I’m entertained by Business 2.0’s new contest (?) whereby various namebrand VCs have posed business & technology problems around which they would like to see companies built. The ideas range from a co-op service for banks, to fraudproof credit authorization for cellphones, to a better purchase recommendation engine, and so on.
Will anyone bite and send in plans to the various VCs apparently dangling $50mm in cumulative cash for building companies in these areas? Of course. And will any of them get funded? Almost certainly.
But that’s not the right question. The right question is, “What do VCs known about picking the right areas in which to build companies?” Note: I’m not saying they can’t pick the right investments; I’m just suggesting that there is a world of difference between picking the right team & investment from those that come wandering by, and actually timing & choosing the right greenfield market opportunity.
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VCs have been incubating products and companies for the longest time, essentially bringing together ideas, talents and capital – and in a few cases, they have built companies to fulfill market requirements that they had spotted, and did not find a suitable opportunity for.
What is more unusual is the fact that they put the ideas out in the open. We’ll see.
And there is a boatload of money to be made with at least one of these ideas, but finding the right mix of talent is challenging.
Hey Jeff — You’re far more optimistic than I am. While I applaud the idea of venture guys coming clean with what they think are fundable ideas, I’m still a skeptic. Having sat through (and on) enough “Next Big Thing” panels to last me five lifetimes, I can say with high confidence that most venture folks wouldn’t know the Next Big Thing in technology if it climbed up on the stage and planted a wet kiss on their khakis.
Am I saying that all venture folks can’t pick specific opportunities around which to build future companies? Not at all. Most can’t, but it would be unfair of me to say they all can’t do it. Just most of ‘em.
Hey Paul. I LOL’ed on trying to picture the “most venture folks wouldn’t know the Next Big Thing in technology if it climbed up on the stage and planted a wet kiss on their khakis”.
I don’t think I disagree at with your argument (how could I ?) but I wanted to point out that you left the (few) exceptions that exist out of the argument.
And on the one opportunity that I am quite clear on (because I worked on a similar project recently), it is a very promising one – but I am not sure it is a project that should be funded by VCs (damn’ed).
Business 2.0 $50MM Giveaway
So I was reading my copy of Business 2.0 and I ran across an article called "The $50 Million Giveaway". The premise of the article was interesting – 11 venture capitalists had 11 business ideas they are dying to bankroll – email them e…