1. The financial people who invest in
stocks are not the folks who create technology.
What appears to be gold may not be. The investor is
too often not qualified to determine if
technology is valid, will work or is useful to industry and business. Not only does the investor
generally lack any technical
background, when technical qualifications do exist, the investors are too easily biased.
The errors that occur can result in a false positive or false negative
decision to make an investment. That does not stop some from taking
credit. When things go wrong for the investor they walk away, when things go right
they take the credit. Furthermore, because of the way that they manage their
portfolio, investors can appear to be successful when they are
not.
2. Investor Exit Strategies have nothing to do
with long term technical opportunities.
The business of investing is not the business
of the entrepreneur. The investor has short term demands that the
technology does not. The entrepreneur can have his guts on the
line. The risk to the entrepreneur is in establishing a relationship
with a wrong investor. This results can be a misfit of agendas and the a
ultimate loss off affection between the goals of the entrepreneurs and the financial
advisors.
3. Investors are directly interested in
profits, not products or services.
The disaffection between the investors and
the entrepreneurs extends deeply to true objectives and definitions of
profit and success. The only way for a technological company to earn profits is to
sell products and/or services. But for the serious entrepreneur,
selling stock is seen as a source of new obligation, not new profits.
For the entrepreneur to take on and be responsible for more than what can be
handled means inviting disaster. The Investor sometimes tends to look
at this as missed opportunities while the entrepreneur looks at this as
being prudent.
4. Stock can be bought or sold but there is no
going back to the "good old day" without technology.
Technology is the functional basis of the
financial culture. It never stops moving forward and if it fails
then so does the concept of the modern financial institution.
Therefore technology can not be allowed by society to fail. Investors
conveniently seem to forget this fact in Bear markets.
5. Good technologies are not invested in; good
investments are invested in.
There can be a difference between a good
investment opportunity and a good technological opportunity. Investors
demand the identification of existing markets that will not exist with the
best technical solutions. A good technology can be just a one shot
affair. A good investment involves a goo technology that can be
invested in multiples of times as it becomes more successful. This is
a far broader definition that changes the nature of what the investor must
look for in a good technological investment.
6. Truly revolutionary technology requires
revolutionary language to effectively communicate.
Revolutionary new business requires revolutionary
technical solutions. This in turn means that the ease of communicating the best technology is
inversely proportional to how new and unique it is. But new and unique
does not necessarily mean risky nor does it mean risk free. It is the
fear of the unknown that investors seem to fear the most. Investors
therefore must learn to learn rather than fear to invest because they do not
know. 100% of successful investments that are passed over are future
losses.
7. Technology does not care about financial
timetables.
Technology eventually works itself out in it's own time. From the
perspective of the technologist, money is a means to acquire the necessary
resources. Technology works or does not work and putting more money on a
project does not correlate to technical performance or functionality. Capital investors just do
not get this simple concept because the financial investment is treated as a
universe unto itself. They can become incapable of seeing outside of
their universe.
8. The total true vision of technology is lost
when financial terms are signed.
Financial terms destroy the long term
potential of technology by forcing an artificial focus on solutions that
have short term economic value. This obscures the true potential of
the technology. It can also can create fear and animosity between the
entrepreneur and the source of funds. From the investors perspective
the entrepreneur may not be realistic or can even be a fraud. From the
entrepreneur's perspective the investor may be leveraging short term capital
for control of the company. Sometimes this animosity is
justified. The fact is that the terms reflect the fact that the
commitment of the entrepreneur is not the same for the investor and the
entrepreneur. This is the barrier that must be overcome.
9. Outside "Experts" that are asked
to evaluate technologies are by definition biased.
All technical experts have personal and
professional investments in what they do. They could not be experts if
they didn't. Sometimes these experts even have
hidden economic ties. But many are simply snake oil salesmen and the oil
they sell is
their reputation. Others are so called technical wiz kids with
absolutely no work history. It is clearly not enough for
investors to evaluate the technology. The also have to evaluate the
experts that evaluate the technologies. They need to look more at the
capabilities and depth of the expertise and less at the surface gloss.
10. At the end of the day, the big dogs
generally win.
Those who have the resources are fearful that
their technical investments will subverted by new technologies. The
forces of industry exist to separate the opportunity from the originator.
This resistance is at
play with entrepreneurs every step of the way. If they can not buy out
the new technologies, they can bad mouth it to destruction.
"Experts" for any view can be purchased and put to work. The big dog technology
companies win because they have the greatest existing resources, not because
they have the best technology. The well known but hidden agenda in all
of this is that these same big dogs may want to bury the technical bones
they acquire in order to protect their existing
investments.
