Barriers: The Best Defense Is A Good Offense

When asked about their company’s barriers, entrepreneurs will list as many potential barriers as they can. Everything from network effects to patents might be included in that list. While these are all real barriers, not all barriers are created equal. Some are simply more appealing to investors than others.

The way to distinguish the between more attractive barriers and less attractive ones boils down to whether the barrier is offensive in nature or defensive. Offensive barriers are ones that are built by the company making progress. Data synergy, R&D advancements, partnerships and others fall into this bucket. The most frequently cited defensive barriers are patents and intellectual property.

The reason why offensive barriers are more appealing is that building and enforcing them is often done in conjunction with the business. First, offensive barriers are often built by focusing on building the business; defensive barriers often distract entrepreneurs from building the company. Filing a patent, for example, can take time away from acquiring customers. Second, offensive barriers are enforced through the natural course of business, while defensive barriers are often enforced allocating resources into activities that don’t directly build the business. Suing another company for infringing on a patent, for example, takes resources away from other business activities. In sum, offensive barriers are well aligned with the business of building companies. Defensive barriers can draw resources away from building companies.

Lastly, defensive barriers may be leveraged only after a company loses the race, offering more downside protection than upside potential. By the time a patent is granted, a competitor may own the market. While the right to sue them could generate a return — the competitor benefited from the majority of the value creation in the sector.

Ultimately, the most appealing barriers are ones that are offensive. While this doesn’t mean that you should ignore defensive barriers, it does mean that you should focus on the offensive ones (especially when presenting to investors).

The Innovation Need

Innovation – the it word that everyone is using these days. The very fact that we all have used innovation at least twice on our LinkedIn profiles definitely means it is. Although, does anyone ever stop and ask what innovation is?

We have found that, just like beauty, innovation depends largely on the eyes of the beholder. Some say that innovation is a process that is at beginning of a product lifecycle. Some feel that the need for innovation originates from the customer. Others feel that innovation is an overused buzzword that is much as a fad as <insert now-a-trend-now-not-a-trend here>. There are others who have determined innovation to be the responsibility of specific departments, with no scope of internal collaboration at all.

Here’s our take on innovation – it IS a buzzword, but one that is here to stay. Why a buzzword? Because the innovativeness behind innovating is lost when everyone is doing exactly that. Why is it here to stay? Because innovation to the corporate-kind is evolution to the human-kind. Evolving preferences, decisions, opinions have resulted in companies needing to drastically switch up their offerings in order to stay relevant. Everything is evolving, and it’s in our best interests to evolve faster than those around us (thanks Darwin!).

We believe that the entire concept of innovation is a mindset. A mindset that allows people to think beyond what has been and focus on what will be. There are a large number of companies who want to be innovative but aren’t sure how. While no one can change mindsets (though one can try), the best way of understanding and embracing innovation is looking around you. 

Given the sheer amount of innovation and evolution that one witnesses on a daily basis, we understand that it can be an uphill task to sift through the early stage community to find innovation relevant to you. What are others doing? What can we do to match that? How can we better align ourselves with the customer of today? How long will it take? These are just a few questions that will inevitably swamp you.

That’s where we step in. Fulton Waters works as a funnel and filter for corporations looking to partner with the innovation community. We curate opportunities tailored for the Fortune 1000. If you feel overwhelmed navigating the changing landscape, we may be able to help. 

Reach out and learn more at

A Day in the Innovation Age

Here at Fulton Waters we have the privilege of spending our days talking to, and working with some of the most innovative companies and people. For fun, we put together a ‘day in the life’ of all things that are a reality today, that most people don’t realize, many of these examples are companies we work with.

Monday morning. Your smart home system connected to your devices and calendar, wakes you up so that you aren’t late for your early morning meeting. After a quick breakfast, you hop on your motorcycle, not forgetting to put on your helmet that’s connected to your phone, giving you immediate access to maps, messages, calls and even your music through a Head Up Display on the visor. On your way to work, you spot Google’s self-driving car driving behind you, thanks to the rear-facing camera mounted on your helmet projecting visuals on your visor. 

Walking into office, you meet with your team – marketing strategies being the theme of the day. A quick check with your influencer marketing program shows that your online content has doubled in the last month; all thanks to incentivizing consumers to upload their own content to your brand page. 

Another software highlights trending content, driving website engagement and traction, so you inspire your team to start sharing articles on the company’s knowledge hub. You also ask them to rope in their best customers and consultants to contribute, empowering them to become thought leaders.

Your phone beeps, and it’s a message from your finance team about the company’s drop in sales volumes. Thanks to your secure messaging platform shielding you from hackers, you can talk about sensitive numbers with your management team on-to-go. A short conversation later, a decision to reduce product prices is reached. 

With cognitive software studying your retail data, you know beforehand the impact of a price drop within a product category, down to specific retail store or multiple stores in a region. What’s even more impressive is that the model can even study the impact of weather on your sales.

Increased store visits bring new consumers to witness your new retail sales driver – a cutting edge product display that combines a physical and digital product experience. With predictive analytics in place, your online customers are sent personalized product-specific emails, letting them know of the price drop, all on the basis of their search history, across devices. The newly integrated sales system allowing customers to shop with real-life local sales executives online will streamline the shopping experience, increasing the money spent.

Next is a meeting your insights team. You decide to re-launch one of your products to a different market after a new type of digital research uncovers the underlying motivations of your, and your competition’s customers. Who knew you could get so much information from a social profile? 

With the day drawing to an end, you prepare for yet another action packed day ahead.

Fulton Waters works as a funnel and filter for corporations looking to partner with the innovation community. We curate opportunities tailored for the Fortune 1000. If you feel overwhelmed navigating the changing landscape, we may be able to help. Reach out and learn more at


The Art of Collaboration

The young innovative community has been credited to finding new solutions to age old problems, problems that in some cases larger corporations were built on solving. The start-up world excels at identifying, unlocking and tapping into latent consumer segments – often overlooked by their larger peers. 

Their agility allows them to perfectly align themselves with dynamic consumer expectations, an expertise that corporations are not structurally built to perfect. This agility is being aided by the free-flowing communication that exists both, within start-ups as well as between them and their consumers. Increased interaction has resulted in a community-crafted guideline of best practices, enabling everyone to position themselves for success. 

This has resulted in many established businesses, across industries, being caught on the back-foot, resulting in them having to drastically alter their business models to meet customer expectations. This change also pushes teams to collaborate internally, in lieu of teams operating in their own silos. Amazingly, some corporations aren’t even aware of smaller companies that pose a direct threat to their business – until it is too late. The widening innovation gap that exists between early stage businesses and corporations needs to bridged; and fast. 

The only way to shorten the gap before it becomes irreversibly broad is for collaboration to take the forefront of any corporate strategy. Partnerships can allow for a free two-way flow of information and learning, proving beneficial to all those involved. These relationships allow corporations to leverage their access, which when combined with open innovation, allows them to broaden innovation brought to the market. 

Fulton Waters keeps innovation at the forefront of its business, working with corporations and the early stage community across industries and technology to identify and create relationships that should exist. 

Find out how we can help. Learn more at

Connections Vs. Relationships

Connections and Relationships. Often synonymous, though not always.

One has often heard connections being used in the business sense while relationships is a more of a personal term. The team sat down to think about connections and relationships, their impact on how we function in the business world – especially in the sales and business development environment.

A connection is often an individual we have met a handful of times (even less, thanks to LinkedIn) and potentially do not know much beyond their name, designation and company. Connections are opportunistic in nature, when two people quickly determine that “staying in touch” will prove to be beneficial to each other’s corporate lives. Communication is rare and seldom outside the realm of quick favors and questions, ideal for the one-off sale or meeting. I must clarify though, there are exceptions.

Relationships. Far more beneficial and definitely far more sustainable. Favors and questions are met with detailed feedback and thoughts – more valuable than hasty responses and decisions. Relationships provide you with insight that a connection may not be able, or willing, to provide. There is a trust to these relationships that change the dynamic of a conversation that lowers skepticism and allows for a sincere conversation about a potential mutual benefit, or not, earlier.

One may argue that connections over time convert into relationships. Very true and very correct, relationships usually start as connections. One should also not overlook the significant time and energy investment needed to successfully make the conversion.

In the fast paced nature of the business world today, what if you don’t have the luxury of time? What if your sales team has the right connections but not the right relationships? How do you circumvent a lengthy sales process? What do you do to grow revenues and add customers without increasing costs?

Fulton Waters is a network of professionals who each have 15+ years of industry specific relationships in the Fortune 1000.  When we find amazing innovative, companies, we leverage these relationships to help them realize their growth potential.

Find out how we can help. Learn more at


Mitigating Partnership Risk: Hearing It From The Horse’s Mouth

Some businesses rely heavily on securing key partnerships. While entrepreneurs will often make compelling cases for why the prospective partner will want to get involved, there are often unforeseen reasons why the partner never inks the deal. Key decision makers may be in a political struggle, they could be considering doing the same thing internally, the fight for budget allocations may not have gone in favor of the partnering department and the list goes on.

As a result, a VC will typically try to mitigate its exposure to the risk that the partnership will not be secured by having direct conversations with the potential partner. If they hear the partner say that the deal is going to get done, it is much easier to believe in the prospects of the startup.

If your company is currently in negotiations with the partner you will have to weigh the pros and cons of having the VC speak with them. While the VC call may add a new dynamic to your relationship with the partner, it may also signal to the partner that your startup is close to having deep pockets supporting it, mitigating financial risks. In this case, you have to make a judgment call, which typically boils down to letting the VC speak with your potential partner or waiting to get funding after the partnership deal gets done.

If you have not yet initiated conversations with your potential partner, you can leverage the VC due diligence process to initiate those relationships. Most good VCs have a deep rolodex and can usually find a way to get in touch with the person who would consider doing that deal with you. Not only can they make the introduction, but also they can give your company significant credibility when they are first introduced to the potential partner. When the potential partner receives a call from a respected VC who says, “We are looking at an interesting startup right now that could present a partnership opportunity for you. Would you mind having a conversation with them? We would love to hear your perspective on what they are doing.” If a serious investor is interested in your company the potential partner will likely give conversations with your firm more weight.

As a result, if your strategy depends on securing one or more key partnerships be prepared to facilitate the conversations that are required to give the investor comfort. And, if you have yet to connect with the partner you may want to leverage the due diligence process to help get the deal done.


Mitigate Gatekeeper Risk

One risk that can scare off investors is the presence of gatekeepers in critical parts of the supply chain.  By "gatekeeper" I'm referring to a person or company that can prevent your business from obtaining access to resources that your business is dependent on.  If you need another party's permission to obtain access to key resources (e.g., distribution), your company faces the risk that it will not have access to those resources (the gatekeeper might say 'no') or that it will be charged a heavy toll in order to access them.

One classic example of gatekeepers existed in the mobile industry in the days before Apple opened up the iPhone platform to developers.  In 2007 and before, many entrepreneurs creating applications for mobile phones needed the permission of Verizon, AT&T or a few others in order to launch their companies.  Without the approval of these giants many of these entrepreneurs couldn't deliver their products to consumers.  Those that received permission paid a high price for access to their mobile networks since Verizon and AT&T had significant negotiating leverage.

It's worth noting that concentration in the tier of the supply chain that has the gatekeepers generally increases risk.  When there are fewer gatekeepers it's less likely that entrepreneurs will get the deal that they want, as 1) the entrepreneur simply has fewer chances to close the deal and 2) gatekeepers that face less competition are less motivated to take risks and new businesses or new ideas. 

Fragmented tiers of a supply chain can also create gatekeeper problems for entrepreneurs.  If competitive pressures are limited, gatekeepers may not explore new opportunities and may negotiate aggressively on pricing and terms.  The gatekeeper issue in un-fragmented markets can be especially problematic for companies that threaten the status quo of gatekeeper's marketplace.

The gatekeeper issue is one that investors pay a decent bit of attention to.  There are, however, ways to mitigate this.  The first way is to cut out the partners that you might have been dependent upon.  If your gatekeepers played a key role in distribution, sales or marketing, this might mean selling your product directly.  For example, in the days of the closed mobile platform some companies sought to distribute their product over the mobile web, alleviating their need for partnerships with Verizon and AT&T.  The other, slightly more obvious way, is to secure gatekeeper partnerships early-on before you invest much time in your company or seek to raise capital.

The more your company depends on partnerships the more calculating you should be thinking about how to mitigate the gatekeeper risk for your business.


1099ers: Outsourced Experience

The business ecosystem is increasingly specialized and
disaggregated.  Companies are constantly forming to provide
specific functions that once existed within every company.  There are
two reasons for this: 1) when companies provide a service at scale they
often can deliver better quality at a lower cost and 2) many companies
can't utilize an internal function at capacity – they're better off
sharing resources.

In my post, The Significance Of Gray Hair, I wrote about the importance of having experienced people managing the most complicated aspects of your operation.  Finding a balance between people who can offer fresh perspectives and those who can leverage their experience is important.  For many, however, hiring a seasoned executive into a full-time biz dev role isn't an option as executives can command higher salaries than your credit cards or seed round budget will support.  A cost effective solution to this is to hire these veterans on a part-time basis, in which veterans provide some coaching and open some doors.  Like any other resource experienced human capital can be shared across companies.

One of my friends, Peter Kestenbaum, just launched a consulting firm to do just that.  His company, the 1099ers (read Ten-Ninety-Nine-ers), is a swat team of senior level execs, each of whom has 15+ years of experience, that advises startup and growth stage companies.  With backgrounds from Sun, IBM, Oracle and HP a 1099er can serve as an outsourced biz dev team or Rolodex for hire.  For those interested, they also have expertise in grabbing stimulus money.  In a nutshell, the team mainly comprises long-time business development execs who aren't willing to settle into retirement and therefore work part-time for startups. 

Finding the right resources is a constant challenge for entrepreneurs.  The 1099ers are another part of the ecosystem that entrepreneurs should know about.  I have attached their flier below.