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January 09, 2006
VCs Get No Respect from Malik
This post cites the opinions of Switzerland’s very own Malik, Fredmund, that is, not the other well-known Malik, Om Malik.
The Austrian-born Malik is a uni professor and author who runs a 50-person strong consultancy in St Gallen. He is cited here because he provides some advice for startup managers in a podcast interview, published last week by VentureLab. He tells entrepreneurs to avoid VCs, a good tip in principle but something that would be hard for a chip startup or one trying to commercialize any kind of science-based innovation, and he also provides some good tips on marketing.
(Since the interview is in Swiss German your reporter translated some of it here.)
On VC in general: I used to think that venture capitalists – or whatever that masquerade of vanity calls itself now - were smart. I thought that they had vision, that they understood economics, that they had joy in taking risks, that they had the ability to gauge and analyze a business plan… But I have lost any modicum of respect I might have had for venture capitalists, when I think of the stupidity that they invested in...And they are not any smarter today, by the way. They do not think entrepreneurially and they are not investors.
On innovation: Innovation is all well and good but thrilling customers is better. It does not matter that venture capitalists, financial analysts, or journalists get excited about an idea and value it highly. What matters is getting customers excited.
On why marketing costs too much: Too many managers and management consultants promote the same strategies, which results in the same types of products. This means that marketing ends up costing a whole lot of money. It is certainly going to cost a lot to try to convince customers to buy the exact same product a competitor is offering.
Malik is consistent to say the least, which is a lot more than you can say for some folks that have commented on technology investment in the past eight years. He is saying today pretty much the same things he said back in 2001 the last time I quoted him.
Posted on January 9, 2006 05:18 AM | Posted to Venture Capital | Permalink
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