Earlier this week, my friend Alastair Goldfisher from the Venture Capital Journal invited me to participate on a panel as part of Venture Alpha West 2014 in Half Moon Bay. I didn’t know what to expect, but randomly, I bumped into a bunch of old friends, saw Renee DiResta and Matt Withieler speak on hardware, and the topics overall touched on my two core areas of interest: investing and mobile technology. Here are some brief notes from the event:
Hardware: OATV’s DiResta gave a keynote on the rise of the hardware maker movement and what she expects to unfold over the next 3-5 years. Flybridge’s Witheiler was on a panel discussing how VCs leverage crowdfunding platforms to estimate consumer demand and then use online channels to sell goods directly to customers. Having had the luck to invest in hardware companies like Coin, Navdy, and Skylock, I see the potential though still remain scared about distribution after the Nest sale. My biggest takeaway on hardware from the event is that enterprise-focused and/or commercial grade solutions for hardware are likely a much more attractive investment category given the pain of consumer distribution and price points.
Wearables: There were many panels on wearables. I’m a bit of a Grinch here, sorry. Apple’s Watch aside, I think the idea of wearable technology is cool, but I don’t see consumers flocking for this. Yes, there will be commercial applications like Nike Golf or putting sensors on delivery-people, etc. But, so many new sensors and APIs from the iPhone replace so many of the first generation trackers. So, I’m a wearables Grinch. I know, I know. But, I need to be convinced, so I’m open to your best arguments. Send ’em my way!
The LP View of VC Today: Feel free to stop reading here. Yes, more conversations with the LP world. What I took away from my time here was that (1) there’s a lot of money waiting on the sidelines to invest in venture and/or directly in startups; (2) many LPs are concerned about the valuations that VCs are paying right now; (3) yet they remain excited about the early stages of venture, which are not impacted by macro concerns. Innovation never stops. Most of all, LPs seem to be obsessed with either networking their way into investing in the biggest brand name funds; if they can’t, they try to find strategic value (stage, sector, geography) with the hopes of balancing their own portfolios. They’re also more and more interested in Opportunity Funds to invest in follow-on rounds and take some pro-rata, as well as investing directly into companies alongside their VC fund managers. (The issue that arises here is many of these FoF or institutions aren’t set up to conduct their own due diligence in a short period of time to vet the opportunities, but nevertheless, the existence of VCs in many cases is also being called into question. It’s the wild west!)