Welcome to The Outlook, for Summer 2004.
Software IPOs are back, and in general we”re seeing an improved climate in the venture industry during the first half of 2004.
The two recent IPO announcements which have drawn the most attention, Google and Salesforce.com, share some intriguing common elements. Both companies have emerged during one of the worst periods of investment that the venture industry and software industries have ever experienced. Both companies have entered existing, large markets, which experts cautioned were on a downswing (internet advertising and sales force automation), yet innovated and captured significant market share.
The two firms seemed to have adhered to some basic principles of building strong businesses: a) pick BIG markets; b) execute better than your competitors, even when the chips are down ; c) develop intellectual property or proprietary technology to help you along the way, d) create a solution that”s so simple, it”s hard for customers not to use it; and, e) employ the business model of least resistance to get in the door ˜ happy customers will gladly follow you as you grow from there.
It seems to be a replicateable forumula ˜ for a management team that has the experience and agility to do these steps. Are there opportunities to build large businesses in enterprise Search, CRM, Analytics, Business Process, Logistics and Supply Chain, and other markets that might be where Search and SFA were circa 1997 and 1999, respectively?
At Outlook we think so. Over the past several months we have seen a variety of startups in industries that appear mature and developed employing the principles used by Google and salesforce.com to gain share from incumbents. We believe that some of these are on a similar trajectory of success and we are actively backing experienced management teams that can turn the vision into reality. Therefore, we encourage entrepreneurs to pursue markets they know well and build a company that delivers a strong and differentiated set of benefits to customers who are not satisfied with the existing solutions. There is good reason to believe that history repeats itself, even in the microcosm of technical and business innovation.
The Outlook Ventures Team
July 2004
The Wave Front
Search: What's After Google?
During its eight-year history Outlook Ventures has been an active participant in the area of search. Outlook Ventures (previously called Iminds Ventures) was an early participant in the creation of goto.com (renamed Overture in 1999), and General Partner Randy Haykin was a member of the start-up team at Yahoo! Since the days of Yahoo! and Overture, the search industry has evolved considerably. In this article Outlook Associate Shazia Makhdumi focuses on areas of opportunity within both Web and enterprise search, and takes a look at the startups currently challenging the incumbents in the sector.
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