Slashdot Mirror
20 Tech Ideas VCs Want to Fund
An anonymous reader writes "CNNMoney reports on the top 20 technology ideas that our beloved VCs want to throw money at. Are these the brilliant ideas that will change the world (and make you rich in the process)?" From the article: "Delivery of new types of Web search to mobile phones. Google, Microsoft, and Yahoo are all taking a swipe at this, but Rimer believes they're betting on a losing strategy by simply shrinking their existing desktop features into a handheld package. He says he's willing to invest in new search applications that, for example, depend as much on voice recognition as on text input and would offer up everything from shopping and news headlines to driving directions and restaurant reviews with a few voice commands and keystrokes ... What he'll invest: $2 million for a working demo application."
The thing about all of these ideas is that they are not really very interesting or innovative. No slam on any of the VCs involved here (particularly the Draper Fisher Jurvetson folks as they are top notch), but these ideas are all about derived markets and products. It seems that the VC world has gotten lots more conservative over the past five years or so and they are looking at giving larger amounts of money to easier/simpler concepts rather than encouraging real cutting edge research.
This of course is a major problem as the US has historically relied upon federal funding to help develop the real cutting edge stuff, yet federal funding for basic science research is being cut dramatically in favor of applied research. So, we now run the risk of losing out on our technological advantage from both traditional government funding and now private funding. (notable exceptions for a number of philanthropists such as Paul Allen, Bill Gates, John Moran and others).
It's harder for VCs to find basic science research projects that have a significant payoff, but the projects are out there. We're banking on our technology and approaches to an area of bioscience and metabolomics to pay off in a variety of spaces from agronomics to medicine, drug development, defense and nutrition among many other applications, but I've found most VCs to be remarkably limited in their approach preferring to focus only on the short term, 1-3 years, rather than the 5-6 necessary for many projects. Its an old story, but focusing on the short term is a good business model where you invest 50% of the capital (or less) for 70-80% of the profits only after 80% of the work has been done. Unfortunately, you miss out on prospects for real impact by focusing on the next marketing tool rather than the next disease cure.
Visit Jonesblog and say hello.
Every major provider in US (Cingular, Verizon, Sprint/Nextel, T-Mobile) offers Internet access on phones, and most of these providers offer broadband connectivity already. The remaining ones plan to launch it within months. Not many people use it because, well, content is mediocre.
Are these the brilliant ideas that will change the world (and make you rich in the process)?"
They may change the world and the certainly will make somebody rich if they do succeed, but that person will probably NOT be the poor developer or inventor who came up with the idea in the first place. They don't call it "vulture capital" for nothing you know. If the idea or invention is a spectacular success then the inventor may receive some millions after the financiers have received their billions. Remember what happened to the inventor of the blue LED...there is a lesson to be learned there.
Draper thinks there's an opening for a startup that can deliver most of the benefits of standard Big Blue products without millions of lines of code or an army of consultants and IT managers. "I'm not sure yet what this company would look like," Draper says, "but it would not have the technology baggage of the entrenched monopolists. If it can penetrate the market cleverly like we did with Hotmail and Skype, it might not take that much funding."
What he'll invest: $3 million for a working application
And if the folks at Postgres are smart, they've just found a way to add $3MM to their foundation funds with a simple email...
Kidding aside, one thing that _would_ be interesting to see--high-quality, moderate cost OLAP analytics engines, preferably running ROLAP on top of an engine such as PostgreSQL. Maybe they're out there, but I don't see much of them (other than Mondrian). As the commercial OLAP market is structured now, it's hard for midsize companies to justify the outflow for decent analytics. No lack of demand though, just need something at the right price point...
True, but a heads-up display is the wrong answer to the wrong question. What we need is a transparent backlight with an LCD windshield (or an OLED windshield). I'll explain.
With an LCD windshield, coupled with a sufficiently advanced computer and external cameras, the car could use overlay boxes to alert the driver to potential hazards. For example, it could alert the driver to pedestrians standing beside the road, large animals beside the road, police motorcycles sitting in the bushes, etc. All of these things represent potential traffic hazards, as any of these things could suddenly go from being beside the road to being on it very quickly. (I know that law enforcement would hate this because of the reduced ability to set up speed traps, but the improvement in overall safety is hard to dismiss, and might even make speed limits less critical except in inclement weather.)
Even better. by combining it with cameras in the car to measure the position of the driver's head, since the entire windshield (and, ideally, the side windows) would be LCD panels, you could do other things like darkening a small portion of the panel so that the sun is reduced in brightness to a more manageable level on a bright, sunny day. Ditto for overly bright car headlights, the light bridges on police cars when they park next to road construction (yeah, like being distracted by bright, flashing lights is going to make me drive BETTER!?!), and so on.
Finally, this would be one step towards having fully automated driving. As the reliability of external threat detection improves, it will eventually evolve to the point that people don't actually have to touch the wheel except in the event of a computer failure. That's many years down the road, but you have to crawl before you can run.
Now, this doesn't necessarily mean that a heads-up display isn't a good idea for reducing driver distraction. Maybe it is, maybe it isn't. But any such technology should be combined with what I'm describing here to maximize driver safety FIRST, then reduce distraction as a side effect.
Check out my sci-fi/humor trilogy at PatriotsBooks.
$5 million for a working game or site that shows MMO growth potential. "It's so hard to predict what will take off," Gurley says, "that it's easier to pay more for something that's further along."
I've thought about this type of thing for a long time. There are several open source gaming engines out there, including fully functioning, community driven, MMORPGs. He mentions that it is easier to start with something further along. A few million spent on some full time developers for bug fixes and a few million on artwork and story development and a few million spent on setting up servers/bandwidth and getting marketing agreements and this sort of a setup could really take off. I say, harness the online community's desire to make things and profit on your stories and advertising.
Here's what I envision. Build one of these engines so that it accepts modules which are artwork+story in a new, open standard format. Run a site providing a short, pro quality game supported by ads. Try to get every company you can to bundle it on computers they sell and OS's they distribute. Aside from the advertising in the client/site, you sell closed source pro dev tools (with a freeware version). You sell new modules at a fraction of the price other games cost (lesser by the reused code cost). You provide free hosting for other people's modules they want to sell (a percentage off the top).
The mod community would go nuts for something like this and if you snag one of the existing cross platform engines, a lot of your work is done for you and you can reach the mostly latent linux and mac mod crew. And, seeing as the engine is open source you get free bug fixes and improvements from the open source community. I think you could make a fortune and undercut everyone. Too bad I'm too busy to put this together. Someone please, steal this idea.
As pointed out, the quantities of money, while sounding impressive to people who are not well aquainted with this type of business, are actually rather low in terms of what it really would cost to get a team of software developers to get something like this put together.
My experience is that most people who don't directly understand the costs of software development underestimate the actual cost of development by only willing to pay about 5%-10% of the real world cost, especially if you are talking a full life-cycle in terms of development, maintainence, and archival for retrival in case something goes wrong and the ancient stuff needs to be hauled out of mothballs.
When spread out over a number of customers the cost can be lower per unit, but there are only so many software packages that can be sold simultaneously to millions of customers. Bill Gates didn't become a billionaire just because of one single software package.
A good, tight, and well discliplined software development team of between 5-10 programmers can easily burn through $5 million and still have rags on their kids and clunkers in their driveway, especially if spread over 3-4 years. And the investors would really wonder what happened to the money when all they have to show for it is a lousy CD-ROM filled with source code and an expired lease on some obscure office park with broken windows and police crime tape.
That is if you have somebody who is also willing to let the software development team do its job and not get in their way, and you let them get that fleabag office space or try to do it in a garage that you are renting for $50/month. If you want to impress other investors and do show and glitz, or try to blow money to puff up your prestige, fancy office space can even chew through more money than salaries. Then the management wonders why the programmers are buying computers from the local thrift store.
Heaven help you if the main investor decides to get involved with day to day affairs, even if they are a software developer themselves. Only if that investor is also acting as a lead designer and doing substantial amounts of software development can you really trust them to understand the situation.
Yeah, I've seen it all in this regard and worse, even from those who think they understand software development. Usually it isn't too extreme like I've described and most small software development shops are only semi-mediocre in terms of where they are located at, but the extremes do happen.
You are completely correct that once the day of reckoning comes (whatever that may be called or described) the number 1 thing that these investors are interested in is increasing value, the apparent value.
From my own experience in getting involved with a major software startup, unless you are the primary investor you are likely to get screwed over unless you also hire an attorney right at the beginning before you even start writing the first line of code. You might be lucky and have an "honest" senior investor, but don't count on it and more people are likely to lose their shirt... even from investors that are otherwise decent human beings.