Keith Teare, TechCrunch founding shareholder, argues investors should target the near-future, not the present or distant future. He uses Airbnb and Uber as examples of ideas that hit the market at the right moment, and compares startup timing to pregnancy trimesters to explain when ideas become investable.
Chapters
So let's do the second bit then. What does it mean to be relevant? I kind of like to think in what I call historical terms. So I'm a sociology and political science major, and for those of you who are not American, it won't shock you to learn that one of the things you have to do in sociology and political science is read Karl Marx. For those who are American, you'd be shocked, but trust me, it is fine. You can read it and not die or anything. And Karl Marx takes his whole framework of thinking from a German guy called Hegel, who wrote a book called Logic. And what Hegel kind of put in the middle of his thinking is a word that you've probably heard the word, but never discussed it unless you're a philosophy student, is Dialectics. Dialectics. And dialectics means the present is not static. More or less, it means the present is not static. It's actually made up of 3 elements: the past, which is dying; the present, which is somewhat static; and the future, which is being born in the present. So when— so, you know, if you did an exercise today and you asked, to separate out today the past, the present, and the future in today's world. You know, you could say high street stores are the past. You could say Amazon is the present. And you could say, you know, delivery by Uber from the high street is the future. That could be wrong, by the way, but it's a way— it's thinking about what is killing the present and the past. Now, if you're doing a startup and you are doing an idea which belongs in the past, let's say you're going to build a search engine for the web. Well, I'm pretty sure somebody would be clever enough to build a better search engine than Google for the web. Someone in the world could do that. But if they did it, it's very unlikely it would be a big outcome. Because Google's good enough. And the web, by the way, is in serious decline compared to mobile and apps. So even if you could do it, why would you? It's the past. A social network for fill in the blank almost always is in the past. Not always. There are some exceptions to that. But it would almost always be something not to do because it's already been done, especially if it was a web-based social network and had nothing to do with mobile. You know, a photo app that you could share your photos with your friends. I get pitched those every day, by the way. Well, there's already quite a lot of those. That, you could argue, that's the past as well. The present is the leading-edge stuff that you already know about. Self-driving cars are the present, not the future. It's the present. Don't start a self-driving car company unless you're doing something that doesn't exist yet. then maybe there's a space for that, because that's the present. So the present always feels very up-to-date, very modern. But investors are not investing in the present, ever. Investors are investing in what comes after the present. And it's also worth saying, investors are not investing in the future, the distant future. So if you come with a flying car, and it's more than 2 years to market, or 3 maybe at the outside, it's too far ahead. So investors are looking at the near future. And the near future is kind of interesting because you don't know what it is. Number one is you don't know what it is. So if your idea sounds familiar and obvious, it probably isn't the near future. The idea should feel slightly crazy. And not at all obvious, but doable. And the way I think about this is, if you think about pregnancy and birth and the 3 trimesters, and you kind of use that as an analogy for a product. In the first trimester, Everything required for life, almost apart from independent breathing, is already there. Everything required for life is already there, but you can't see it. It's invisible. There's not even a little bump. In the second trimester, there's— it's kind of a little bit visible, but, you know, how many times have you made the mistake of asking someone if they're pregnant in a— or seen it on comedy when they're not? So you can make mistakes in the second trimester. And the third trimester is kind of blindingly obvious, that birth's about to happen. Well, the second and third trimester are way too late for product innovation. When people can already kind of guess it or see it, it's too late. And I'll give you a couple of examples of really successful companies that were what I would call first trimester unborn children. One is Airbnb. Airbnb, there was nothing to invent. There was already the web and mobile. There was already people who rented properties, vacation rentals. VBRO is still around. It predates— somebody wants to talk to me, but they can't. That is, by the way, the founder CEO of one of my portfolio companies. So there was already that. There was already the possibility of spending money on mobile or the web to reserve something. There were already databases. There was already the cloud. It was already global. So almost everything needed for Airbnb already existed, except for Airbnb. And so all that had to happen was to give birth to the invisible child that was already there. Uber is another great example. With Uber, when Travis did Uber, there were already private hire cars, there was already mobile with GPS, there was already payments, there was already the ability for person A to track person B if they gave each other permission using their phones. I mean, really everything was in place, and all he had to do was come up with the idea and then start it here in San Francisco. and then grow it. And he was the first. It was kind of, you know, nothing to invent, zero to invent. So this is him again. He's a very persistent CEO. Next time he calls, I'm going to answer and we'll embarrass him. So basically, the near future kind of already exists. But it's not visible yet. And the win— the really, really big winners give birth to something that's already there. Now, there are a lot of exceptions. That, that is not the only way to do a company.
There's— that's okay.
Now I'm going to answer.
Okay.
Hey, Arka, how you doing?
Hey, Keith. Can you do the call now instead? It should be like take 10 to 15 minutes. I've got capital on the line as well.
You want me to do a call with an investor right now?
No, not the investor, with versus.
Oh, well, you're on stage at Draper University in front of about 75 people. So the answer is, sadly, I can't do the call now.
Oh, okay, okay. All right.
That'll teach him. So, you know, there are other ways. Like, for example, if you're a scientist, if you're a scientist and you're doing deep tech, it's possible that your idea is so novel that the unborn child isn't there yet and you still have to invent something, or you're in the middle of inventing something. If you've already invented it, it is there, but if you haven't invented it yet, it isn't. But the truth is, you know, in research and development, when it's a capital R and a lowercase d, meaning you're still inventing, most VCs aren't going to give you money anyway. It's when it becomes an unborn child that the investor gets interested, because then they can see— what can they see? They can see a roadmap from a starting point that's tangible. And if you haven't invented it yet, there's no— they can't see the roadmap. So the near future, not the present and not the past, are really important. What are some of the most important lessons you've learned from your career?
