Question of the week #21
One of the most frequently asked questions I get when people ask me about the companies that I have invested in is, what is your favorite investment. I always answer the same, I have no favorites, I love them all. With that being said, here is a good question for this week.
what are the business types/trends that you see getting really exciting in 2013?
We are already almost to months in to 2013 but I am definitely seeing some interesting changes in the ecommerce world. I have a few investments in the pipeline around this platform. I really believe that the big brands that will make an impact in the ecommerce world are platforms where they are going after a certain segment of the population as in you can't be everything to everyone. I also believe there is a balance between online and brick and mortar. I have written about this before, I like the models where 15% is brick and mortar and 85% is ecommerce. There is something to be said for an extension of a brand where you can see it and touch it in markets that might have the most traffic.
I do believe a key factor in 2013 is revenue. In order to get funding and a real look from investors you have to prove a revenue model. I don't think anyone is interested in figuring out what to do with all the eye balls as they were in the past.
Lots of changes in the consumer product markets from food to organic to no chemicals. The issue with that is those businesses have a hard time getting funding. They need to hit a certain mark before a good amount of capital comes rolling in the door. Perhaps places like Circle-up and other consumer product incubators with cash will change how that industry grows. I hope so.
More heatlh care, more education and more banking start-ups. Hoping that one day we won't have to carry cash or even a credit card. We will see.
Comments (Archived):
Investing priority question:Investing in a restaurant or an artisanal food company has one type of return. Feels more emotional and wanting to make a difference type of investment.Investing in something that shows broad expansion capabilities with higher multiple expectations is something different.You seem to do both.A method to this or just what strikes you?
I like supporting the local community. It is a different return but it is just as rewarding.
This is great! I agree that ecommerce innovation is big this year (of course I do!). I also think that we’ll see big changes in digital advertising and tracking/customer-centricity in 2013.The other huge trend I see is an explosion of “the Internet of things” starting this year. I’m already seeing Internet enabled refrigerators at competitive price points in major retail outlets, for instance. I think we’ll start to see adoption of these technologies by normal people (not just hardcore tech types) starting this year.
.The key phrase in your comment is “brand extension” whether it is the traditional B & M retailer going digital (PiperLime) or the successful catalog/internet store going B & M (LL Bean, old example) — brand extension is the ultimate marginal leverage on the core business.The marginal returns are real marketing, operating and financial leverage of the brand’s existing equity, core competency and infrastructure and are a supplementary benefit not just complementary.This is a force multiplier, a community adhesive and a penetration driver.Your writing and blog have become progressively more and more business focused and cutting edge and interesting.Who is that guy you hang with? Cause he is in competition with you now on a daily basis. And I seem to remember that he’s pretty damn good.Well played!You’re not just a pretty face anymore. You are a business assassin. But in a very, very nice way of course.JLM.
The cost of starting a company has dropped. The value of money has dropped. People are having internal mistrust over things like the stock market. They will begin to invest in themselves. Additionally, since the cost of tech has dropped, older entrepreneurs that have a lot of DNA within specialized business silos are going to start companies to fix problems no one else sees. They will gain quick traction within what seems like a small space, and then try to scale and blow it out-moving to other verticals. Unless an investor can see the big picture, they will toss them aside as lifestyle businesses-but these seemingly small B2B plays will be killers.
Totally agree