What’s your value proposition? It’s a question I hear often and one I love to answer. After all, it’s also the cornerstone of everything which drives our business vision here at Starttech Ventures.
Yes, yes, but what is it, I hear you say? Well, put simply, our value proposition is all about high capital efficiency and low capital loss ratio. These are the markers by which we live. We aim to meet these qualities at every step of the entrepreneurship journeys of founders who work on B2B software solutions which primarily target the North American market and secondarily Northern/Western Europe.
In this post I’ll elaborate a bit further on the specific kind of B2B software solutions we invest in, and plan to continue investing in, in the future. That is, and will be, our market segment.
Business model before product, even when selecting your market segment
Essentially, we want to invest in the next 50 Salesforce.com’s of this world. Or perhaps, to put this into better context, the next 50 TalentLMS’s and Yodeck’s of this world. Two shining examples of our portfolio businesses which are growing and scaling up exceptionally well. And companies which put their business model before their product.
Enterprise software has been out there for decades. Functionality-wise it continues to perform miracles. Incredible amounts of intellectual firepower has been deployed for creating sophisticated business logic which basically more or less runs our world.
The software is what fuels the information revolution. It would be fair to say that software is the primary weaponry of the entrepreneurship revolution too. Few successful businesses, if any, can run without proper business software.
Starttech2 and bridging the gap
There still is, however, a significant gap. And wherever you can find a void, you can always find an opportunity . And, we are exploring such an opportunity with Starttech2, a new fund which we are raising.
Good software is generally still expensive. Expensive to buy, expensive to customize, expensive to deploy, expensive to run. This reality defines the opportunity we shall explore.
With this in mind, only large organizations can actually afford good software; small and medium sized ones suffer from using mediocre software solutions.
So, the core of our target market are businesses which try to do the following:
Lean software solutions offered as a service at a cost which are affordable by small and medium enterprises, but which still offer functionality similar to the ones larger companies enjoy from heavyweight solutions.
There’s also another very interesting angle of the same reality:
The internet keeps changing the economy. We’ve entered the stage where the removal of geographical barriers and limitations is a reality also for small and medium-sized businesses.
Factoring in all of the above, should help us roughly outline our market segment. But wait, there’s more!
Ultra-specialization – an exciting new reality
This new exciting reality is actually transforming the small and medium-sized businesses themselves. How? So far they had to be generalists in order to succeed in their local market. Now, business success will come from excelling in a specific niche, out of specialization in a global market.
But this specialization, which is often ultra-specialization, by nature makes the use of more sophisticated software a necessity. A wide necessity which drives the insane success of the Salesforce.com’s and xero.com’s of this world!
In short, lean enterprise software solutions, such as TalentLMS, are not only are becoming affordable and accessible for “smaller” businesses. On top of this, they are becoming available exactly the moment when those customers need these solutions.
Reality is a great filter. If nothing else, it has helped us better define our market segment, and boldly go for it.
Things can not get much better. Or can they?
I remember a discussion during a networking dinner in San Francisco last November, where someone was asking whether all available software solutions have already been developed. My response to this opinion is clear.
Just a very small fraction of the lean software solutions which the vast market of small and medium-sized business need exist. And generally, there is significant room for improvement among the solutions already in the market.
Eye on the (B2B) future
Myself and our team at Starttech Ventures firmly believes that during the next 15 to 20 years the market shall witness thousands of success stories of lean enterprise software solutions. All of which will thrive in the marketplace helping small and medium-sized enterprises to compete for success in the international marketplace.
We know it’s going to be thousands, and we aim to be the co-pilots in the journey of at least 50 of them. So, if you feel like joining the ride, just drop us a line and let us know!