Making the invesment case for wearables
There’s no denying that wearable technologies have fueled the imagination of venture capitalists, and they have begun to open the wallets of investors, too.See also:
With so much interest in the wearable category, VCJ asked a handful of top venture capitalists for their thoughts on the investment climate. What follows are comments from Jon Callaghan at True Ventures, Rob Coneybeer from Shasta Ventures, Eric Klein at Lemnos Labs and Ajay Chopra from Trinity Ventures.
Here is an edited transcript of their views.
Q: Venture capitalists have shown a lot of interest in this early, hard-to-read market of wearables. Is the sector overfunded given the uncertainties?
Callaghan: I actually think it is underfunded. There aren’t enough people taking big bold risks.
What I mean by that is venture capitalists want the safe deal. That doesn’t exist in hardware and wearables. It is such an early market and there are so many unknowns.
To invest in it, you need to be a venture capitalist, meaning you’ve got to embrace risk. When we funded Fitbit, people told us we were crazy to do hardware. When we funded 3D Robotics a year ago, people told us drones were a hobbyist market.
Our industry needs to take a whole lot more risk.
Q: Would you say the capital doesn’t yet match the opportunity?
Callaghan: I can’t sit here and say wearables will take over the world. I don’t know if that will be the case, and not all investments are created equally when it comes to any industry, let alone this one, which is so far out in the future.
Having said that, this is an enormous trend that venture capitalists need to be putting resources behind because these markets are huge.
For the first time in history your average three-person startup can address markets that number in the billions. We’ve never had that before. MakerBot (now acquired), Fitbit, 3D Robotics, these companies are scaling like we’ve rarely seen before....MORE
VCs try on wearables
Investing in wearable as a fashion statement–VCJ report
I suppose it was the same 83,000 years ago when the Neanderthal entrepreneur was making the pitch to try this thing he's calling clothing and the ecosystem he expects will develop from it:
