Strategic Technology Resources

A Discussion with Ben DuPont founder of Yet2.com, www.yet2.com the leading internet-based technology brokerage service:

Ben, what challenges have you faced that are beyond ordinary business, challenges that required unusual creativity to meet?

All of us are faced with things in our lives that are addressed by that question. The one that stares me in the face though is founding Yet2. If you look at the usual 2 by 2 business matrix, in the lower left hand corner are existing products in existing markets and in the upper right hand corner new products in new markets, Yet2 plays firmly in the new products in new markets space. So Yet2 was absolutely out of the box and business as usual did not apply.

There were no blueprints and no recipes for what the business would look like. There was nobody we could copy from, not even anyone to copy segments of our business from. It was just an entirely new kind of business in an entirely new kind of market.

10 or 20 years ago, with rare exceptions, it was unheard of for companies to buy and sell intellectual property to each other, and today it is still relatively rare but is happening with increasing vigor.

What approaches have you taken that have met your challenges?

There were a few critical things that we did to be successful that are evident now, six years later. And we have seen 30 competitors fall by the wayside in that period.

First would absolutely have to be people. We got an extraordinarily bright team who were very complimentary. I think the challenge in getting complementary people to work together is that fundamentally they don’t necessarily see eye to eye. Take one of my partners Phil Stern who is a Baker Scholar, from Harvard Business School, in the top 1%, with 9 years with McKinsey. Phil is one of the most analytical and thorough thinkers I've ever met and I'm not. I'm at the other end of the spectrum. The challenge with these sorts of people is getting them to work to together. Getting good people with capability who can work together was a key thing that separated us from the competitors that failed. And a key reason we're successful is that we've just got a very different group of folks tackling the same problem from different perspectives.

That allowed us to run a lot of little experiments. I’m a big fan of failing cheaply and the key to failing cheaply is to do lots of little experiments and to see what works. I had an old boss once who told me "If you have a problem, make sure at least you move the tiller a little bit". In other words do something different. Sometimes you don't know what to move, but his theory was that of the 10 variables you could move pick two and change them and see what happens.

Our team allowed that kind of experiment and in addition it also had continuity to allow hiring of other employees. In a little firm like ours most of the management and employees have been here for 5 of our 6 years. That's pretty extraordinary for a little company of our size.

The second thing that's critical in the gray space in the upper right hand quadrant is to find folks to constantly be seeking advice from that have very different perspectives. I think that is less critical than people but it's absolutely key in finding solutions to some of these tough challenges.

I think the third characteristic, and this may apply mostly to startups, is that a lot of small companies fail just because they are undercapitalized. One of the good things about a good team is that they bring capital or sources, or ways, of getting capital, if needed. I had a friend who once said "there is no such thing as a shortage of capital but a shortage of good ideas and good people. With good ideas and good people the access to capital is unlimited".

Number 4, our vision had a lot to do with our success. We’ve had the same vision through 6 years - that is to build a more liquid market place for technology to better enable companies of different sizes, different geographies and different industries to more efficiently buy and sell technology from each other. And that's what we've been about from day one. The things that were attractive to us about that vision are first that we all got up in the morning thinking we were making the world a better place. And secondly we also recognized if you did that and you were able to build critical mass in that spot and if you owned facilitating liquidity of intellectual property globally that would be a valuable piece of real estate to own. Given that you’d have access to capital and customers would come on board.

Ben, how is Yet2 doing?

It’s beginning to pay and that's a great feeling. I no longer wake up in a cold sweat.