Updated: Aug 3, 2018
We are always on the lookout for businesses that we think are powering other people's businesses. While the Mark Twain quote above is often used to describe a duality between the mindset of a prospector and that of a more conservative approach to profiting from a market opportunity, we believe that both are possible.
Simply put, we love to invest in businesses that make other businesses more successful.
From Vertical SaaS like Unito and Sortly to software-driven commerce marketplaces like thisopenspace to software-driven labor marketplaces like Faber and Paro.io, or SaaS functionality combined with payments platforms like FlipCause to financial services providers like NorthOne, we are an active and enthusiastic investor in picks and shovels.
For us to get excited in this arena, what we're looking for is one of or both of these attributes:
A clear 2nd act: If the Founder can't articulate what they unlock by achieving success with the current product and go-to-market plan, it's unlikely we will invest. We want to hear about what lies beyond the current plan and here more than just some ideas. We want the core business to be just the initial wedge that builds customer trust on which additional revenue streams or up-sell opportunities continue to emerge over time.
A technical innovation that changes the way business transacts: While we don't do much in computing infrastructure, we are actively looking for opportunities in the FaaS arena (server less computing) and are also very interested in novel, inexpensive battery technologies. Changing the way that core computing infrastructure works will likely be owned by the existing incumbents but the software required to truly effectively take advantage of such novel approaches.
A deep understanding of the customer mindset: In many cases, the advantage of a first time entrepreneur operating in a space they know little about is that they're able to bring innovations in that category to market in large part because they weren't constrained by accepted inertia. But in our picks and shovels investments, we're looking to the CEO supported by an early BD or Sales hire to be able to understand how to translate their vision back into words and concepts that the market can embrace today.
Marketing strengths: In this category, we're really looking closely at the company's website and other key digital touch points for how effectively we believe the Company's value prop is being conveyed. But as we move deeper, we want to understand each step of the customer journey, and are evaluating the tactical execution of the marketing function as a big part of our decision-making process.