Aspiring Web 2.0 Companies � Listen Up!

If that�s you, I�ve got a great article for you to read that ran in this week�s Globe & Mail Small Business section.

It was written by Sean Wise, and is a timely follow up to the Mesh conference that ran this week here in Toronto. Sean is the Managing Director of Wise Mentor Capital, a unique practice based in Toronto that has a lot of experience helping tech startups. There's another thread here as well. Sean is very active in the VC community, and was a major force behind last week's Canadian Venture Forum, which I attended last week here in Toronto.

The premise of the article is the importance that VCs place on management capabilities when considering funding a company. Based on some extensive research conducted by Ernst & Young with over 500 companies, the article distills some key competencies successful startups have.

At the most basic level is the Talent Triangle � Business acumen, operational experience and domain knowledge. All of these elements are critical, and the article does a nice job to articulate why each is so important. This forms the base of a broader model of business success titled BODCAT, which layers three things on top of this triangle � Consultation, Authority and Trust. For management to be effective, there must be consultation among 3 functional areas that essentially reflect BOD � business acumen (CEO), operations (COO), and domain expertise (often CMO or biz dev). On top of that, each must have authority and trust. Otherwise, good decision-making will be very hard to come by.

I wish there was more discussion about the importance of financial management in the mix. After all, the VC is giving them gobs of money to make their business grow! However, good management is at the heart of any successful business, and Sean�s message is a good one for anyone thinking of jumping into the Web 2.0 milieu thinking this will be easy.

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