Anyone who works in the venture business or frankly just lives in Silicon Valley will be used to hearing a buzz word rise up out of nowhere to capture the technology zeitgeist and find its way into every entrepreneur's product development plan or every aspiring entrepreneur's pitch deck.
I call this "the puck at your feet" because it's not where the industry is heading but rather where the industry is today. By the time you launch your buzz word feature we'll be on to the next fad and everybody will be offering your buzz product so it won't be differentiated. As an entrepreneur you need to think about where the puck is going.
The most recent example of cringe-worthy buzz words is "game mechanics." It seems that you can't build a business these days without it. I'm not exaggerating when I tell you that at least 50% of all new businesses that I'm seeing are telling me that they're incorporating some form of game mechanics into their offering. I wonder where this all started but I'm guessing it was popularized by FourSquare. I heard from one smart source that years ago that Reid Hoffman had predicted the "game-ification" of most Internet businesses.
I'm not arguing that game dynamics in your business solution won't be important or successful. I get the appeal and importance of this innovation in driving behavior. So if you think it will drive behavior in your offering—go for it. But if you're "leading" a pitch with game dynamics as though you thought of it first it gets to be a bit much. This is especially true when you present to investors who get jaded very quickly as all presentations start to sound like the last one. I think a more subtle discussion of game dynamics in your software is warranted and it should be a supporting point to a discussion of what real innovation you're planning.
Similar current buzz-meter terms include: geo-location, geo-fencing, local deals, local offers, flash sales, group sales, privates sales and augmented reality. And of course—badges. Fawking badges. Really? Okay, I get it. Badges were an innovation. And they seem to work. But badges are the puck at your feet. If you think they'll be good for your app—fine. But if you're trying to convince me that it's WHY your application will succeed I'd suggest you think harder.
Badges = Foursquare. Maybe someone else, too. FourSquare will own the branding of that innovation for a while. I'll bet even Foursquare is thinking about an eventual life beyond badges. I hope they are because badges will run their course.
Last year's passé terms that even entrepreneurs cringe at (and the best are embarrassed to lead with) are social network, social media and social games. I guess "social" is just soooo last year. I think by now we all sort of assume that social is pervasive in everything you do in the way that location-aware is assumed in all mobile apps.
So what happens when you combine two buzz words and form the basis of your investor pitch? You'll almost think I'm joking but I'm not. People come in and say, "we're check-in's for TV," or "we're check-in's for consumer products," "we're check-in's for food."
Me: "Okay, but what is your innovation?"
"Well, when people check in on TV we're going to give them badges." Me, dead panned. "Wow, how did you think of that?"
I recently gave talks at Caltech & Stanford. One of my most important messages was if you're sitting around dreaming about creating an innovative startup don't start by reading TechCrunch and thinking about how you're going to copy all of today's innovative companies. That's too late. It's the puck at your feet. Come up with your own novel thoughts.
Your new idea won't resonate with people the way "check-ins" does because they've never heard of it by definition. Most innovation comes from non-conventional views. And I feel the same about investing. I think you make money by investing where the puck is going. I'm looking for deals that might initially make others scratch their heads the way people first did with Twitter or Quora. The way many people are currently thinking about DataSift, "It looks cool but I kind of don't get it?" (I'm not an investor, I'm just judging by people's reactions at TC Disrupt. They loved all the consumer stuff they could "get" and all the other stuff made them scratch their heads.)
And if you come up with something truly novel you can be the buzzword 2 years from now when everybody is chasing your puck. That's called product leadership.
[Update]: Some people have pointed out that all of today's "innovations" are just yesterday's ideas rehashed such as Salesforce just doing Siebel on the Web, Mint doing Quicken on the Web, Quora copying Yahoo! Answers or Twitter just being a take in IRC that has existed for years.
In my view almost all ideas are derivative. Recreating and out executing a tired, old site in a new way is innovation in the way that Quora has totally redone how Q&A works. And Siebel on your desktop is not the same as Salesforce.com on the Web. And, yes, somebody has got to kill off evite. But I think that re-doing a tired, old implementation in a novel way is very different than chasing today's fad.
And when Google launched, while it was "search" they came up with a novel model for ranking results—PageRank. It was derivative but innovative.
Reprinted from Both Sides of the Table
Mark Suster is a 2x entrepreneur who has gone to the Dark Side of VC. He joined GRP Partners in 2007 as a General Partner after selling his company to Salesforce.com. He focuses on early-stage technology companies. Follow him at twitter.com/msuster.