A design thinking look at venture capital

I’ve read a lot of VentureBeat the last few days, though I’ve been a subscriber [siliconbeat] for more than a year. Mostly I’d glance at the stories and file them away in the back of my mind. Aware on one level that now that I’d moved to the Bay Area, the city in fact, I really would be foolish not to, at some level, track that which made the Silicon Valley hum; Venture capital.

But I’ve never been moved to write a post on the subject, until now, inspired by some of Paul Graham‘s recent writing, including his manifesto. That particularly caught my eye because it is titled The power of the marginal. You see, us global nomads, according to the limited research available, apparently suffer from what is called ‘terminally unique’ or the ‘culturally marginal’. Now when the official classifications for your kin, in thought and deed, if not in blood, is so redolent with meaning – "global nomads", "cultural chameleons", "third culture kids" and all of it exclusive, making you the outsider’s outsider because there is no place on earth where you are "in", then, I think we are possessed with an iota more of all the good things he so redolently speaks of in his manifesto. Do check it out, I found it truly inspiring.

Back to VC then. I’m wholly unqualified to write this essay having never been a finance major in business school or doing beyond Ken Lehn’s valuation model. I’m also a perpetual outsider. So by all of the standards, espoused in paul graham’s essay, I’m probably onto something here, so listen, take a moment to read this.

What if?

I thought, what if, what if we took some of the elements of the Ycompetition – a means to get seed stage funding to support yourself through your research – and flipped them around, just to keep the conversation flowing.

Imagine. If you will, for just a moment – instead of the money being collected first, at least from what I understood reading about Sevin Rosen (sp?), and then figuring out where and how you’re going to spend it, what if you invested your seed stage for this round into one innovation incubator, say on a single platform, that would research X number of reasonably sane sounding proposals ready for development by your second round in each year – the teams that will take the idea, its product design definitions and its roi creating business model, and rapid prototype it. Then the business model can be tweaked at an affordable cost and revenue generated at a significant percentage – not dollar amount – you could even afford to roll it out and test it in an emerging market or two before bringing the final tweaked business model to implement in the more sophisticated consumer markets of the West.

In fact, isn’t that very remark that Graham makes with respect to Wozniak, that too many resources spoil the broth?

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