3 SKILLS NEEDED TO HACK HYPE IN TECH INVESTING

3 SKILLS TO HACK THE HYPE IN TECH INVESTING

 

Technology can help us tackle some meaningful problems. But it’s the thinking and capabilities of the investors that will determine which will see the light of day. I have seen too many ‘bad’ projects get funded by supposedly sophisticated investors, burning their cash. This impacts the available capital for worthy founders and promising applications of technology. We need to know what to look for and how to avoid FOMO (fear of missing out).

Here’s a case in point.

Over a glass of bubbly, someone tried to convince me to invest in a blockchain project.

“There’s a great opportunity using blockchain technology in electricity.”

So, I asked how it works.

His reply? “I’m not sure, but it’s the same technology behind bitcoin, and a lot of people have made money out of bitcoin. Also, Branson, Gates and Bezos have invested $1billion in it.”

Brilliant! Yes, please take a lot of our money to invest in something you have zero clue about.

A significant injection of discernment, diligence and better decision-making are long overdue.

DISCERNMENT

Pitches are great, but it’s how people answer questions that matter. It is probably a good idea to not put your money where the promoter can’t explain it and uses other people’s names to justify you joining the bandwagon.

Pitches are great, but it’s how people answer questions that matter.

DILIGENCE

Is it true? The pandemic of fake news shows how people love to share information without fact-checking. So, have Branson, Gates and Bezos invested $1billion in blockchain for energy? No – they are part of a $1 billion fund (Breakthrough Energy Ventures) investing in clean energy technologies, not specifically blockchain technology in energy.

DECISION-MAKING

There are many potential winners out there – but there are also a significant number of potential losers. The furore of hype is often hard to resist and, like any virus, a vaccine is needed. A useful resource is a checklist highlighting the elements that matter to you. Taking a leaf out of one of the greatest investors of all time – Warren Buffet – one of the principles should be ‘do I understand it’. If you don’t, seek out more information. If it still makes no sense, it might be worth staying away.

Please keep your wits about you while others are losing theirs, and let’s make sure we’re funding innovators worth backing.

 

 

N.B. There is a lot more complexity to this issue. If you’d like to know more, please send me a note, and I’d be happy to share insights, nuances and strategies.

 

 

Rethinking Startup Success

We often hear ‘it’s a great company, they’ve raised $x’. This is the wrong metric, and recent disasters (e.g. WeWork, Uber and Theranos) have confirmed this. Thought it was time to peel back the layers on what we should be looking at. Here’s the article featured in Entrepreneur Middle East. read more

Discussion on AI & Intellectual Property

A recent article in Technology Review posed the question of whether AI can be an inventor. In principle, it’s a debate around IP law and whether AI can own ideas it generates. Check out the debate generated on LinkedIn. It’s worth a read. Additional views always welcome. read more

State of MENA Startups 2019

Following on from the recent report on the startup scene in the MENA Region (well done to MAGNiTT and 500 Startups for putting this together), here we peel back the layers on some of the issues raised. read more

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CASE STUDY

WHEN INVESTORS COME IN

Tackling transition and the growing pains of scaling a business

CHALLENGE

A start-up was acquired by a private equity firm. There was low morale, diminished team spirit, lack of personal performance, all ultimately impacting results.

INSIGHTS

The people involved from the inception of the company were still with the organisation and were experiencing a change in culture, direction and method of working. The speed and rate of change was further amplified with additional acquisitions that needed to be merged with the business. The core team was under increasing amounts of pressure to provide stopgap solutions whilst other parts of the business were integrated. They were feeling undervalued and unrecognised.

SOLUTION & OUTCOME

Conducted individual and group sessions:

  • Identified individual core drivers, strengths, aspirations and areas they wanted to develop
  • Personal reflection on events and interactions – perception, reaction and subsequent influence on relationships with their colleagues
  • Awareness and adjustment of personal behaviour and communication to improve relationships with colleagues
  • Exploration and development of ways to tackle rifts with colleagues (e.g. identifies areas in which they could be each other’s mentors and role models, playing off each other’s strengths)
  • Reviewed compensation structure: what got measured, what got rewarded and how they felt about it
  • Reviewed roles and individuals in those roles
  • Realignment of roles with functions playing to strengths and areas of competence as opposed to titles due to length of service

Resulted in:

  • A team consisting of committed, competent and collaborative individuals operating in a more positive environment, with less friction and positive results.
  • A more collegiate and collaborative work environment, with improved communication, transparency and higher levels of trust
  • A compensation structure aligned with deliverables, contribution and value-add
  • Realising they were not in the right role or company, some team members resigned – some went on to become founders of their own startup

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