Last Tuesday, Bill Reichert, Managing Director of Garage Technology Ventures visited Bandung. He went to the office Agate Studio and Bandung Digital Valley and I had the opportunity to attend a light discussion with him at BDV. Bill came into Indonesia as part of the entrepreneurial programs run by Bank Mandiri.
Garage Technology Ventures (Garage) is a seed-stage and early-stage venture capital fund headquartered in Palo Alto. Two other managing directors at Garage are Guy Kawasaki, who is also the founder, and Joyce Chung.
This light and casual discussion yesterday was attended by digital entrepreneurs, startup founders, a community like Mikti and FOWAB. There are some interesting things discussed at the meeting and it could become an idea and information for startup technology activist.
Garage Technology Ventures
Before starting the discussion, Bill explained a little about what has been done by Garage Technology Ventures. Apart of investing startup in the seed stage and early stage, they also made a variety of sharing-knowledge events and programs. Bill explained, Garage has one by one incubator approach, so if they find an interesting startup or entrepreneurship to invest they will develop it intensely. They also actively created programs and events to share knowledge.
Beside the entrepreneurship programs organized by Bank Mandiri, Bill also explained that he was attracted to visit the whole world for the innovation which is becoming Garage’s reference. Innovations are scattered in various parts of the world and he wanted to be close to it. This is also aligned with what has been done by Garage Technology Ventures.
Bill also didn’t forget to tell us about the Garage name which refers to ‘garage company’ that become an internet giant company such as Apple and other companies originated from garages.
Startup, Elevator Pitch, and Wow Effect
Garage funding model is usually done by bringing invested startup top management to Silicon Valley. Bill also said that they were more inclined to seek startup with products or services that are intended for the global market. Thus the top management brought to Silicon Valley in order to develop startup globally while they remain having their own local market. Not all startup were funded from outside the U.S.
The chosen startup shouldn’t be listed in a low entry barrier area it should have the advantage and high sustainability.
Speaking of startup, Bill also gave some tips. It’s no doubt that for mobile segment the competition is quite high now, however Bill said that the startup service must have something different, have the WOW effect and hasn’t been done by others. A problem solver method offered by this service should have something different from others
The example given by Bill is when Foursquare first launched. Foursquare had to compete with a variety of other services such as Gowalla, however they offered different thing and became more popular. Another example is Twitter. At the beginning this service was very ‘simple’ but the “follow” feature made Twitter becoming popular. Spin, twist, changes/additions in the service could provide the differentiation effects from other services. Now Twitter grows with various additional features.
Despite tough competition, but innovation still continues to happen. It takes a creativity that is needed by costumers.
Speaking about the WOW factor, Bill also explained about the elevator pitch. This process isn’t to shorten the presentation into 30 seconds, but the important thing is how to make people listen to us and become interested. So it’s important for entrepreneur to find the ‘wow factor’ or the clear and interesting statement about their service/startup.
About Paid Applications, Free, or Freemium
One participant, Andri Yadi from Dycode asked about sales application models: free, fremium or paid. Bill explained that sales application model is one of the tricks for the application to be ‘seen’ by the users because we know that the competition for the application is now becoming fierce.
One of the ways to make an app more easily discovered is by way of a seasonal promotion. In other words, offer the app at a discount or for free. This usually leads to media coverage of the promotion especially on sites that cover specific or limited deals on applications. Limited time promos often would attract people to download thanks to the discount.
Bill explained by way of an example (though he mentioned no names) that there have been apps that were promoted this way and became successful even after the promotional period ended because there are people who are willing to pay to download the apps.
This allows apps to be discovered by consumers. It’s reported by the media who is covering various news about the discount application on a certain days and it can drive costumers (who previously didn’t want to buy) to buy because of the discount (both discounts and free). At the end of the promotion period the possibility for consumers to keep buying is still wide open even though the program is ended.
The Other Thing
Some other things that I also found out from the brief discussion with Mr. Reichert is about the ecosystem in Silicon Valley. We often hear about the next Silicon Valley but Bill said that in fact we don’t need to (unlikely) copy what is in it. The more important is building the right ecosystem, including system, programs to support the development of entrepreneurial and business ecosystems in certain regions.
It’s like making a local version of the Valley, but of course with the condition, analysis and sensitivity to the environment in which the ecosystems will be developed. Mr. Reichert also said that one of the many factors that sustain the Valley is the fact that entrepreneurs there don’t retire which allows the ecosystem to keep going.
—
Broadly speaking, Bill also supported variety programs such as BDV and other similar programs even though he didn’t explicitly say. However I see from some questions addressed to Bill (asked by BDV representatives during the discussions) that there are significant programs and plans, of course it’s not only on paper such as incubation program. The most important is the real impact for startup and direct action that can develop startup development. The startup target should be clear when running similar incubation/program. For me it means clarifying purpose/vision/mission focusing on running incubated startup or startup in the development program.