What does it mean to be a disruptor today? The term, by definition, is described as “a company that changes the traditional way an industry operates, especially in a new and effective way.” Today’s tech industry, in particular, thriving on an insatiable need for innovation and exploration of uncharted territories, has simply caused the word to lose some of its cachet. Without set guidelines to define the requirements of what it really takes to hold the title, you might be hard-pressed to find a tech company or startup that doesn’t consider itself a ‘disruptor’ in today’s landscape.
True disruptors are thinking miles and years ahead – passionate about finding ways to solve tomorrow’s problems before many of us have had to the chance to tackle the most pressing issues of today. As a member of what has become an aggressively competitive venture capitalist community, it is imperative to have a keen eye for true innovation. What shines on the surface, many VCs have come to find, can be quite the opposite in some cases.
There has to be a method to the madness, whether it be a rigid set of processes to cut through the noise or a personal approach that has proven fruitful in the past. With over 80+ years of combined experience across the leadership team here at Scopus Ventures, we have come to believe in a small set of characteristics to help guide our strategy and identify proven disruptors that align with our underlying business goals.
Category-defining: With new industries and subindustries popping up almost daily, we have come to focus on category-defining companies – leaders and front-runners bringing unprecedented innovation to a particular area of business. That is not to say we are looking for companies without competitors, but those whose technology is laying the foundation and groundwork in a competitive landscape that demonstrates a true prowess to remain on the cutting edge. Think what Elon Musk and Tesla are to the automobile industry. Having the ability to completely revolutionize a specific market and set the tone for others to come is what we look for in companies that are re-shaping technology as we know today.
Metrics: Numbers don’t lie. We can argue that the world runs on the numbers and solid performance backed by accurate data and statistics is hard to ignore. A company that tracks and monitors its growth and projections based on hard numbers can be quite appealing to investors with a critical eye. How are you measuring success? How are you performing against your goals? Have your met or exceeded your projections year over year? A metrics-based strategy and reporting structure promotes transparency and shows investors that you are serious about optimizing your business to secure the best possible ROI. Having these systems in place from the beginning of a working relationship can help to eliminate or avoid many compromising scenarios in the future.
Growth potential: Ideally, investors, especially those specializing in the seed stage, want to partner with companies that display explicit growth potential. One of the main advantages of partnering with a VC is the additional support in efforts to scale and expand the footprint of the company. True disruptors have a clear plan in place to gain market share, and can show significant progress over a set period of time. A granular analysis of the market size, competitive landscape and long/short-term developments provides a more realistic projection of growth potential to guide your company’s business strategy and help investors provide more valuable guidance along the way.