Code/Decode

Narain is the founder & CEO for 360 Degree Interactive, a web services firm based in Chennai, India. This blog is about his personal views on Web 2.0, RoR, Social networking,Digital media, interactive advertising, SaaS, Service Oriented Architecture, India Inc, rural education, Web standards, mobile 2.0 and more.

Sunday, February 26

Crystal Gazing: 7 big things in Tech

Over there at MSN Money, Jim Jubak outlines the next 7 big things in technology, which are disruptive in nature. He also outlines some of the key elements in getting into the disruptive mindset. - via Sadagopan

Once you've identified a promising patch of destruction, how do you find the profitable opportunities? I'd offer three general rules:
  • Look for companies that actually have a plan for profiting from the disruptive shift in technology. Innovation is neat, but for investors it's not nearly as important as a profitable business plan.

  • Don't pay too much. Yes, it's notoriously hard to value the stock of a truly disruptive technology company. More than 20% of the readers who responded to my pre-IPO survey on Google thought the stock was worthless. But since the odds are that at least 30% of the stocks that you pick as disruptive opportunities will head south, the key is not to pay so much for them that the successful picks can't put your portfolio comfortably in the black.

  • Don't ignore established companies that are willing to cannibalize their existing business in order to reap the potential profits of disruption. Since these companies aren't betting the store on the disruptive technology, the returns to you, the investor, won't be as high as with a home-run-or-bust bet. But the losses won't be as large either.


Tags: Disruptive Technology, VC

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