Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.
By Alyssa Royse
I spent a couple hours today with a friend who is gearing up to pitch. After shaking aside the Post Traumatic Stress Convulsions from even thinking about pitching, I found myself wondering why no one ever asks us, the startup junkies, what we would invest in.
So, let me ask you. What would you invest in? What would you run screaming from? What trends are you seeing that you think are brilliant? Or are moronic?
Now, in order for this little experiment in opinion expressing to work, we need to agree to some ground rules:
NO:
1. Name calling or calling out of names.
2. Promoting yourself or your company is tasteless and possibly against the law, don’t do it.
3. Discussing specific companies that actually exist.
DO:
1. Tell us what you think the next big thing might be.
2. Share your thoughts on emerging or evolving industries.
3. Riff on trends that you think are just stupid and somehow getting funded.
4. Tell us what the traits are that VCs should be looking for in people that they invest in.
In all cases, make your case, be smart, tell us why.
You’re the VC here. You have millions of dollars to invest, what are you looking for?
I’ll go first.
I would never invest in any Twitter app. Some of my reasons are simple – how can any company raise and spend that much money, amass that many users and still not figure out how to monetize? That strikes me as anything but a stable foundation to start attaching parasitic businesses to – especially when most of them have no clear path to profitability either. My fuzzier logic is that it’s all fuzzy. It strikes me as a trend that will soon be replaced, it doesn’t solve an actual problem for anyone and is contributing to the noise not the signal.
I would never invest in a company that claims it’s going to make money using micropayments for content. (But I would invest in a company developing that platform, because that could be useful for other things. And if micropayments work, I think it will be for a very short while, and there is money to be made on the aggregation of massive amounts of small payments – you know, like in Office Space. But I don’t think it will last long, and will not sustain a lot of small companies….)
I would never invest in a company that rested it’s success on a proprietary algorithm, because if one super smart geek can make a formula, so can another one. Without distribution, users and revenue, it’s an idea, not a business.
Not sure what I would invest in…… But I’m thinking on that. And I’m sure you’ll all inspire me….
Your turn. What boat are they missing? What boat are they investing in that you think is headed for an ice berg?
