Link: The Founder’s Guide to Understanding Investors
“There are very disruptive technology shifts that occur from time to time and a small number of companies ride the wave created by these shifts. Through a combination of luck, skill, and timing, they produce huge outcomes that were just meant to be.” – Mike Maples (an early investor in Twitter, Okta, and Twitch)
Evaluate where the world is at in adopting the technology you are leveraging. You need to be selling to users when the adoption rates are quickly growing.
The top VC backed companies of today rode a major shift in the way we use technology. Apple (smartphones), Google (online search), Microsoft (personal computers), Facebook (social networking), Amazon (e-commerce), Netflix (online media and entertainment).
A proxy for upcoming technology shifts is buzzwords. Buzzwords are used to describe completely new and different types of technology people can use. Previously common buzzwords were terms like e-commerce, search, and social media, and my favorite ‘the cloud.’ Today, common buzzwords include virtual reality / augmented reality, machine learning / artificial intelligence, and blockchain/crypto.
When I moved to Silicon Valley, I despised buzzwords. Buzzwords are thrown around recklessly here and the ecosystem as a whole is rightly mocked for it. But I’ve come to learn there is a reason why people use buzzwords: if they work as claimed, they have grand slam potential.
Not all buzzwords will fulfill their potential and result in a disruptive technology shift though. As a founder, you can reduce this risk by avoid starting a startup on that shift until the technology adoption is growing quickly and reaches a multi-hour per day level of usage. Sam Altman expands, “It’s very hard to differentiate between fake trends and real trends…If you think hard and you really pay attention, sometimes you can. The metric I use to differentiate between a real trend and a fake trend is similar to loving a product. It’s when there is a new platform that people are using many hours every day.”