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Interview with FirstCapital
The Mobile Technology Weblog, 1st February 2005
Jason Purcell is CEO and Founder of London based Corporate Finance house FirstCapital. If you're looking for funding, check out their website as there's plenty of great advice and resources for entrepreneurs.
I interviewed Jason about his views on the VC market and mobile, especially:
Q) As an early stage investor in wireless, what areas do you think are more likely to attract funding at the moment?
A) There are lots. Services that depend on 3G; wireless VOIP; broadband wireless data and video services. WiFi attracts attention still, as do technologies such WiMax.
Q) The last few years have been difficult ones for true start ups, ie with no real progress to show against the business plan. Do you see that changing or are the days of a 'man with a plan' likely return anytime soon?
A) The days of a 'man with a plan' never went away. What got scarce was finance for the 'man with a plan'. But a plan is only part of the answer. Managing a roll out, building revenues, sales channels, management teams and companies all matter too, and these are things that investors want to see.
Q) What's your biggest 'golden rule' for entrepreneurs approaching investors?
A) There are lots. Here are three:
1) It's better to under-promise and over-deliver, rather than over-promise and disappoint.
2) Do you know who your revenues will come from, and why?
3) And if you do, can you explain it in 30 seconds?
Q) And your biggest don't ever even think about doing this?
A) There are too many big ones to choose from. One in mobile is promoting an otherwise brilliant idea, but one which relies on mobile operators or equipment manufacturers to open up their network or interfaces in order to realise it. There's enough risks in venture capital without starting off with a load more.
Russell adds: Loads of promising companies have gone bust waiting for operators or handset guys to do something (like deploy location tracking technology, for instance) or trying to negotiate a deal with one. If your plan relies on something like this, don't bother, quite frankly.This isn't having a go at operators, by the way. It's just the way things are. And it doesn't mean that you shouldn't try to do a deal either. But you do need an alternative strategy for your plan to work.
Q) Tell us about one start up in your portfolio that really excites you at the moment?
A) I've learned in venture capital not to get too excited, but just to be hopeful. I'm very hopeful about all my portfolio.
Q) And one start up that excites you and isn't in your portfolio?
A) There's both the room and the need in next generation mobile networks to create the Cisco or Microsoft of mobility. There is one or two players in mobile networks and software area that have got a shot but there is a way to go yet.
Russell adds: I agree with Jason on that. One of my constant themes is that Microsoft just don't understand the potential of mobile and that it's poised to wipe out desk top culture as surely as the desk top wiped out the mainframe.
Q) One of the areas we cover in the blog is Location Based Services, which haven't really reached the potential that everyone thought a few years ago. Why do you think this is and what does the future hold for LBS?
A) It's easy with location based technology to know where you are. But the market is all about knowing what to do about once you know where you are. In other words, it all about the applications and not much about the technology of location. Frankly, the mobile industry structure doesn't make it easy to exploit new services, unless of course you're a network operator, and they have so far had plenty of other priorities, securing telephony market share.
Q) What do you think about Blogging, are there any business models that make sense?
A) We're waiting to find one.
Q) Make 3 wireless predictions for the next 3 years.
(1) Millions more customers will use some form of converged fixed/mobile service, even if it is only throwing away their fixed phone.
(2) The many thousands of objectors to mobile phone masts will continue to want to use mobile phones themselves, willingly subjecting themselves to higher radiation levels than the masts they seek to stop
(3) The size of the buttons on mobile phones will continue to follow Moore's Law, making it harder for me to text.
Q) Is there anything I haven't covered that you like to talk about?
A) We haven't talked about the killer app for 3G. Maybe there isnt one at all. But I think it will be continue to be voice for a while yet.
Russell adds: I agree with that too. Actually, it's one of my 2005 predictions. Number 14 actually.
Thanks Jason - it's great to get an inside glimpse of the funding world.
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