Technology
Technology is not a zero to one problem, if only because that first proof of life ≠ job done.
Innovation is neither black nor white, but rather endless grey. There is ambiguity, uncertainty and innumerable factors outside of one's own control. Filled with nuance - like art - it requires judgment.
That said, there is a hierarchy of value and an implicit Goldilocks problem. Services scale. Products deliver customer value. Meanwhile novel, pure invention protected through IP (absent commercialization) doesn't buy more than the right to be sued.
"Just right" defines investable. Venture has historically funded software, fabless semiconductor and other high margin & low CapEx approaches. Sure, a few folks do hard tech these days; billionaires fund moonshots. Any four letter word can buy Chinese scooters, build an app, and either sellout to an auto OEM for $100s of millions or achieve $1-2 billion private valuations.
An average venture capitalist is more momentum trader than profit. It pays for others to think she's right, early. Subsequent valuations increase her mark-to-market book, and that's how the next fund gets raised. But a VC need not actually be right, so long as not last to the party (much less doing Whip-It! alone in the corner). Venture exists to make money, not to build companies or to have impact.
Park the sugary sweet Gartner hype cycle dynamics for a moment and go back to the list at the top. Invention lends differentiation. Integration into a better widget (ideally first) yields customer value. Services scale that value into ubiquity. Turn that crank enough times and the enterprise thrives.
Instead of starting with services or material science, work the problem middle out from the customer's perspective to build enduring value.
Innovation is neither black nor white, but rather endless grey. There is ambiguity, uncertainty and innumerable factors outside of one's own control. Filled with nuance - like art - it requires judgment.
That said, there is a hierarchy of value and an implicit Goldilocks problem. Services scale. Products deliver customer value. Meanwhile novel, pure invention protected through IP (absent commercialization) doesn't buy more than the right to be sued.
"Just right" defines investable. Venture has historically funded software, fabless semiconductor and other high margin & low CapEx approaches. Sure, a few folks do hard tech these days; billionaires fund moonshots. Any four letter word can buy Chinese scooters, build an app, and either sellout to an auto OEM for $100s of millions or achieve $1-2 billion private valuations.
An average venture capitalist is more momentum trader than profit. It pays for others to think she's right, early. Subsequent valuations increase her mark-to-market book, and that's how the next fund gets raised. But a VC need not actually be right, so long as not last to the party (much less doing Whip-It! alone in the corner). Venture exists to make money, not to build companies or to have impact.
Park the sugary sweet Gartner hype cycle dynamics for a moment and go back to the list at the top. Invention lends differentiation. Integration into a better widget (ideally first) yields customer value. Services scale that value into ubiquity. Turn that crank enough times and the enterprise thrives.
Instead of starting with services or material science, work the problem middle out from the customer's perspective to build enduring value.
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