribute to their GoFundMepage.

 

Similarly, companies need to get fit before attempting to engage investors. We have developed an audit tool to help companies understand their investor readiness and to identify the gaps that need closing before beginning a fundraising process. This invariably requires the investment of time to bottom out the gaps. The amount of time required is a function of how much fitness work needs to be undertaken.

But as we all know, early stage companies tend not to have time on their side particularly when it comes to fundraising. So, you need to begin this process well in advance of starting your next fundraising.  You need to assess how far away from readiness you are and what you need to do to close the distance. You need to make sure that you have enough runaway to enable you to execute these tasks (remember running out of money is not a reason to support a raise). You also need to know what investors will expect at your stage and how much hair they can stomach. The key here is to begin your investor training/preparedness in sufficient time before you need to raise. This will make the period from investor engagement to deal closure run as efficiently and effectively as possible. Although this is no guarantee of success, it puts you in the optimum shape. As Abe Lincoln once said “give me six hours to chop down a tree and I will take four to sharpen the axe”.

First week at my RIG internship

After reading these intern blogs singing RIG’s praises on the website myself, my first week at RIG has luckily completely lived up to expectations. It’s been full-on in the best way possible, in a blur of learning about everything from how 3D printing is used for gas turbine parts, to how to take meeting notes and research potential clients,  to how to set up a laptop and even (importantly) being taught how to use a cafetière for the first time.

The team at RIG are all immensely hardworking and have a breadth of knowledge about their clients, despite being ‘generalists’ who become specialised in a certain field very quickly. They are also funny, welcoming and friendly, and happy to offer advice and show how they do things, with James and Ellie inviting me to see them make a client call an hour into my first day. And they treat their interns well; even though it’s my first week, I’ve apparently been given the nicest laptop in the office!

On the first day I was also given information about two companies I would be working with, both very different and exciting. The first is an alloy-making company that makes parts for a variety of companies, and the second is a company with water-purifying technology that seems to have a huge potential for transforming a variety of markets, from agriculture to the swimming pool industry. I spent time reading about what these companies do, which was really interesting but meant that I needed to learn a lot of definitions! By the second day, I was reading a business plan, learning still more jargon, and was taken by Simon into a client meeting with the water-purifying company, where I learnt still more technical words and figures.

Since then I have been doing market validation, researching potential clients for the first company and looking at the size of the market in different countries for the other. Although this week has had the potential to be overwhelming, the warmth and helpfulness of everyone in the office has meant that it’s been really exciting, and I can’t wait for more time at RIG!