What Makes A Start-up Worth Investing (From Fred Wilson @LeWeb)?

Fred Wilson, an investor who is known with his good decisions (early investor for Twitter, SoundCloud and Kickstarter) has made an interesting speech at LeWeb.

It was about the types of start-ups he was interested in investing and want to share some of them as it was inspiring as well.

He started with saying that he is not interested in technologies but more in trends and prefer to invest in trends.

These 3 trends were the ones that he saw growing:

Removal of bureaucratic hierarchies

The need for speed when it comes to reaching information is clearly the heaviest trend.

The examples he provided were Twitter (replacing old media), Airbnb (replacing hotels) and Kickstarter (replacing production companies).

Simply, anything that removes the middleman in any service (or at least minimizes the number of them).

Unbundling

This can actually be summarized as focusing to niche markets.

The traditional business usually tries to sell all the things it can (like a bank selling loans, cards, accepting deposits, insurance..).

However, he thinks that the user now prefers to get products/services that are specially focused on that and want to get the best as a result (an example was Netflix).

People being the network

With the increasing smartphone usage, we are all part of an active network.

And, he attaches the success of apps like Uber or Tinder to that effect.

 

These 3 trends are the filters of Fred Wilson and think that they are worth considering when launching a start-up.

Here is his speech (it is worth the time):

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