Twelve Reasons I Want to Quit Venture Capital
“It’s not a tech bubble. It’s the biggest wave of innovation in the history of the world.” –Marc Benioff
Benioff is right… there is so much amazing innovation going on that it’s hard to really even know where to begin. After half a decade as a founder and entrepreneur, for the past year or so I’ve gotten to be a real live venture capitalist. That means I’ve been seeing more and more cool stuff — which has forced me to ask myself, “What are the most amazing opportunities I’m seeing that would convince me to jump back into the thrill of the trenches?”
A few months ago, I started keeping a note in Quip (huge fanboy of Quip btw) that became a running list of the things that got me the most excited and each sent me down the rabbit hole to dig in further. These were the things that made me say, “Huh… that’s freaking COOL and there is some sort of bigger opportunity here to build some badass startup!”
So without further ado, here’s my list of what I’m most curious, excited, inspired and intrigued about right now (and areas fascinating enough to throw me back into the trenches.) If anyone is curious and wants to explore with me, definitely shoot me a note… love to chat, explore or create with rad people. I’ll be writing in more detail about each of these twelve themes in the coming months (with a bonus #13 that is a bit further off, but definitely on my mind).
- Chatbots I’m game to chat with. I get it… they are overhyped and we don’t quite yet see the use cases that make them magical. Sounds familiar… early apps, social media, websites, etc. The reality is that a huge platform shift is going on under our own noses — and that’s the movement towards messaging as a/the platform. Why I’m so excited about it is it’s a greenfield right now that has all the feelings/features of it being perceived as a “novelty” — which history has shown us makes something ripe for huge businesses to emerge. Plus Facebook is investing heavily in it’s messaging platform (which by nature gets WhatsApp in play). Slack has already doubled down on its platform and partners. And consumers in Asia and Europe have already been using services integrated into messaging services. So it’s only a matter of time before killer use cases emerge — they have elsewhere and they will here.
- Outsourcing Part Deux: Curated, Specialized & On-demand Freelancer Marketplaces. I am a huge Odesk/Upwork fan — at various points in my last two startups (Zaarly & Main Street Genome), we were huge power-users of the service. But I also have seen the hurdle for normal people to use outsourcing/freelancer marketplaces. I know plenty of people who have some horror story about hiring someone online — but that is simply a problem to be solved. Really there are two problems with the current state of “b2b services/freelance outsourcing”: (a) it’s so hard to figure out who is f#cking awesome and who sucks (fine lines); and (b) it’s so broad that I have a hard time finding someone specialized. The marketplace that finds or hires amazing people in a specialized category?Yea in that model, I think you can take a higher rip than Upwork even (see Gigster as an intriguing case study).
- Not Your Dad’s Insurance Policy. I was amazed to hear that in the US, the insurance industry collected $1.1 trillion of insurance premiums. That’s trillion with a “T”. Insurance is the ultimate data science play — it might be the original one now that I think about it. And with the internet of things and sensor and data tracking, today’s insurance companies or perhaps the new series of upstarts (see list below from CB Insights) can now use new data sources to customize their costs or in fact insure new things. I personally love thinking about my own data-driven premiums related to health, auto, life… if the insurance companies truly priced my insurance based on my 23 & Me genetic scores, what would it look like? Also terrible risks of privacy violations… so there’s that too.
4. Trucking, Truckers & CB Radios. You are probably thinking, “Come on Eric, truckers?” So I recently saw an image from Mental Floss (see below) that blew my mind. 30+ of the states below have truck driver as the most common job in the state. Truck driver. That isn’t enough — how about this? The trucking industry is a 255 billion dollar a year industry. We get excited about Tesla, but think about the impact of electric trucks and self driving trucks… yea they aren’t far away. There is an ecosystem people need to build around trucks — self-filling gasoline, self-charging stations, insurance, weatherization, localization, etc. Something massive in a massive market.
5. Firing Your Real Estate Agent. I have seen more than a dozen pitches in the past three months from startups hoping to attack the $70 billion spent annually in commissions for residential real estate. I get why people don’t like it… more and more consumers are using Zillow and other online tools to find homes, then they still have to pay 3% to a broker to buy a home (that the broker didn’t even source). This is going to be an interesting one… but I imagine a world where we have an e*trade style player for the hyper-empowered home buyer who just wants to pay a transaction fee to tour each home and to submit an offer.
6. Gun-Tech (Yea you read that correctly). Every time there is another mass- or school-shooting my Facebook page explodes with commentary about gun laws, gun control, stupidity, etc. Call me a cynic, but I don’t think gun control regulation is the answer. Listen to Malcolm Gladwell’s commentary where he says stricter gun control laws won’t lessen mass shootings (but then goes on to say we still need tighter gun control laws). I think Gladwell is likely right — we are approaching the problem from a regulatory standpoint rather than a technology standpoint.
7. A new “job” paradigm for new grads. If you read the book the Alliance by Reed Hoffman, it highlights a massive shift in managing talent in a networked world. The short summary is that the landscape has shifted and smart organizations are going to need to build an entirely new way to recruit, engage and accelerate talent. As someone who has hired and managed a number of highly talented millennials in my past few companies, it’s true that there is an amazing opportunity to reimagine the early career norms for this group. Companies like Slack and Github are a tiny glimpse into how technology is changing how we work in/with teams that communicate differently, engage uniquely and approach work in an entirely different way. Matching to ideal mentors/bosses, re-imagining apprenticeship and developing trade skills will become critical in this new landscape.
8. Planning for death. If you read the news, you’ll see that Prince didn’t leave a will and he was surrounded by a ton of smart business managers and people. There are two main reasons: (a) it’s a crappy, non-digital, old school experience to create a will, costing you thousands if you work with a lawyer; and (b) no one likes to talk about death and the logistics of death. Mint.com provided an interesting and unique approach to getting young people to start to think about finances. I believe there is a similar opportunity around end of life planning. It’s a huge area (we spend over $20 billion annually on funerals and hundreds of billions on estate planning), but I think there are ways to unlock this arena.
9. Does anyone actually use loyalty programs anymore? Look on your key ring or your wallet… see a couple of those plastic cards with UPC codes (the average household is in 29 loyalty programs, but only active in less than a dozen)? Someone is going to discover a way to drive better engagement from loyalty programs (because companies are spending more and more on these programs). Things like Belly and LevelUp have been okay, but never really seemed to gain any sort of major penetration. Something has to give… and there has to be a better digital platform for loyalty (is anyone talking about this?)
10. Gyms, Software and the Internet of Things. The gym, health club and fitness studio market is huge with $30 billion spent annually. It represents a fairly fragmented market, but with the cost of sensors shrinking and the number of pieces of equipment growing, there is a huge opportunity to think about the next wave of innovation to be adopted by and into gyms. Back in 2013, NextWeb did a nice piece on gym-tech, but I’m not sure we’ve made much progress. I’m guilty as anyone else — my gym membership has been quite lonely in 2016. So I’m hoping that technology can become my ultimate guilt monger to get my tail back into the gym. Perhaps I need a shock collar or something…
11. When Startup Investing Stops Being a Novelty (or a Privilege). Recently the SEC unveiled the rules to enable crowdfunding investing by unaccredited individuals through a series of platforms. It’s very cool, but not likely to move the needle in any major ways (at least in my opinion). The big question for me is when does startup, small business, etc. investing start to become a normal part of our investing routine? That’s what I’m waiting to see… we’ve seen some interesting comparables with peer-to-peer lending.
12. The Physical Consumer Product Renaissance or Quirky Reboot. We have seen an explosion of unique consumer-focused physical products the past few years, most of which aren’t companies but are just products. Quirky was a well funded startup aiming to own this space — helping to support, create and distribute this ecosystem of new and emerging physical consumer-focused products. They raised a ton of cash ($180M) and then shut down in a blaze of glory. Many of the pundits will tell you their shutdown was mostly due to factors outside of the market need/opportunity, which leads me to believe there is an opportunity for new products to be introduced and distributed to a hungry population — filling that gap between kickstarter and Walmart.
Bonus #13. Raise your hand if you’d implant a chip in your brain to read your email? Did you get the joke earlier… #13 is “on my mind”… at least I found it funny! I recently finished reading Nexus by Ramez Naam based on a recommendation by magical book recommender Bowman Fishback. It was a great one — a story of the moral and ethical dilemmas of being able to become superhuman by modifying our brain. But immediately it forced me to think about why can’t we modify our brains now? Super intrigued… I get that we are likely years away, but if you following things like BJ Fogg’s work at Stanford as hacking persuasion or Tim Ferris’ language learning hacks you can start to see the outlines of that bridge to the mystical world in Nexus. Seriously, raise your hand if you’d consider that chip in your brain… thinking about it, huh?
So that’s a wrap of what’s on my Quip note right now. I’m sure there will be more added and some removed, but these all feel like things worth exploring (many of which have some business opportunities embedded in each). And each of these topics deserves a deeper dive, so I’ll begin to cover more about each as I dig in. Love your thoughts or feedback…
**
Special thanks to Dhruva Rajendra, Mark Hanson, Caleb Clark, Jack Barrow & Trevor Faden for your comments and help.
