When you invest in venture capital, you invest WAY ahead of the adoption curve. You envision the way the world will be and write a check. People are not great at predicting the future, so it’s one reason many companies fail.
I see people talking about and investing in “The Future of Work” now.
The big money has been made (and lost) in that sector. Zoom, co-working, and companies associated with it were started in 2007-13. If you are writing checks now to the future of work you might make money but it will be a marginal return.
If you want to invest in seed-stage companies you need to:
think really hard about the future and what it will look like
read some forward-thinking books
Understand some basic precepts of how people work/think/act and the best systems to enable it. John Locke is a good start here by the way. Adam Smith is another.
Look at the history of some hyper-successful companies over the last 100 years and see what pitfalls they encountered and what the underlying conditions for them to startup were. What really drove their growth?
Listen to lots and lots and lots and lots of pitches.
Listening to lots and lots of pitches is crucial. Why?
Not because you are on the precipice of writing a check at the end of every pitch. It’s interaction with people and picking up the way they are thinking. It gives you a window into a world that is different than yours. It helps you take a kernel from their pitch, take a kernel from another pitch, and massage your personal thesis.
Also, sometimes, a company comes across your desk and because you have all these unrelated kernels in a sack, this entrepreneur puts it all together and you are ready to get on board with them.
Sidenote:
I have been driving through rural America. Left Grand Marias, MN yesterday and made it to Lincoln, NE. Headed as far as I can go today.
People are hurting. You can tell.
'Future of work' is a pretty broad topic. To the degree that it is about video meeting systems of the Zoom variety, I'd say it's over: Zoom has won, at least for the next 5 years or so. How about workflow/collaboration systems?..probably, the easy money has been made, but there do exist more opportunities.
Systems for remote monitoring and control of physical operations? Remote surgery has been much discussed (surgeon manipulates robotic controls that may be thousands of miles away), not sure if there's any of it going on. Telemedicine, enabled by sensors at patient's home or worn by him: probably a lot of opportunities. Factory work, with semi-automated processes monitored by low-cost workers in Vietnam or India?
The FAA is experimenting with remotely operated air traffic control towers: cameras at the tower location, big video screens at the controller location. (Not as radical as it might sounds; radar-based controllers (approach/departure and regional center) are already usually remote from the radar and radio antennas that provide their link with the aircraft.) Doubt that we're going to see controllers working at home ('Please hold on a second, Delta 524, I need to see what the dog is barking about'), but we could perhaps see remote-work centers in low cost-of-living areas with nice lifestyles, so that being a tower controller for Leesburg VA wouldn't mean you'd actually have to *live* in or near the DC metro area.
“Listening to lots and lots of pitches is crucial.” Sounds a bit like Shark Tank, hopefully without the theatrics. But on a more serious note: How do you determine that a presentation or pitch aimed at the future is not based on dreaming and hoping, but more on building and achieving?