Hipster VCs
Recently, a group of fancy kids from a fancy school back east dropped by OATV HQ to talk shop as part of their tour through Silicon Valley. The kids were super smart and the conversation was engaging.
At one point, I was asked about how we put together our investment themes and which trends we track. Implying that our portfolio looked, um, different than the other VCs they’d been meeting. As I wrapped up my rant on how we watch the alpha geeks and what people do in their spare time, one the students said something to the effect of “oh, so you’re hipster VCs”.
At first I was taken aback and bothered as there’s a certain smugness implied in a comment like that which harkens me back to a once popular tshirt on a once popular site. But, it also captures a tendency that I think is real and one that we’ve found ourselves susceptible to.
As VCs, we like the new. And we like to find the new before anyone else catches wind of it. And we like to be right about what has the potential to blow up in the future.
But, in doing so, we’re also susceptible to moving on to the new new before the old new has proven itself out or reveals all of it’s innate potential. And, we can mistakenly shut the window on opportunities just as (or because) other VCs and better equipped founders enter the market.
I was reminded of this all in a board meeting yesterday. The company in question is quintessentially alpha geek at the core and in a market we were able to spot before it started hitting the mainstream media. But they’re all showing up now and the market is getting even more exciting. As the founder relayed an application a customer of theirs was looking to build with their products, it occurred to me that the application in question wasn’t even possible until this very moment. And that it is only one of hundreds, thousands, or even more applications that this new technology and this new market can enable.
It’s one thing to spot a market early. It’s another to understand all of it’s nuances, quirks, opportunities and blind spots. To encourage and advocate for these markets, only to move on before they grow is a mistake we’ve been guilty of in the past and one we’re hoping to avoid in the future.
We may fund some companies that don’t exist yet, but we need to do a better job being a part of the new markets they create instead of busily off chasing the next new thing.
