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Can you predict the winners?
5 Comments Published in Uncategorized on 22 June 2011 by Carsten Koelbek
I have to admit that I am not sure I can predict the winners.
When I look at some of the most hyped ventures out there like AirBnB and Twitter then I am not convinced I could have predicted that exactly those companies would go on and have billion dollar potential.
AirBnB
Even Paul Graham from Y-combinator admitted that he first thought that the idea behind AirBnB was really bad, but he decided to accept the team anyway, because he saw potential in the idea. But honestly, how many people could have predicted how fast that company would rise? Some of my question marks would have been:
- do people really want to rent out their apartments/houses on a daily/weekly basis – what about the risk of theft?
- do people really want to stay in other people’s homes – seems to intimate to me
- how do you solve the ghost city syndrom – you really need a lot of “suppliers” before this service becomes interesting for the users
But hey, they did it. Amazing!
Twitter
Facebook was of course a good predictor that there would be more services within the space of sharing information about “what I am doing”, however, when I first signed up for the service I honestly felt it was a poor man’s version of facebook. Terrible look & feel and nothing really exciting. And no very obvious business model for the first many years – though here I must admit that the American’s are better in seeing the potential of growth companies and not worrying about revenues until several years down the line. Something I (and some other Europeans) could learn from.
Conclusion
The above examples illustrate to me how difficult it can be to predict the winners, and that is why I mainly focus on the team behind a startup and only secondarily look at the idea. And that is also why I love being involved with startupbootcamp where we have the chance to work with and nurture tens of startups (out of hundreds of applicants) each year in the surge for creating the next billion dollar company.
/Carsten
5 Responses to “Can you predict the winners?”
June 26, 2011 at 8:46 pm, Imran Rashid said:
Hi Carsten – thanks for an interesting blogpost.
If the idea isn’t that important, then what is it exactly in a team you would look for ?? The passion, experience, personality or something else?? And aren’t those things just as arbitrary as any idea-based selection criteria?
Being a doctor, who just recently turned into an entrepreneur I bring more than 6 years of intensive human communication and daily problem solving into my startup. But I didn’t come out of any business school and haven’t got any startup experience in the past. In my opinion being a fast thinker, highly ambitious and extremely dedicated is more than enough to accomplish any goal you set.
Does any of those things count in a VC world?
Best,
June 27, 2011 at 3:17 pm, Carsten Koelbek said:
Hi Imran
Thanks for your comment. I agree that it is not necessarily straight forward to judge people either, however, I think past results is a decent indicator of future success. And you just know when you meet those outstanding people who have so much drive and intelligence that they impress you again and again. Eventually, I believe such entrepreneurs will get success.
/Carsten
June 27, 2011 at 7:11 pm, Imran Rashid said:
From Crunchbase (http://bit.ly/jk3boa)
“…Before Airbnb, co-Founder Brian ran an industrial design shop in Los Angeles; even these days he is rarely seen without a drafting pen and sketch book in hand. Brian holds a Bachelor of Fine Arts in industrial design from the Rhode Island School of Design…” (!)
Sounds pretty hard to predict by any means unless you get the right fortune cookie…
Recently came home from the Valley as part of the Scaleit-trip. There I made some observations that sort of matches yours:
In my opinion VC’s should also be outstanding people with drive and intelligence impressing you over and over again… or isn’t that a part of the job description ??
/Imran
June 27, 2011 at 7:21 pm, Carsten Koelbek said:
he he. I do not know about you, but to me too many VC’s seem to be consultants and bankers who could not them self make a startup and are now sitting and handing out other people’s money while they take a steep salary and bonus – even without investing or creating value for their investors
. I do, however, also come across really cool investors!
In the case of AirBnN I recall that Paul Graham said: “This guy is so cool that whatever idea he comes with then he will make it big”.
June 27, 2011 at 8:34 pm, Imran Rashid said:
Well said ! Can I quote you for that ?
Regarding Paul Grahams statements its a catch 22 – Does he say the guy is cool because he is or is the guy cool because Paul Graham says he is?
Anyway thanks again for an interesting blogpost that caught my attention and triggered the mild irritation over your well described VC’s with license to kill dreams…
Impressive and outstanding resume on LinkedIN btw…
Best,
Imran