Mary Schmidt Marketing Troubleshooter

I routinely check to see what VCs are doing - as ultimately nothing happens without at least some money - from growth of a hot business to the next “Big Thing.” This from today’s Dow Jones VentureWire: “SOMA Networks Inc., which sells equipment for high-speed Internet access over wireless networks, has raised $50 million in late-stage funding to continue expanding its overseas business. The capital was raised in two separate rounds. …SOMA sells to telephone companies, not directly to broadband users. “

Couple of things come to mind: 1. Great to see that the expansion of wireless capabilities continues - exciting times! 2. Downside: Selling to and working with telcos can actually hinder the evolution/revolution of communications (Anybody remember ISDN? The touted “year of ISDN” became an inside joke). Having worked with and for telcos - I can tell you it can be long and laborious to get things to market, even when the telco wants to do so (For a lot of reasons, including cultures and infrastructures. One reason ISDN was tough was that the Central Office switch software from Nortel didn’t talk to the software from AT&T and ISDN required expensive changes to the CO). So, if you’re not interested in selling to telcos - why should you read this? Here’s why:

Entrepreneur Sanity Checkpoint #1: Dependency on a small group of customers which in turn may not be able to: A. implement your solution, without major costs and process changes; B. Sell to their customers (Another reason ISDN had problems. The telcos couldn’t convince end users to buy the service or the equipment - at least not at the high margin price points upon which the telcos insisted.)

Entrepreneur Sanity Checkpoint #2: Long, complicated sales cycles. The larger the company, the harder they fall. And, this applies across all industries. I’ve worked on deals with Microsoft, Dell, Solectron, HP, Cisco, Bell Atlantic, Sprint, ….And ALL of them took time, even when they wanted the deal. And, tough line-by-line negotiators. If you’re just starting out, you may not be able to survive until the deal is signed. (Of course, there are exceptions and quick deals are made - particularly if you’ve got a great salesperson as CEO. But that wild man CEO can also give ulcers to the CFO, head legal counsel and CTO once they get a look at the wheeler-dealer deal details)