A VC - Latest Comments in Only Ten Years Too Early

Re: Only Ten Years Too Early

christina viering — Tue, 07 Apr 2009 21:06:36 -0000

Did they have any testmarketing.

Re: Only Ten Years Too Early

fredwilson — Mon, 06 Apr 2009 16:59:26 -0000

This is exactly right Mike, as usual

Re: Only Ten Years Too Early

mfeinstein — Mon, 06 Apr 2009 15:12:30 -0000

I think that the biggest problem isn't being too early, but sticking with something that is 'too early' for too long. You don't really know how early something is until you see if the market develops as you thought when you invested. But, if it burns too much cash, you can get to 'sticking with it for too long' very quickly. If you are too worried about being too early, you can end up being overly cautious.
More here:
http://www.thefeinline.com/...

Re: Only Ten Years Too Early

Kontra — Mon, 06 Apr 2009 04:06:30 -0000

Just posted a long consideration of that in:

When is it “too early” for a new product?
http://counternotions.com/2...

Fred’s conclusion? “Beware of ‘way too early’.” This does sound like good advice, except perhaps when coming from a VC, especially when contrasted to Peter Drucker’s dictum, “The best way to predict the future is to create it.”

[...]

A decade ago PointCast became a canonical example of a product that was “too early” because we didn’t have pervasive broadband for a push service (though the company would have been a success if it didn’t refuse the $450M buyout offer from News Corp). Since then Apple and Google, among others, have taught us how to create the necessary conditions for their products to succeed by compressing time through strategic invention.

If VCs want to become indispensable to the companies they advise, perhaps they ought to remember that it’s “too early” only if you fail.

Re: Only Ten Years Too Early

Drjohnhennessy — Sun, 05 Apr 2009 20:04:42 -0000

Interesting. I've always had the phrase "be two weeks ahead of the market - and no more" running in the background as I look at technology. In the case of netbooks/IAN I think the key confirming event, the harbinger was the day my favourite coffee shop started to offer free WiFi connection. That signaled the technical and fiscal maturity of the infrastrcuture needed to make netbooks go.

Re: Only Ten Years Too Early

smcnally — Sun, 05 Apr 2009 12:00:50 -0000

The timing didn't didn't help, but there was difficulty focusing, as well.

I was working for Bill Kirkner at the time of the Virgin / IAN / Prodigy plans. Prodigy's thoughts we're on the (coming up or just passed) IPO, there were acquisitions and being acquired, rolling out SBC's DSL subs was a major initiative. Through all this, many ideas were being actively worked; some of them were actually good. Even with smart, good people, it's generally not effective to focus on too many things simultaneously.

So many ills of IAN device, as noted, could have been whitewashed with speed. Dialup at the best of times was not always the best of times. With new custom client software (the IAN device ran QNX, like Audrey, IIRC), rushing on hardware and software engineering, and at least three masters to serve, focus - and therefore quality - was difficult to maintain.

Ten years later, ubiquitous broadband, "always-on" connections, even more cheap, standard hardware and software to bend to your will, and we'll see how it works for AT&T.

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 11:14:14 -0000

We don't start companies, entrepreneurs do

So it's up to them to figure out that now is the time

We can react to that, but we can't initiate that

Re: Only Ten Years Too Early

kidmercury — Sat, 04 Apr 2009 09:35:07 -0000

hahahaha, fredbucks! definitely likely to have a more responsible monetary policy than the federal reserve's policy. and given the money you can make on exchange rates, it will be a great market to be in, as people look to jump ship from the dollar. then, using your influence, you can get merchants to start accepting fredbucks (and get a piece of all transactions involving fredbucks). toss in some rfid chips, cards, and readers, and you have the ability to use fredbucks in offline, "real world" transactions, thus increasing its appeal in comparison to federal reserve notes. it's the blog star business model!

just don't go on a power trip now that you're the central banker, like start printing money like crazy and robbing us and doing stuff like bombing us and blaming it on a guy in a cave in afghanistan and saying we need to pay you more and give up all our rights in order to be protected. if you do that, and if you start channeling the devil, i think we'll right back in the same mess we're in now!

Re: Only Ten Years Too Early

vruz — Sat, 04 Apr 2009 09:07:58 -0000

that sounds reasonable.

what's the approach you follow when it becomes apparent that *now* is the time for an old idea that was too early at the time ? revisit the old stuff toolbox, or search anew ? or is that left to entrepreneurs to come back anew according to their gut feeling ?

I have the feeling like an entrepreneur -- fraught with ideas and vision -- rarely has the huge self-restraint needed to wait until the time is right, and that's perhaps one thing where a wise, seasoned investor can help, because the entrepreneur will try as hard as she can to make it real, and in general that's the very best definition of what being an entrepreneur means.

to manage the 'tooearliness' risk is essentially to modulate the entrepreneuralism of the entrepreneur, and self-restraint doesn't seem to be enough.

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:57:11 -0000

I'm going to put a virtual currency on this blog just to make you happy kid

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:56:16 -0000

I can't help with your main question. Our current portfolio is most certainly full of ideas that are too early.

But I sure hope we won't have 10mm in them when we figure that out. The one thing I have figured out how to do is limit our capital at risk before knowing if the investment is going to work

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:53:13 -0000

Facebook and myspace were on time, not late

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:52:14 -0000

That office went on to house several other flatiron portfolio companies and one of them, return path, has emerged as a large and successful company

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:49:09 -0000

There are a bunch of things in our portfolio that are too early. But I'm not going to name names

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:48:12 -0000

I have a collection of devices in the bookshelf in my office and newton is there. Its important to stare at it every now and then. So much to learn from that thing

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:44:13 -0000

Hi ed. Thanks for stopping by and leaving a comment

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:35:11 -0000

Luck is a huge part of this. I pinch myself every day for luck and to remind myself of how lucky I've been

But being too late is a faster death than being too early and often less expensive

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:33:12 -0000

Or peoplePC. Lots of models have been tried and tested. Those who are doing it now have a lot of lessons they can learn on other's nickels

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:32:11 -0000

I haven't looked at your service because I am on a blackberry. I worry a bit about video selling. Video takes time to watch. I'll do that for entertainment but not for information. And selling is at its heart information transfer

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:30:09 -0000

So true. You can't miss the next big thing in the tech business or you are dead meat

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:29:11 -0000

He did. IAN was not alone. There were many variations on this theme

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:28:12 -0000

As I said before on the wave analogy, you do have to be in the water to catch the wave

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:28:08 -0000

I am still waiting for the first coming of IBOC ;)

Re: Only Ten Years Too Early

fredwilson — Sat, 04 Apr 2009 08:26:08 -0000

Kozmo was actually well timed. They were profitable in nyc and boston when they went under. It was the other 18 markets they went into that killed them. Two mistakes in one. 1) massive overexpansion at one with huge leases and an irrecoverable burn 2) most of those 18 markets would not have worked anyway because they lacked the urban density required for success

Re: Only Ten Years Too Early

Chris Dodge — Fri, 03 Apr 2009 21:36:43 -0000

I'm glad you brought up the Eric Clemons debate on TC. I too really enjoyed it, although some of his more points border a bit on conspiracy (e.g. Trademark extortion).

I've never been a fan for subsidized based revenue models (aka Display Advertising): a 3rd party tries (brand advertiser) to derive value from a transaction between the principals (producer and consumer) through basically subsidizing the costs of production and distribution.

I'd rather put it to the consumer to declare and recognize the value of what they are consuming. By consuming for free, there really isn't the conscious awareness that these freebies are really subsized by a 3rd party who has a separate interest in the interaction.

I view Eric's point that since the consumer really marginalizes the subsidy (and the corresponding marketing/branding messages), it's efficacy for the 3rd party will continue to erode. Plus all of the ad inventory which will just continue to drive down the yield rates.

I know that there's a long history for the subsidy approach: TV, radio, print advertising. So I'm not 100% sure where the breakdowns are occuring for online. Definately the inventory is a problem.

That's why I was such a HUGE fan of Radiohead's experiment whereby the challaged the consumer to declare what value he/she put on the music. It was BRILLIANT of an idea! For some it was 0.99 for the album, for others 9.99, others it was 0.0. I think, for me, I did 5.00 or so.

I know subscriptions are the kiss of death vis-a-vis traffic acquisition. Micropayments really haven't taken off, but are likely the right approach. I know I'd pay Pandora some money as it has terrific value for me. If they turn to audio ad inserts, not so sure how I'd react.