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9th Mar 10
Jonathan Cavell
Image via tigerprises.com
Being a VC is all about learning to invest in companies that are fulfilling a market need in an innovative way (Ok, part of it is about identifying management teams that know what they’re doing but I’m ignoring that part for now). How does one go about the skill of identifying the types of technologies that will hit it big? I see two ways:
- Jump in and be an investor. Interview companies, listen to their pitch. Let them tell you about the niche they’ve identified and how they plan to address it. Invest a bunch of money and see if you’re right.
- Be a good early adopter. Build a suite of hardware and software that you use every day. Follow a blog like TechCrunch or TechMeme and as new technologies come out decide whether or not they fill a gap in your portfolio.
Both of these give you practice doing a structured analysis of technology tools. They require not just looking at the pretty pictures on both the website and in the sales pitch, but sifting through the BS to determine what the true value of the product is. The difference? You’ll need a couple million dollars in the bank to do the first and you might lose all of it. Where do you think you should start honing your skills?
