How do you know something is timeless? A quick glance at the fashion world illustrates how quickly fads come and go. What may seem like a timeless design to fashion elites today, might be scorned by them tomorrow. One key in evaluating a product's timelessness is not looking at the details (or timing) of the design release, but looking at the overall problem or solution. Z. Cavaricci and hammer pants may be relics of the 1980s, but pants themselves are still around–and have been for centuries. To generalize further, the need to clothe the human body has been around since Adam and Eve donned the proverbial ivy leaves.
No product is timeless. Even something as basic as the toothbrush has evolved over time. But solutions can be timeless–must be timeless to ensure a smart investment. There must have been a desire to solve the problem in the past, and you should have a strong conviction that the desire to solve the problem will continue forever. Otherwise, you risk investing in a one–hit wonder.
When considering Dropbox, the timeless solution is communication. We talked briefly about Dropbox as a data storage solution, but it's also a communication solution. One reporter covering the rise of Dropbox discussed how his wife used it to manage PTA fundraisers–it made complex communication among all of the involved parties easy.
Communication is a timeless solution. Before the advent of handwriting, indigenous tribes used paintings to communicate–and store–ideas. Some of the most renowned and celebrated inventions in history have met the communication need. Ask any school–age child about important inventions, and you'll probably get a list that includes Gutenberg's printing press. Other notable communication solutions include the telegraph, Morse code, telephones, radio, and cell phones. Today, communication solutions are endless, with new ideas hitting the market daily. From basic Internet connections evolved email, chat rooms, and video chatting. From smartphones we get more video chatting, texting, and applications such as Snapchat that offer unique ways to communicate. Communications solutions existed already, but technological advances allowed companies to meet needs and wants in different ways.
Once you establish that the solution is timeless, you just need to ensure that the product correlates to the solution. Dropbox lets users communicate by sharing almost any type of file–text documents, PDFs, images, PowerPoints, and videos–with other users. Not only can users share, but they can do so with ease. Dropbox doesn't require a lot of technical know–how or special software, and it reduces the strain on email and other systems. Users can even share files via Dropbox that are too large to share via email.
Dropbox wasn’t just solving any old problem; the founders identified a big problem – inconsistency and lethargy in corporate sharing and communications.
The Product Meshes with the Current Tech
Investors should never evaluate a product or startup in a vacuum–the outside market plays an important part in your decision, particularly when considering timing. A top concern is whether existing technology will support the product or idea. There are certainly cases where a startup company has had to create the infrastructure and technology to launch and support its product; however, it will take a lot of resources, cash, and support structures to continually adapt the product to meet the market’s changing needs. As an angel investor, bankrolling a startup with such changing needs and expenses certainly is not where you want to be.
Instead, look for ideas and products that can integrate into existing technology–even better if the idea utilizes existing technology. Snapchat is a great example of this–the app combines texting and pictures, letting individuals share time–limited photographs. Snapchat is only possible because of the existing technology–smartphones with cameras, as well as wireless networks capable of transmitting photographs and text in almost instantaneous fashion. Even better, the support technology was widely popular before Snapchat entered the market, which probably accounts for the immediate acceptance of the app among users.
Looking at Dropbox, you can see the same development. The foundational requirements were all in place: personal computers and mobile devices, the Internet, capable technology users, and software to create and read all the information that would be stored and shared using its services.
When considering whether technology aligns with a product or idea, ask yourself and the founder:
- How will the product or service reach users?
- How will consumers use it?
- Does anything have to be built before the product can be used?
- Does anything have to be built before the product can be marketed?
- Does anything have to be built before the product can be disseminated?
Launch something timeless.
It might seem promising to be the innovator–the Henry Ford of whatever industry is represented by the particular startup you're evaluating. Despite common belief, however, Ford didn't invent the assembly line. He also didn't invent the modern automobile, interchangeable parts, mass production, or the combustible engine that made his Model T possible. In short, Ford wasn't the first mover. He was the mover we remember, in part because he studied what came before and he used that information to meet a market need with a solution that didn't have many of the problems of previous solutions.
The first–mover is always at a disadvantage. Consider our poker game–or any other game, for that matter. The person who moves first has not seen anyone else move. The person who moves first moves blindly. The person who moves first has nothing to build on. In poker, the last to act has the advantage; the same is true in product launches.
As an angel investor, it's okay to consider something exciting and innovating. Dropbox was innovative enough to catch the attention of top CEOs in the industry, including Steve Jobs. But look for founders with ideas that build on existing solutions, offer solutions to existing limitations, and make use of information about previous challenges and failures.