tech-company, investors, pitchSuppose the main value of startup A is a breakthrough technology that no one has figured out yet and they are looking for VC funding.
The most common and toughest question from the VC is, “How can you guarantee your technical lead in 2 years if Facebook/Google whom has thousands of genius Stanford/MIT PhD graduates decides to work on this?”
Saying a few brains in a startup can beat thousands of genius brains is unrealistic.
Saying eventually the startup cannot hold the technical lead will likely result in no investments from VCs.
Saying Facebook/Google won’t decide to work on this is another way of saying the breakthrough technology from the startup is unimportant.
What’s the best response to this kind of question?
You ask a few questions here.
Your question on "How to keep tech lead ..."
We are facing a similar problem. We have an tech startup involved in Microsoft Azure marketplace. Our product idea is a quantum leap on anything in the market place, but a large company could easily spend 3 months and out develop us. Our development cycle is perhaps 6 months due to staff limitations. We also cant compete on pay (yet!)
I think it depends on the personality of the person.
Things we consider
Look at the individual, what is most important to them
These factors and more can work in to give you an idea of a "package" that can motivate and encourage longevity in this particular guy.
From a VC point of view, I think the shareholder aspect is perhaps the most compelling. We have a very loyal staff that 7 of 12 are shareholders through an EMI Scheme. Additionally we understand the various motivations of each staff member and actively hire to support and build the current team.
How much would it cost for these large companies to develop the same idea than the one you developed ? And how much would they sell it ?
Does gathering data helps you improving your service on a regular basis ? If so, having the first mover advantage is a real asset.
Fintech is about creating services in the financial sector. Some of them are directly sold to the banks, who have much more workforce than start-ups. Yet, if it is more expansive for them to create it and maintain it in a single institution than for you, there is no point in them copying you…
Besides, how big is your technical lead ? Bear in mine that Google bought DeepMind, did not copy it…
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