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Examples from real life of Becker Consulting Services

1. Trust the new technology? - The beautiful face and the dirty underwear…
2. Trade restrictions? - The jewel in the fortress and the golden dragon
3. Shortcuts to profit? - From larvae to butterflies with a minimum of cocooning – or how to avoid dangerous temptations

Is the flashy new technology really sound and competitive?

The beautiful face and the dirty underwear…

No Name Company turned to an investment banker for financing. The investment banker saw no reason to doubt the viability of the business concept, business plan etc. They were, in fact, quite confident and embarked on a tour around the world to visit numerous potential investors. They did impressive, flashy presentations at the most elegant conference locations, together with the inventor of the product. Champagne and luxury canapés were served. Investors were enthusiastic and provided a flood of money. 

All set for excellent business, one might think. 

We made a quick analysis of Carinet, because we were rather impressed and interested ourselves. It took us a day or two. We ended up with quite a number of questions. They concerned serious flaws in the software itself, considerable difficulties for the internationalization of the product and marketing on other markets as envisaged, information security flaws, and other problems. We reported our findings to No Name Company. They were grateful and apparently embarrassed. We did not hear from them for a long time. 

What happened? Well, the company fairly soon got into serious trouble. They could not deliver the product as promised, in spite of having lots of orders and interested customers. The money invested was spent, to no use really. 

After a while, the investment banker got into even worse trouble and eventually went down the drain. This could of course have other explanations as well. Obviously, the investment banker should take a considerable blame for the failure. Similar disasters have hit many other venture capitalists that invested too indiscriminately during the IT boom. Consequently, many enterprises and private investors had to bear significant economic losses. 

Conclusion

• Even the prettiest woman may be revealed with dirty underwear…
• Even the glossiest business plan may hide a sloppy invention.
• An economic and management minded analysis of a business concept is not enough.
• To be satisfied without fully understanding the lingo of the computer nerds, just because they tell you to trust them on important strategic issues, simply will not do.
• The assertions of the inventor, no matter how trustworthy he or she appears, are definitely not a sufficient basis for a scientific assessment of a business concept.
• To ask only one technical source of expertise is not enough.

If the investment bank had asked Becker Consulting at an early stage to give a second opinion on Carinet, the story might have had a happy end. At least for the investors. Probably also for No Name Company. 

The investment bank would have had the advice to either refrain from investing or raise adequate conditions for the investment. If the bank believed in Carinet’s potential, it might have contributed to Carinet’s future success by prescribing coaching services from Becker Consulting to No Name Company. Thus, Carinet could have been developed into a trustworthy product, ripe for internationalization. 

Certainly, the heaps of money invested here could have come to better use

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Is it safe to use a sensitive encryption component from the US in the next investment in China?

The jewel in the fortress and the golden dragon

UTE had many worries: What about licensing requirements? How can we sort out the relevant parts of all that vast and confusing US legislation? How do we even find the correct information? Is there perhaps a total ban on US exports of such components, if the end user is in China? Might there be different rules depending on the status of the end user? If we can get the product to Europe, what about licensing from Europe to China? If we tell Cryptics about our plans, do we risk being put on the "black list" for future deliveries? If licenses are required, how do we get them? US authorities are huge and confusing, where is the right contact? What European authorities need to be contacted? Help… we are in a hurry… the contract with the Chinese customer is due to be signed in a few weeks!

Yes, the situation was indeed complicated and stressful. However, we had excellent contacts in Europe and the United States and undertook to help UTE. We worked day and night to use both European and US time zones. We acted as an intermediary for our anonymous European client in contacts with Cryptics and the relevant authorities in both the US and Europe.

Fortunately, we managed to solve all these problems of our client well ahead of schedule. From there on, a new chapter begins… Doing business in China is, indeed, very special and will undoubtedly give UTE many new and demanding challenges.

Conclusion

• It is exciting to challenge the golden dragon. If he gets the famous jewel from the well-guarded fortress in The New World, he might be more hospitable. However, it is wise to find out whether it is really worth the effort to conquer the jewel in the fortress, or whether just another gem might do the trick. The fortress is surrounded by almost impenetrable and possibly dangerous brushwood, as are the roads from there to the land of the dragon. Therefore, if you want to secure the jewel it may be wise to use an experienced pathfinder with the proper keys.

It may be a very sound investment to consult us before entering a new market.

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How do you make an investment sustainable when it takes years to develop the final product?

From larvae to butterflies with a minimum of cocooning – or how to avoid dangerous temptations

At the same time, competing technologies were emerging with frightening speed. It was a race, indeed. It required a steady and rich flood of money. SPE had recruited excellent staff and was working hard. Would SPE disappoint its investors or make it to the top? 

We were asked to assist in analyzing potential applications of the smaller scale, medium term technology. We carried out an in-depth research on competing technologies around the world, global markets and potential cooperation partners for one particular, possible application chosen by SPE. We analyzed our findings and provided strategic recommendations. We introduced SPE to a number of interesting contacts in this particular niche. 

We also, on request, made a specific invention for SPE based on their technology. We did a global patent search and prepared the documentation to be submitted to the patent lawyer. At a considerably lower cost than SPE would have had to pay for the corresponding services, if provided by a local consultant in SPE’s domicile country. 

Success story? Well, things happen very fast out there… Timing is essential, among other things. Our services were necessary for the strategic decisions of SPE. As it turned out, SPE in the end, wisely we think chose not to put their money on an application that would be subject to an almost impossible global competition and an uncertain market. 

For SPE, as far as we know, the question posed in the headline still remains to be answered. From our analyses, in combination with their own skilful strategic management, they learned enough to avoid some tempting but potentially dangerous adventures. Some of their competitors are now caught between a rock and a hard place. There are many ways to win a contest… 

Conclusion

• It is sensible to make serious efforts to minimize the cocooning stage of a new technology and try to earn money on it even if it has not yet reached its full potential.
• It is sensible to test new and potentially expensive ideas carefully, by asking for a second opinion.
• An investment may be wasted in no time, unless you have a sound basis for your decision, covering all significant aspects. 

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