Building Better Businesses
A look at the day’s technology headlines will often yield a wide variety of stories about startups. Like a technological gold rush, it is obvious there is something of a space-race between venture capital firms, investors, and angels to find and fund potential new businesses online and on the cloud. The flaws in this shotgun-spray approach are numerous as statistically many of these startups are doomed to fail. In fact, according to Forbes, nine out of ten startups will inevitably fail. This is because banking on unproven concepts, consumer adoption, and timing simply introduces too many variables.
While some companies are satisfied with the existing venture capital model, there is obviously a need for refinement. One company working to uniquely reduce investment risk is Momentum Ventures. Based in Montreal, Momentum Ventures actually takes pride in being a self-described “anti-venture capital” firm says CEO Matthew Keezer.
“We are not bankers, brokers, or investors,” says Keezer, adding ”venture capital to me is essentially a capital investment crapshoot and feels like a disconnect from the process of actually building good businesses, where as we build successful brands and products based on proven business models.”
The strategy is rather straightforward. Rather than focusing on the idea, Momentum Ventures actively seeks out exceptional business leaders who will build teams and run online and cloud-based companies built around proven business models. This process, which unfolds entirely out of Momentum Venture’s home office in Montreal, has resulted in the successful launch of seven unique brands in seven attempts since 2007, a perfect record.
A prime example of this plan in action is FlightHub. Launched in 2012, FlightHub was built and designed to be the best online travel agency in the marketplace by observing the competition, identifying its weaknesses, and exploiting them. Since its launch, FlightHub has become one of the top online travel agencies in North America, producing over $1.5 billion in annual sales and employing over 400 people worldwide. Other businesses under the Momentum Ventures banner include businesses in the online streaming, ad-serving, and marketing sectors.
By focusing on personnel as the common denominator in successful business building, Momentum Ventures has created a new and successful model for creating profitable online and cloud-based companies. While traditional venture capital firms will from time to time launch extremely lucrative businesses, Momentum Ventures, and its unique approach to business building, has proven that its investment model is statistically more efficient.
By Keith Holland