We sat down with Fred Wilson from Union Square Ventures to talk about the trends he’s seeing in tech and the trends he’d like to focus on in the coming year. We also picked his brain about advice he would give to startups.
Fred Wilson Intro: The key words that we look for, that we invest around, are mobile, social, global, playful, intelligent and probably also immediacy. Immediacy is another time for the real-time web, things that are happening right here right now.
NYC 3.0: What do you want to focus on this year?
Fred Wilson:
1. Mobile, but not just everything mobile but the things you can only really do on a mobile device, and I think the advance in things like acceleramators, and compasses, and GPS and having all of those on a mobile device, are gonna create opportunities for new gestures, and new ways that we’re gonna interact with entertainment or games in a mobile way. So mobile is interesting to me.
2. New forms of commerce, things like Gilt Group, Etsy and Groupon, are all new commerce models that have emerged.
3. Gaming, broadly. But not just gaming, but gaming as it applied to lots of problems. Gaming as its applies education or gaming as it’s applied to the environment, or gaming as it’s applied to… if you think of Foursquare, Foursquare is gaming applied information applied to the city you live in.
4. Also, augmented reality is another area that I think can be applied to gaming and other services I want to spend time looking at this year.
NYC 3.0: Any companies you’ve passed on that you regret?
Fred Wilson: In that vein I would point to companies here in New York Guilt Group and The Huffington Post that we said…whether we actually ever said no to either of those companies, I don’t know, we knew of both of those opportunities, I think we could have become investors in both of those opportunies if we would have if would have made the right offer at the right time and we didn’t and I think it was because we missed the power of those models each for different reasons, but so, yeah I regret missing both of those.
NYC 3.0 What mistakes do entrepreneurs make during a pitch?
Fred Wilson: The big mistake that people make is that they take you 10 slides through dry, theoritical stuff and they don’t get into the product. I think the best pitches are when the entrepreneurs or the entrepreneur starts off right away “Hi, I’m Joe Smith, I have spent 20 years in the Internet business and I am really excited about the opportunity in online resume sharing. Let me show you the product we have built. Literally within 30 seconds of starting the pitch, they are on the computer with the LCD projector and we are looking at what they built and we’re in the product.
Fred’s NYC’s tech startups to watch (Non-Union Square Ventures)
- Betaworks companies: “Chart Beat, Bit.ly that are really quite fascinating.”
- Hot Potato: “Hot potato is a service that you can run on your phone, that when you’re at an event, it could be anything from a meetup to a rock concert or political rally or whatever, it aggregates all the various social networks out there and shows you just what’s happening at the event you’re at. So it aggregates all of that activity.”
- Blip.TV: “Taking a YouTube model and applying it specifically to that mid-tear content creator, not the super high end and not the long tail, but they’ve really carved out a market there but it’s an important part of the video market.”
And that’s the way I think you need to pitch. If you force us to look at PowerPoint slide after PowerPoint slide after PowerPoint slide, and get very intellectual and academic, 10 minutes later people they’re losing interest. It’s not because we’re not interested, it’s just human nature, you know. It’s like going to a lecture and the professor is boring as hell, what happens? Next thing you know, you’re sleeping.
So when there is all of the sudden a conversation, it’s engaged and you’re looking at something live and breathing, you can feel the passion in the entrepreneur, that’s how I think you can pitch.
NYC 3.0: What characteristics make up a good entrepreneur?
Fred Wilson: It’s the intangible thing. I’ll go back to the college professor, there’s a difference between a great professor and a bad one. There’s a difference between a great actor and a bad one. There’s a difference between a great entrepreneur and a bad one. And it’s the intangible thing, and in many ways it’s the same set of skills.
It’s the ability to get your attention, to draw you in, and to make you pay attention to what they have to say. And there’s an entertainment value in all of those. You enjoy being in their company, you get caught up in what they wanna do. And they need that skill not just to raise capital, they need that skill to put their founding team together, they need that skill to get people to work 24/7 for no money, they need that ability to get the first customers, that ability to write press stories about them. All that, and you can call it salesmanship, but I don’t think it’s that personality type that just draws people in.
NYC 3.0: What common mistake do startups make?
Fred Wilson: One mistake I see people make is that they hire out the development of the technology. So they have the idea, but they’re not technical enough to write the code themselves and so they find a development shop, an outsourced development shop of some sort, and they turn over the building of the product to them. And I think that’s a huge mistake.
I think companies need to have the engineers as part of the core founding team and they need to be all working out of the same room and working together and committed for the long-haul. A company needs to own its engineering and product, in a way that you could never own it if you hired someone else to build it.
NYC 3.0: Any final advice for startups?
Fred Wilson: Well, I encourage people to keep it simple. Don’t try to solve the entire problem day one. Pick the most impactful piece of the problem, and solve that, and keep it very simple and launch something that is easy for people to understand what it is. And then use that to get a userbase and then grow from there. And iterate, iterate, iterate, but don’t try to build everything before you launch.
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