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CIO Quick Takes: How to evaluate startups

Dan Muse | Dec. 10, 2015
With new technology moving faster than most CIOs can train staff and recruit talent, it's obvious why working with startups is an attractive option. But how can IT leaders tell which rising stars will prosper and which will fall? Four CIOs share insight and advice.

Frank J. Sirianni, PhD, vice president and CIO, Fordham University

Frank J Sirianni, Ph D, vice president and CIO, Fordham University
Frank J Sirianni, Ph D, vice president and CIO, Fordham University

"The product or service should fill a gap in the market and have some differentiating characteristics from similar offerings. What is it? How does it work? What makes it better than other solutions? This is both a market and investor variable. If it makes sense, it should appeal to investors the way it appeals to the market. It is either exciting or not.

"Who are the movers and shakers of the initiative? People, passion, position. This may sound trite, but it is not. The proper combination of visionary, operational, and market savvy skills are necessary, if not sufficient for success. Commitment and low or deferred compensation should go without saying."

"Another item I would consider is the current annual revenue against funds invested. Assuming commitment from the entrepreneurs and low margins, the company's revenue should look something like the investment in."

Angela Yochem, CIO, BDP International

Angela Yochem, CIO, BDP International
Angela Yochem, CIO, BDP International

"First, the startup needs to offer a differentiating capability for my business. Startups that have potential to significantly enhance our existing business lines, or create the foundation for an adjacent business line, will get my attention.

"Second, I look at the startup's willingness to engage creatively with our company, and how flexible the startup can be. Third, the people behind the pitch will be partnering with our business, so they must be transparent, perceptive, skilled in complementary ways, and have the ability to deliver game-changing offerings to our customers."

 

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