When I first saw Steve Job’s quote, then Josh Porter’s (Bokardo) re-quote in www.bokardo.com and then Bijan Sabet’s repost, I nearly choked on my Wheaties and thought, damn, another sound bite that everyone’s going to analyze and memorialize. The next sound bite that passes over Steve Jobs lips might as well be “We don’t write code. It is divined by a higher being.”
My thoughts: Someone’s got to research the competition (to demonstrate to the VC that the potential portfolio company has a handle on the market and has something that goes beyond table stakes), understand who the market is (so that the VCs know the solution caters to the right market), size the market (so that VCs might also understand the potential of the investment) and on and on.
The most optimistic scenario for both the startup and a VC is that the startup is capable of doing of doing analysis and they have completed it - because you (a VC) are going to ask. You (a VC) might be wowed by the solution in the first meeting, think about it for a bit, and then come back around with more formal questions. Whatever the process is, you (a VC) is going to need the data to make an investment decision. The startup might have someone in that role - analyzing that data – or alternatively, they’ve got enough bullets to satisfy your initial requirements.
Most of the time, I find that there are undiscovered opportunities that the startup hasn’t considered – primarily because they’re heads down writing code or executing their initial plan – which in many cases, can’t get them a meeting with the VC in the first place. Sometimes, they’re entire misses or Phase II ideas. Whatever the case, the consultant serves as an adjunct to the start team.
The long and the short of it is:
1. Not every startup is firing on all cylinders (yet.)
2. The best entrepreneurs (including VCs) know one thing: They don’t know everything.
3. The right consultant will increase a startup’s odds of success – either as a coach, sounding board, market sizing, validation, market maker.
(Sorry Josh for the initial typo)
