Why The “Hokey Pokey” Matters When You Are Creating A New Company
Niel Robertson – the CTO of Newmerix – was interviewed recently about his “four rules of market timing” (as they apply to creating a company). Niel is a successful multi-time entrepreneur (and fellow MIT grad) that I’ve known for a decade. He was an early engineer at NetGenesis, co-founded Service Metrics (I was the lead investor – Service Metrics was acquired by Exodus in 1999) and co-founded Newmerix several years ago (again – I was the lead investor). Niel is also the proud owner of the nicest Ferrari in Boulder.
In the interview, Niel talks about his four rules of market timing. These rules help him determine whether the market is ready for an idea and he tries to apply them to any business idea he is thinking about. They are:
- New dog, old tricks: Look for things where company invest in new technology platforms to essentially do what they are already doing.
- Throwing good money after bad: Look for situations where companies commit to a technology choice and then either scrimps on the initial implementation or poorly scopes the project. If you can find systemic instances of this, they’ll need to throw new technology into the mix to get what they originally wanted.
- Earthquake: The pain of a problem rarely comes at once – it comes in waves – just like an earthquake. If the small ones come first, you’ve got an opportunity. If the big one comes first, forget it.
- Hokey Pokey: This one is my favorite. Companies inevitably decide to bring things in house or outsource them over and over again. If you can find a hokey pokey situation, it’s ripe for innovation.