Thinking About 2015

Once a quarter my partners (Seth, Ryan, Jason) and I spend 48 hours together. Unlike a typical offsite that ten zillion organizations have, we tend to spend less time on formalities and more time on wider ranging, forward looking discussions about what we are doing, both professionally and personally.

Last night, over an amazing meal, we ended up talking about what we’ve been investing in over the past four years. When we reflect on the 37 companies we’ve invested in since we raised our first Foundry Group fund in 2007, we’re delighted with the mix of companies and entrepreneurs we are working with. We have a very clear thematic strategy that we’ve discussed openly, along with a few other key principles such as being willing to invest anywhere in the US and being syndication agnostic.

At dinner we zoned in on all of the current activity in early stage tech. There’s an awesome amount of exciting stuff going on right now and a real entrepreneurial revival throughout the US. Sure, there’s all the inevitable bubble talk going on which I’ve encouraged entrepreneurs to simply ignore and play a long term game instead, and once again many VC firms are spreading themselves wide and chasing after whatever the latest interesting thing is. But entrepreneurship, especially throughout the US, is vigorous, exciting, and creating many really interesting companies, some of which will be important in the future.

When we think about what has driven the success of some of our investments, we realize that we’ve chose the macro environments to invest in really well. Our HCI, Adhesive, and Distribution themes are all great examples of this. With HCI, we are at the very beginning of a massive shift over the next 20 years around how humans and computers interact. Adhesive plays the macros of digital advertising – every year meaningful ad spend is shifting annually from offline to online and that will continue for quite some time. And with distribution we’ve benefitted from the application of the concept of social to extremely large existing online markets where innovation had stagnated.

Our conversation shifted to 2015. While we still believe there are many exciting opportunities within our existing themes, we think that given the velocity of technology innovation and the way we use technology, things will shift dramatically over the next four years. Completely new and unexpected innovations are emerging and entrepreneurs who are obsessed with transforming existing industries, creating radical new technologies, or dramatically changing the use case of existing technology are starting to work in 2011 on things that will matter immensely in 2015.

We have one new investment coming up that reflects this and, when we start talking about it, you’ll see the kind of entrepreneur and company we are searching for. We decided last night to look for a lot more of it. While our deeply held beliefs about what we invest in and how we invest are the same, we’ve decided to open up our intellectual aperture and make sure we’ve incorporated a stronger view of “what is 2015 going to be like” into our thinking.

  • Another Foundry theme?  Can’t wait to hear what it is…

  • Looking forward to hearing more about your course adjustment and the related investment. To an extent, your posts on HCI inspired me to do some work on DIY MIDI controllers to go with my DJing habit. Best wishes.

  • Brad, each Foundry ‘theme’ post I read sets my mind going about the intersection points of the themes.  Do you look at your portfolio companies in this way? 

    We’re nearing launch for a web app at the intersection of HCI and Distribution.  Our HCI may not make “Minority Report II,” but for the space we’re in (financial information & analysis) where users are still printing financials and keying into Excel, it’s quite a leap.  But it’s only in combining HCI with the social, crowd sourcing, and collaboration sub-themes of Distribution that it gets really interesting.  Curious if you’re seeing cross-theme synergies like this.

    • Yup – we see lots of cross theme synergy. It’s a powerful way to think
      about some stuff when it hits more than one theme.

  • Rich

    Platforms (PaaS) will rule the roost in the coming years.

    My PaaS for EMR is a great idea still needing funding. 🙂

  • Rich

    Platforms (PaaS) will rule the roost in the near future.

    My PaaS for EMR is a great idea still needing funding.

    • Rich

      Something happened when editing my post, this one is a dup.

  • what I want to know is what is the correlation / causation of your collective drinking and smoking prior to the development of a new investment theme.

    (think I see a pattern emerging, amidst the funky green cloud… 😉

  • I like the act that you take the time to interact with each other – in person.  Hope you do the same, with the same passion, with your porfilio companies.

  • Neilh

    If Groupon doesn’t sell it people won’t buy it in 2015 🙂

    • Agreed.  It’s important to think about the bubble, its relationship to investment cycles, and its relationship to a startup’s development time line.  Better sell to the inflated web IPOs while their rich with cash and drunk on their egos.

  • Geoff P.

    Would you guys consider investing in Canada, or is the US a hard requirement?

    • We are open to investing in Canada.

  • haha… Slow down.. There is the end of the world in 2012 🙂

  • Have enjoyed reading your blog for some time now, and you and your partners are headed in so many right directions. From where I’m sitting, 2015 does indeed look interesting and somewhat disruptive, with continued massive online/connected growth. The connected (mobile and everything else) market scale (and the vertical markets pin-striping it) is going to be unlike anything we’ve seen so far, and there are holes right now (big hunks of peanut butter and chocolate that haven’t been combined just yet!) that have effectively no direct competition. We’re working on one of them and it’s heart-poundingly exciting.