My $0.2 on tech investment

I saw this video from my YouTube recommended videos.

Here is my two-cents on topic of investment in tech.

In a way, the success of digital business has ruined investment for non-digital technology.

I, along with my grad adviser and a couple of other people developed a new technology for medical implants.  We were working on a patent, and we trying to find investors to get this off the ground.

We tried for two years to get someone interested in backing us.  What we were told repeatedly, was that the times frame for medical technology to bear fruit was just too long.

We would meet people who started the conversation with “tell us about your app.”

We didn’t have an app.  We had an implant.  You can’t fix a shattered hip with an app.

We worked with investment consultants and tech incubators and time and again we heard that there was very little interest in investing in non digital tech.

If you want to come up with the next app or dotcom, there is money available.  Figure out how to make your thing into an app and investors will show up.

These investments have a huge return in a short period of time.  Capital can be some office space, a domain name, and a server.  Six months later you have several million downloads.

If you want to make something, actually start with raw materials and make something, you are shit-out-of-luck.  Nobody wants to fund that anymore.

We eventually ran out of money and I got a different job.  One that I love but I know I will eventually move on from.

What I’d like to do is start my own company.  This is where I know I’m going to run into problems again.

Two startups gaining a lot of traction like that are MVMT and Misen.

Misen began on Kickstarter, MVMT started on Indiegogo.

The business models for both companies are the same: design a product, have an existing manufacturer over seas make it, sell it internet direct cutting out the middle man and markup, for a lower competitive cost.

Fine.  Whatever.  That’s a business model good for some.

Not for me.

I don’t want to have other people make stuff for me.  Every day I run into vendors who can’t make shit work the first time.  We get a lot that is out of spec and it is 12 weeks to six months to get the next lot.

I want control over MY processes.  I am a master heat treater.  I want the furnace in my shop.  I want to watch it run and if something isn’t right, I can fix it that day, not wait weeks for a new batch to arrive.  I want to make my stuff in America, not Southeast Asia, because that actually means something to me.

Setting up a shop takes time and money.  Returns on investment can’t be actualized in six months.

If companies and investors actually want to drive innovation, they have to look past apps and dotcoms and invest in meatspace technology.

If only the big existing companies invest in that, the rate of growth will be slow.

You can’t eat and app.  You can’t cure a disease with a dotcom.  You have to do real world, physical science.  Spend money there too.

 

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