Some startups are just unfundable but are developing things that change the world. In Barcelona I’ve found one. It won’t be my last, especially since venture capital is a LOT harder to get lately. I’ve been hearing a lot about deals that are falling through because the VCs are lowering valuations by a lot. As Ron Conway told me a few weeks ago it is a buyer’s market for VC now and they can pretty much demand anything they want.
But, this startup probably wouldn’t get funded in usual times. It’s sad, too, because it’s a technology that I really want. In fact, I want it to much that I videoed the founder showing it off so you can get excited about it too.
So, what is it? It’s a database that acts like a wiki. Sounds lame, right? But that’s why it’s unfundable. You need to spend some time with it to get why this is a world changing technology. The inventor, Terry Jones, has been working on it for 11 years. It is very significant new technology. Here, watch Terry on four videos:
Part I. 10 minutes.
Part II. 26 minutes.
Part III. 18 minutes.
Part IV. 11 minutes.
Terry’s blog is here. His company is called “Fluid Info.”
The videos got a long conversation going over on FriendFeed.
Fluid Info will be released in early 2009.
So, why is it unfundable?
1. It’s too general. VC’s don’t like to fund things that really will end up competing with Google or Microsoft. That’s too massive of a challenge and, despite their protestations to the contrary, VCs generally only invest in things that are more defendable than a general “take on Oracle and Microsoft and Google” approach.
2. Terry doesn’t have a team of stars. VCs tell me they say no thousands of times per year. What gets them to say yes? When there’s a team of stars that they’ve worked with before. Terry is just a visionary, to build a business the VC way you need to have a finance guy, a guy who is good at PR, someone who has done it before that can make the VCs feel comfortable. And, you need someone who is expert at the business model being proposed (ie, done it before).
3. Terry doesn’t have adoption. It hasn’t been deployed. He doesn’t have millions of users. VCs are now pretty much only funding things that are seeing sizeable growth and have some track record.
4. The technology is too hard to explain. After watching these videos for an hour you’ll be as excited as I am, but that’s too long. VCs want to understand the real proposition and pain point that it’s solving in a minute or two. Any longer and they’ll just say no.
5. He lives in a place far away from most VCs (most VCs are still in Silicon Valley, or Tel Aviv, Israel, Shanghai, China, London, Tokyo — it’s hard to find VCs outside of those places). That still is a barrier because most early-stage investors, like Jeff Clavier, tell me they will only fund things that are easy for him to drive to. That might be unfair in the age of Twitter and Skype, but a lot of funding events happen because of personal relationships and it’s hard to have those relationships happen when the visionary lives thousands of miles away.
Anyway, I can’t wait to use Terry’s new database and congratulate him on seeing his dream through. How many people would have given up? Hint: visionaries don’t give up on their vision just because they hear “no” a few times.
It’s why I’m very happy I got to spend a few hours over the past couple of days with him. Oh, and thanks to Tim O’Reilly for introducing us on Twitter.