While a bold idea, unflagging determination and patient financial backers are all crucial to successful start-ups, entrepreneurs must also focus on less dramatic aspects of running a company, according to seasoned entrepreneurs who spoke at the 8th Annual Wharton Entrepreneurship Conference.
This means paying attention to investment relationships, exit strategies and the mechanics of building a business, including hiring and firing, marketing and distribution, said Jeffrey A. Citron, co-founder and chief executive of Vonage Holdings, David Morgan, founder of Real Media and currently chief executive of TACODA, and Josh Kopelman, founder of Infonautics and Half.com.
Citron, whose Vonage Holdings is an Internet-based telecommunications firm, led off the conference with a call to go bold. When looking for start-up opportunities, Citron said he targets businesses that revolve around disruptive technologies that will shake up big, preferably global, markets with huge entrenched players. He looks for businesses with products that make a major change in a large number of lives.
"If it's not going to improve peoples' lives significantly, we are going down the wrong path," said Citron, who founded the computerized trading system, The Island ECN, and online brokerage Datek Online Holdings before turning his attention in 1999 to Vonage.
Citron said he is not concerned about bringing a new technology to markets dominated by big, established competitors. "They are stodgy, slow-moving players who are asleep at the helm. Even if they see it coming, they don't know [how to react]. All they can do is steer straight ahead." Citron stressed that he also looks for businesses with a strong revenue stream that will transform the current value proposition in a business for customers, and fundamentally change an industry's cost structure.
Innovation, he added, is crucial. "You can change the value proposition, but the day you talk about it, or the day you release it, is the day your competitor copies it," he said.
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