I wanted to share my thoughts on what I would be looking for in an internet services investment. These are my personal views – not those of Esprit.
Thanks to Brad at Union Square Ventures for his great series on investment philosophy which provided the inspiration for this post.
I echo all his comments on scalability, defensability, IT leverage and disruption and for a detailed discussion on these topics his posts are a must read. I’m going to keep it sort and sweet here though.
For me the best internet service plays have two characteristics:
- Execution is everything – so it’s got to have traffic and momentum
- The business model should be self evident from the service – e.g. Skype limited free calls and some paid for calls
Getting in ahead of these two things takes great people a lot of faith.