What makes a tech startup successful in today’s hotly contested markets? Ensure your product has a 10:1 advantage over the competition, says Vancouver entrepreneur and mentor John Seminerio. Simply, your product or service should be 10 times more productive — or 10 times cheaper — than the current market leader.
If you think that barrier too high, think again. When Seminerio sold his supercomputing startup, OctigaBay, to industry giant Cray in 2004, he had a 100-times advantage. “Our supercomputers were 10 times faster than Cray’s, at one-10th of the price,” he says. “We were acquired within 14 months.” OctigaBay’s stellar value proposition fetched a celestial price, too: $115-million. The Canadian venture-capital community called the sale its “Deal of the Year.”
(Sure, that price tag pales against that of Seminerio’s previous Vancouver startup, Abatis Systems, which sold to a U.S. networking company for $676-million. But that was an all-stock deal, and besides, that was in 2000, when nine-digit-deals were as common as Internet millionaires.)
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