Incumbent and Insurgent: Adding Value Together

TechStars

Today, global energy corporation Equinor and startup Crux OCM are working together to test Crux OCM’s software, which functions as an “autopilot” for oil and gas control room operators.

The Future of Corporate Venture Capital

500

Conventional wisdom dictated that incumbents should focus their innovation efforts on R&D and growing their cash cows while investing in a few startups. The following is an excerpt from 500’s CVC report. How has corporate venture capital changed? In the decade since the Great Recession, we have seen digital upstarts – taking advantage of disruptive technologies from AI to IoT – reshape the economy and the corporate pecking order.

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Understanding How The Innovator’s Dilemma Affects You

Both Sides of the Table

The thesis of the book is that incumbents in markets – especially large and well entrenched markets – seldom survive fundamental technology changes in their industries. It should affect how you think if you are an incumbent but also if you’re a startup.

The Market Diversifies: International Innovation Captures Larger Share Of Startup Funding Applications

Gust

Quarterly data from Gust, the online platform for the global angel investment industry, reveals that while incumbent leaders show no sign of slowing down, new industries and areas Read more >.

How Our Journey with Snowflake Began

Tomasz Tunguz

Here was a plucky group of founders with deep technical expertise seeking to take on the incumbents with a novel architecture. The debate about partnering with Snowflake went back and forth during the investment committee meeting. It was March 2014.

The Future of Hospitality is Here

Revolution

and by substantial amounts of invested capital in formal amenities required by incumbent brands that are frequently cost centers rather than profit centers (lobby restaurant, room service, etc.). Image courtesy of Mint House Real estate lies at the core of our everyday lives?—?it

The Uber that Never Was

This is going to be BIG.

Using the proliferation of newly GPS-enabled mobile devices to enable taxi hailing and beat out stagnant incumbent providers was always going to be a big win for consumers. It provided a better service than existing cabs were going to be able to do for at least several years—cutting out lots of unnecessary overhead in the system. Had it been built differently, it could have been a better company and honestly I’d like to believe maybe even a more valuable one in the long term.

5 Predictions for 2020

Tomasz Tunguz

And incumbents desire as much of that as possible for themselves. Startups begin to siphon off important but underserved segments of SaaS incumbent's customer bases. Here are my 5 predictions for 2020. The direct listing becomes the standard way for startups to go public in 2020. The idea has been proven by Slack and Spotify, and many others will follow. Most startups at IPO have plenty of cash and don't need to raise more in the public markets.

What To Do When Your Competitor Gets Funded?

Both Sides of the Table

And our competitors are not really each other but the incumbent businesses that have 99.9% ” In summary: The competitors are the incumbents. This morning Clutter.io announced they raised $9 million from Sequoia , arguably the best venture capital firm that exists. Congratulations. Sincerely. Conventional wisdom says I shouldn’t tell you this because I invested in their main competitor, MakeSpace.

How to Predict the Future (Don’t)

Jason Calacanis

They have studied their market, talking to customers and doing competitive intelligence on incumbents. Nobody can predict the future. Everybody can tell you what’s possible. The art is in knowing what’s probable.

How to Decrease the Odds That Your Startup Fails

Both Sides of the Table

So when Sam Rosen came to me with the idea of disrupting storage with a product that is priced cheaper than existing incumbents and he could build a product that is a better service I was intrigued. dominated by a few very large incumbents who control much of the distribution or are you going into a market that is “fragmented” where nobody controls the industry. Incumbent Strengths & Weaknesses. Many startup businesses – tech or otherwise – fail.

Capturing Luck with “or” instead of “and”

A Smart Bear

Can you compete in a niche where incumbents don’t care or cannot move quickly? I won a fake stock market competition in elementary school.

Which Categories of Seed Startups are Thriving? Which Aren't?

Tomasz Tunguz

FinTech - challenger banks, new electronic stock brokers, AI-powered investment advisors; startups are besieging the incumbents of this regulated world and assailing them in ever greater numbers. Which sectors see more startup company formation than others?

A Startup’s Guide to Maximizing Last Mover Advantage

Tomasz Tunguz

It’s the company that pursues an incumbent with faster, better or cheaper solution and in particular a solution that cannibalizes the incumbent’s business model typically because of a lower cost structure.

Should Your Startup Differentiate On Pricing?

Tomasz Tunguz

There are spaces where pricing innovation is welcome, especially when there is a large, expensive incumbent. Startups are innovation machines. They identify market opportunities, develop novel products and go out to change the world.

1% of Salesforce's Revenue Makes a Unicorn

Tomasz Tunguz

We have reached a point in SaaS where a small fraction of an incumbent is a billion-dollar company. the industry has been looking for ways to compete with some of these incumbents for a long time. I suspect old-fashioned product marketing may be the disruptive force to prise $1 billion worth of market away from some of these incumbents. Salesforce is worth $113 billion. 1% of $113 billion is $1.13 billion. ServiceNow is worth $34B and Workday is worth $33B.

The Truth About the Scooter Economy?—?An Insider’s Perspective

Both Sides of the Table

You can’t simply drop a bunch of electric scooters in a market and hope to compete with the data and software advantages of the incumbents. The Truth About the Scooter Economy?—?An

Opportunity Amid Volatility

Haystack

They’ll have to back up the truck for their best companies, take acquisitions off the table, and go right after the incumbents head-on. Speaking of acquisitions — many leaders of larger VC funds have privately given up on the incumbents buying their companies. Instead, they would prefer to back their winners to take on the incumbents head-on — hence, we have larger funds and longer hold periods to get liquidity. It’s an unusual time in the markets.

MakeSpace Raises an Additional $17.5 million and Unveils Strategy to Make Public Storage the Next Blockbuster Video

Both Sides of the Table

Incumbents became increasingly annoyed with our successes in the country’s largest market – NYC – that they started even taking out ads against us. It’s no wonder incumbents don’t want us to exist.

The AI Agency - A Novel GTM for Machine Learning SaaS Startups

Tomasz Tunguz

Finding scant market demand from the incumbents whose owners prefer status quo, these startups start their own agency. In 2015, I wrote about the trade-off facing vertical SaaS companies. Vertical SaaS companies focus their efforts on a particular group of customers. Procore targets construction with their software and Veeva targets pharmaceuticals with their CRM. This concentration limits the market size, but improves product market fit.

Mapping The Haystack Portfolio Across The United States

Haystack

Hello. It has been a while since I’ve posted here, nearly 3 months. My fingers are well-rested, but my writing prowess is likely rusty, so please forgive any rustiness in this post. I do plan to write a lot more this summer, so stay tuned.

Facebook and Speech: It’s All About Power

Continuations

This has massively reduced the power of incumbent banks, allowing for rapid innovation in the banking and payments sector. Here we are again in 2019 debating speech online and specifically the case of Facebook. Zuckerberg speaks at Georgetown trying to invoke the civil rights movement and to draw a sharp distinction to China. Warren quickly fires back on Twitter. Pundits everywhere weigh in. And yet hardly anyone gets to the heart of the matter: power.

[The Bouqs in Tech Crunch] With $30 million in fresh funds, The Bouqs plans to plant its flower delivery business in Japan

OurCrowd

it will now have to take on incumbents like Ayoma Flower Market and FloraJapan, both of which also offer same-day delivery throughout the land of the rising sun. The Bouqs plans to take a slice of Japan’s $6 billion flower market this year with a $30 million strategic growth round from Japanese enterprise business investor Yamasa. While The Bouqs still must compete with bigger contenders like 1-800-Flowers and FTD in the U.S.,

How I Invest

Both Sides of the Table

I love businesses that aim to massively reduce the costs of products or services in a way that makes a product or service vastly more accessibility and in which incumbents would have a hard time competing. I was speaking recently to the team at NuOrder , an LA-based company we’re an investor in about “realism in startups” — an impromptu talk I have given to any of our portfolio companies who ask.

Why I Backed a 24-Year-Old Trying to Assess Human Potential

Both Sides of the Table

Incumbents launch products, VCs throw cash at other competitors, team members quit, the economy dips — whatever.

The Breakout Tech Company Of 2018

Haystack

Airtable isn’t the only company in this collaboration space — incumbents have invested resources in “low-code” platforms, such as Google’s App Maker, Microsoft’s PowerApps, Dell’s Boomi, and Intuit’s Quick Base; other great products on the startup side include Superhuman, Notion, Front, Coda, and a few others.

Why Reed Hastings Should be Applauded for Netflix Split

Both Sides of the Table

Incumbents can’t react. The reason that incumbents can’t react is that their revenue and defensibility are continued by serving the high-end of the market for which it would take too much time & money for any competitors to effectively challenge.

How Much Should You Raise in Your VC Round? And What is a VC Looking at in Your Model?

Both Sides of the Table

So it’s incumbent on you to know what a smart business plan and use of cash looks like. There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch.

Event Driven SaaS - The Workflow of the Future

Tomasz Tunguz

And new SaaS companies who aim to displace incumbent systems of record will architect their products in a radically different way. The next generation of multi-billion dollar SaaS platforms, the startups who will displace incumbents, will do it with event-driven architectures and optimized workflows. A senior SaaS executive once told me, “Reports sell software.” ” In a top down sale, that’s absolutely true.

Bites At The Apple, Sharpshooting, And Shots On Goal

Haystack

The conventional wisdom is to wonder if these firms are getting too big — the counterargument is equally as valid, with technology seeping into every sector and spreading across the world, and with private markets bulging, new companies are able to raise enough capital where they can directly challenge and overtake incumbents rather than waiting for them to acquire them.

Trends in Early Stage SaaS Fundraising Market of 2016

Tomasz Tunguz

The exuberant acquisition environment should enable some early-stage companies to menace their incumbents and take share, as those behemoths are distracted by M&A. Many of the most of apparent and immediate opportunities in the software market have been filled by now SaaS incumbents. About $1B has been invested in early stage SaaS startups as of November 1. Over the last nine months, marketing startups have raised more dollars in aggregate than any other segment.

The Surest Sign You’re Winning is When Goliath Takes a Swing at You

Both Sides of the Table

I’ve been involved with several startups where a giant incumbent attacks you and tries to sue you out of existence. When you first receive the threat it feels like the local pizza shop when they first get a call from the local mafia boss and you can feel the shake-down coming.

Startup playbook: reverse-engineering Clay Christens’s market disruptions

Tomasz Tunguz

Instead of reviewing the incumbent’s strategy, I’m going to flip these around to reverse engineer these defenses and build a startup’s playbook for disruption with examples from our portfolio.

Amazon “Swipes Left” On New York City

Haystack

Given how polarizing “the stakes” can be and how critical persuasion is to winning, it is now incumbent upon politicians to improve their own dealmaking skills and to effectively communicate their positions repeatedly to their constituents. Start spreading the news, indeed. Today, Amazon announced it will entirely abandon its plans to build its second headquarters (a/k/a “HQ2”) in Long Island City, a residential neighborhood in the borough of Queens, New York City.

Here is Why Non-Obvious Startup Ideas Can Yield the Largest Results

Both Sides of the Table

Most customers won’t drive more than a few miles to a self storage unit making the incumbents essentially local retail businesses. Amazon. It is a household name.

5 Entrepreneur Ideas That Investors See Too Often

Gust

If you have more money than the incumbents, try it, but don’t look for investors. People are always asking me for an inside tip on Internet sites that will be “the next big thing.”

History of The MP3

Unvalidated Learnings

Not only did the incumbents fail to grasp the potential value, but it would have made no sense for them to go after such a small unprofitable niche, which would have been irrelevant to their top line, and eating away at their bottom line (CDs were 90%+ gross margin products back then).