It's more complicated than that

Quick. Name something that sounds easier than it actually is…

How about:

1. Raise a Venture Capital fund

2. Do a strategic business development deal

3. Sell free software

These are just a few of the things I’ve either done successfully, or tried like hell and failed.  In each case they were each more complicated than I first thought.

1. Raise a VC fund

Find some wealthy folks, convince them to commit a heap of capital to your fund, find great emerging companies to invest in.  Invest, manage, sell, merge, IPO, etc. Make you and your investors a bucket of money more than they invested.  Repeat.

Reality: this is really hard.  The team, the strategy, the timing, the track records, the history of working together, the toughness of the first LPs, the ongoing management of the fund, the ability to compete and get into the best deals, the nuance of being a helpful board member, the insight to see a bigger strategy and coach your investments, the knack for understanding and helping with exit negotiations.  It all adds up to a unique and talented set of individuals who can pull it off successfully – for 3 successive funds.  One hit wonders don’t count.

2. Do a strategic business development deal

Figure out a win-win for you and another company.  Get an agreement in writing.  Rollout the “strategy” and both of you reap giant rewards. High 5’s all around.

Reality: doing the deal is the easy part.  Its the devil in the details and the ongoing execution that makes this one really hard to pull off so everyone wins.  Most BD deals are done by BD people who’s primary nature is to be elephant hunters and “relationship” managers.  A different set of DNA is required to actually make a deal go and succeed.  It involves day to day attention to details, managing through hiccups, finding common ground and most of all, getting the other side to do the same.

3. Sell free software

Linux is “free” (not like free beer, unfortunately).  People that have UNIX will love that Linux open source shit.  They pay for only support and maintenance which is mouse-nuts compared to AIX, HP-UX, or Solaris.  Everybody wins.

Reality: not so fast sparky.  I had this hit me over the head with a sledgehammer when I first pitched CIOs and IT execs at companies like GE, HSBC, AT&T, Wyeth, Safeway, Humana, First Data, JP Morgan, and the like.  Turns out that running a big company’s IT is really hard and that things like uptime, backward compatibility, staff training, software vendor support, device drivers and all sorts of other things that actually keep big IT departments up at night are way more valuable than the few dollars they save by going to Linux (or name the other OSS of choice).

Its human nature to boil things down to the simple and straightforward.  I think that’s a good thing and the best, albeit imperfect, way to get things moving.  Otherwise we’d all sit around and fret over how freekin’ hard things are.. The trick is that if you want to succeed it actually takes hard work, thoughtful attention to detail, and a general willingness to do whatever it takes to follow through on the execution, no matter what.  Generally speaking, It’s more complicated than that.