That does make sense. Investor & Founder time is limited, technical due diligence on the investor side takes too much time.
I'm coming more from a founder perspective though, and I think there's some dangers with the mindset as a founder, and I see it with a lot of people in the chinese startup community.
Whilst as an investor, one might get to play a bit fast and loose with technology choices, I believe that as a founder doing so is suicidal. I see startups here struggling to hire PHP programmers because they made the decision to go with PHP because they heard it was easy, and later on realized that that may have been a mistake. They try to smooth it over with funding later. PHP programmers over here have the same reputation. They learn it because they thought it was easy, and that there's a lot of companies desperate for that skill. It's a match made in hell.
Similar boneheaded decisions, preventable with a week of due dilligence reading, are made by founders here all the time. One thing I found interesting is that the people making these kinds of calls are always working on C-list ideas. It's always derivative businesses in markets that just don't care. They need to get their MVP out fast and half baked because what they're working on should have died on the drawing board. They're desperate for investor money because they think it will patch over major errors they've made up to that point.
Some of these ideas are salvageable. It usually requires restructuring on both the business side and the technology side, preferably to the point where they make sense as an integrated system. One guy I was working with, his startup is trying to create a site for farmers and rural Chinese to sell things on that, and that is so interesting, Alibaba jumped into the ring recently. Now he has a dinky site that does not solve anyone's problems. It's a website, which is greatly hindered by the fact that most villages have a single computer, and the people who wanted to trade with each other would sit at that computer, together.
I suggested to him that he change things up a little. Small farmers do suffer from information asymmetry with the people they're selling to. Technology wise, most of them have non-smart phones, but China Unicom is rolling out mobile coverage to rural China, because that's their market tomorrow. So, provide informational and automated brokering services over a website on the buyer end, and an SMS gateway on the seller end. Ship the FAQ on actual paper.
Allow farmers to post their wares with a formatted text message, have offers coming in an hour later, goods shipped the day after. Give them a reason to upgrade to smartphones, pack in more features on the app once data becomes cheap. Do agricultural futures 5 years down the line, in one of the hungriest economies in the world.
The part where technology makes this interesting is that it allows you to reach a market segment that is unreachable over conventional means. Innovation is the edge startups have over large, well funded enterprises. Founders ignoring that side are blindsiding themselves to half their business.
I'm coming more from a founder perspective though, and I think there's some dangers with the mindset as a founder, and I see it with a lot of people in the chinese startup community.
Whilst as an investor, one might get to play a bit fast and loose with technology choices, I believe that as a founder doing so is suicidal. I see startups here struggling to hire PHP programmers because they made the decision to go with PHP because they heard it was easy, and later on realized that that may have been a mistake. They try to smooth it over with funding later. PHP programmers over here have the same reputation. They learn it because they thought it was easy, and that there's a lot of companies desperate for that skill. It's a match made in hell.
Similar boneheaded decisions, preventable with a week of due dilligence reading, are made by founders here all the time. One thing I found interesting is that the people making these kinds of calls are always working on C-list ideas. It's always derivative businesses in markets that just don't care. They need to get their MVP out fast and half baked because what they're working on should have died on the drawing board. They're desperate for investor money because they think it will patch over major errors they've made up to that point.
Some of these ideas are salvageable. It usually requires restructuring on both the business side and the technology side, preferably to the point where they make sense as an integrated system. One guy I was working with, his startup is trying to create a site for farmers and rural Chinese to sell things on that, and that is so interesting, Alibaba jumped into the ring recently. Now he has a dinky site that does not solve anyone's problems. It's a website, which is greatly hindered by the fact that most villages have a single computer, and the people who wanted to trade with each other would sit at that computer, together.
I suggested to him that he change things up a little. Small farmers do suffer from information asymmetry with the people they're selling to. Technology wise, most of them have non-smart phones, but China Unicom is rolling out mobile coverage to rural China, because that's their market tomorrow. So, provide informational and automated brokering services over a website on the buyer end, and an SMS gateway on the seller end. Ship the FAQ on actual paper. Allow farmers to post their wares with a formatted text message, have offers coming in an hour later, goods shipped the day after. Give them a reason to upgrade to smartphones, pack in more features on the app once data becomes cheap. Do agricultural futures 5 years down the line, in one of the hungriest economies in the world.
The part where technology makes this interesting is that it allows you to reach a market segment that is unreachable over conventional means. Innovation is the edge startups have over large, well funded enterprises. Founders ignoring that side are blindsiding themselves to half their business.