The Dangers Of Being Too Early

I have been reading Whiplash, a book I recommended here last week. It starts with the story of the Lumiere brothers, who are credited with the invention of “the moving picture.”

As told in Whiplash, the Lumiere brothers started showing films to audiences in 1895 using their patented cinematograph. But by 1900, they were out of the film business and had moved on to color photography. The industry they helped to start went on to be one of the biggest new industries of the 20th century.

I often think of the formative years of the Internet, in the early/mid 90s. There are a lot of people from that era that remind me of the Lumiere brothers.

I was in a Board meeting on Friday in my office and one of the executives of the company that was having the Board meeting left to get coffee or use the rest room. When he came back, he said “why do you have one of the Josh Harris Gilligan paintings in your office? I explained that the reason Gilligan hangs in my USV office is to remind me that being first to something doesn’t mean you will profit from it. Josh Harris was the first person to show me audio streaming over the Internet. Josh was the first person to show me video streaming over the Internet. He did both of those things at his Pseudo Programs company that he started in 1993. Around the same time, 1993 ish, Josh predicted to me that auctions would be one of the first big businesses to take shape on the Internet. That was roughly two years before eBay was founded. Josh didn’t profit much from any of his visionary efforts or insights. But there is a Josh Harris painting in my office because I respect being early more than I respect making profits. I think the latter is easier than the former.

Which takes me to some things we have been thinking a lot about at USV recently. Things like Blockchain and Genomics. We think we are very early in these two important technological revolutions. We are investing actively (but not heavily) in one of them (blockchain) and trying to find the right entry point to the other one.

I think that the investing we are doing in these sectors right now is more likely to be like Psuedo Programs than YouTube or SoundCloud.

But I also think that you have to be early to learn the technology and the markets and build the networks and relationships that will allow you to see, understand, and invest in YouTube when it shows up. What you don’t want to do is lose patience or interest and move on, like the Lumiere brothers did.  Early stage VC is a marathon, not a sprint. That is true in everything, from the hold periods, to the work you do with a portfolio company, to the patience you must show towards a sector you think will be important. It is hard to sustain the enthusiasm sometimes, but if you have conviction about something, you have to stay the course.

#blockchain#genetics#VC & Technology

Comments (Archived):

  1. awaldstein

    If we are truly that early in blockchain, normal folks like CIOs and CMOs, and Fin Tech execs who need awareness not intimacy then are in a much less stressed stage than is being made out.True or no?

    1. fredwilson

      yeah, i think it will be a while before this technology impacts them signficantlyi remember Josh Harris predicting that Psuedo would create problems for the broadcasters and cable channels. he was right about what would happen. but it was not Psuedo. it was Netflix.

      1. awaldstein

        Sounds like brilliance that is beneficial to all of us.Some of us predict the future and we should all pay attention.Some actually build it and end up with the rock hitting the moving train.We need both.

      2. LE

        it was NetflixAlso obvious advances in technology, licensing, as well as broadband almost everywhere [1] that were around to even put Netflix in a position to be Netflix. 56k (consumer) was fast back in 1996 and the internet was not ‘always on’ except if you had a dedicated connection.[1] This is similar in a sense to what is confronting wider adoption of electric cars right now.

      3. Amar

        Being brilliant about predicting the future is hard enough to begin with. Being brilliant at predicting and figuring out how to make money with that skill is even harder! 🙂 We take the rare few who pull this off for granted but they are definitely uncommon. Said differently, Josh Harris is definitely in elite company (based on what you wrote) but it is also a reminder to me that the Elon, Jobs, Mark, Travis and the others in that club are truly special.

    2. pointsnfigures

      When @wmoug:disqus gave his talk in Chicago on The Business Blockchain, one corporate treasurer asked a question about trust. They spend a lot of money vetting vendors, clients and associations. They found it improbable that they would use blockchain as a replacement.It’s too soon, but it will happen.

      1. William Mougayar

        Reminded me of this saying by John Cage. “I can’t understand why people are frightened of new ideas. I’m frightened of the old ones.”

        1. awaldstein

          Too easy yet I agree.If it is too early to build a portfolio it is too early to be driven by fear of waking up and being obsolete.I keep asking for a level set on urgency.I think I have one now.To be fearful out of ignorance is one thing. To sell fear without a vision of a world where it is turned upside down, is simply hyperbole.Or so I think this Sunday morning.

      2. awaldstein

        I have been too early more than once.I’ve let my passions make me too early repeatedly in some things.i’m more and more relying on my innate ability to understand the movement of markets and human behaviors to be my guide.

  2. Elia Freedman

    This post speaks to me, Fred. I got into mobile computing in 1997 and ed tech in 2002. I’d like to say perseverance pays off but can’t yet. The story isn’t quite finished though.

    1. fredwilson

      Pseudo Programs started in 1993. YouTube started in got into mobile computing in 1997. iPhone came out in 2007Lumiere Brothers showed films to an audience in 1895. Griffith put out Birth Of A Nation in 1915.these things take time.

      1. Twain Twain

        Helicopter drawn by Da Vinci in 1493. Commercial helicopters finally arrived in 1940s. https://uploads.disquscdn.c…Meanwhile, in the Internet Age … https://uploads.disquscdn.c…All of us are “standing on the shoulders of giants” and it’s not about who’s first to something.It’s about whether the market is awake to the fact it NEEDS+WANTS that tool/good/service/relationship and how much inventors/investors want to wake up the market.Naval’s definition of Blockchain, which boils down to “It’s the protocol for value exchange that the other layers of the Internet don’t provide,” would wake up the commercial market more than all the confusing references to cryptocurrencies and trustless ledgers and hashing-mining.Being first matters only if invention / investment is a sport.However, if they’re not sports but social endeavors then there’s no need to be first to market.There’s only the need to be inclusive, representative and universally comprehensive and comprehensible.

        1. panterosa,

          @Twain, I wonder if early is somehow related to late, and the helicopter is a perfect example. I am way early according to some on our learning platforms, but I would argue this is really old and classic, which now seems timeless and modern.

          1. Twain Twain

            Exactly. Da Vinci wasn’t early. Everyone else wasn’t late either. If no one except Da Vinci could see his drawings, then how could they be early or late? His ideas would be completely unseen so undefinable and unbuild-able by them.It’s not only that we may not have access to the same information as someone else (so this is why transparency of data does make sense in the “Blockchain vs walled data gardens” war) BUT, when we do see the same information, our internal modes of perceptions affect how we experience, define, value and trust the same piece of data.Notably, when communicating, we define by analogy and qualification (it’s a sprint / marathon, it’s Facebook for cats, etc) and proverbs (Facebook = birds of a feather flock together = filter bubbles).The language that we use in definitions (too early / late, old+classic = timeless+modern) affects our perceptions of what’s happening, reality-truth and future predictions.Meanwhile, there’s this whole other language of maths, code and business KPIs (quantitative risks of investment, probability of ROI, power laws of engagement, quantity of content processing etc.).Most of the reason we’re getting whiplashed and hit by “black swan events” (Trump’s 2016 election and 2008 global financial crisis etc — which are caused by the same weaknesses in the algorithms, btw) is for the simple fact that the two types of language are incongruent and the data sets for one (human perceptions and experiences) don’t accord with the data sets for the other (mathematical pattern recognition and business objectives).So that’s what we have to invent tools to fix those incongruences before any of our systems can be defined as “intelligent” and “learning”.EVERYTHING is subjective and relative along with it being objective and rational — even the words “early” and “late”.Da Vinci, Einstein, Schrödinger and other great thinkers showed us that subjectivity and objectivity are entangled and shouldn’t be reduced to binary objective definitions.@fredwilson:disqus @wmoug:disqus — The more I read into Satoshi’s ideas, the clearer it becomes that we both saw the 2008 crisis and thought, “The technology should and can be better.”The ideas of distributed decision-making and data transparency are the same. Yet the areas being solved are different:Blockchain = protocols for value exchange not provided by existing layers of the Internet.My system = protocols for values definition not provided by existing language structures of the Internet.

          2. panterosa,

            How you frame a story is the lens you see it though, and changing the narrative changes the lens and frame. This is why I’m working on basic building blocks for describing patterns, and I come from an art and language background. The goal is to standardize descriptors young, so common language can be found, and creativity can begin with more solid footing.In many cases you will most likely agree with me that it is assumptions which cloud the discussion of a common thing, assumptions of the other’s knowledge, which in not matching your knowledge then creates for base level chaos (that often survives into higher levels without being caught, hence making for disaster).Language affects structural thinking, so I am working backwards to language acquisition based on visual-spatial learning. The second year of life until 3-4 is key in my view.

  3. pointsnfigures

    My friend invested in ebooks in 1995. Didn’t work then. Eventually played out. One thing that is really hard; having the financial staying power to stick with a thesis. In Genomics, the price of admission might be too high for most to get involved from a financing angle.Immersing yourself into the ecosystem is essential to understanding. But you have to try and have a healthy detachment. You can’t drink the Kool Aid. Questioning points that are made strongly by people is something you must do. That gives you as objective a front row seat as you can humanely have.Congratulations on the Army win yesterday. Yes, breaking through takes time! (USAFA the Commander in Chief champs again though)

    1. Tom Labus

      Being on the sideline is just as valid as a long or short.

    2. ShanaC

      Genomics is expensive because 1) it’s complicated. Epigenetics, environment,multi use/multi read genes and all that jazz makes for dirty data, making for complex and expensive data.2) samples are expensive. Verified and group samples with medical and familial histories even more. Add in looking at stuff for pharmaceutical development, and your in the gee whiz category.Eg: for whatever the reason, I got into a discussion with a genetic researcher about sample costs. I found out that with a self reported family history to enter databases, my genetic material costs about $3-5k if a researcher was to sell it. Add in more clinical genetic tests to verify my reports, that’s about $5-7k.Start getting me, all the women in my mother’s family, my grandfather, and we’re looking at over a million dollars. And you need more than one family similar to mine for research purposes.Ironically, I can’t sell this data on my own (though I also don’t want to)(for those curious : I’m really ashkenazi on both sides. My mother, my aunt, and my grandmother all had breast cancer, and in my grandmother’s case around age 32 in the 1970s, which she most likely died of. My mother, aunt and grandfather got genetic tested together in the 2000s. My mother is definitely brca1/2 negative, and my aunt and grandfather share one of the brca1/2 ashkenazi founder mutations. All the women, barring my great aunt, aka grandmother’s sister, live in new York metro area or Philadelphia. I’m the only not orthodox member. Getting all of us as a group is medically valuable because you can rule out lots of other causes.)If I had the money/opportunity, I would be trying to find low cost liquid biopsy as preventative measures companies to invest in. Mostly because radiology is expensive as a screening measure, and this means pcp can do test ordering en mass. That and it saves people time, so it’s an automatic opt in if you are already doing other screening

      1. Ian Katz

        Imagine if using a blockchain you could be paid byanyone using your data to make a profit?

    3. Mauricio Macedo

      Timing is everything, some people can imagine what will happen in the future, but it’s hard to predict when future becomes present. I remember reading about IPTV in 1991, but at that time could barely imagine the server/network capacity needed to stream one piece of video to each person. Maybe Youtube wasn’t at the right time, with capacity to serve billions of videos in high quality, but they were able to wait it out. Same case for Amazon, starting out with books but eyeing hundreds of billions in ecommerce, they built infrastructure and built some more and wait it out until it became a reality. So the answer is to have vision, time, money and patience 🙂

    4. JamesHRH

      the most impressive early stage investor I ever met did lots of deals where he put in $100,000……when he was worth $100’s of Ms.Jim Roger – George Soros JR Partner – rolls around the world cutting $5000 check to bakeries in African countries that have suffered from civil war for 20 years.Humility & caution are big assets.

  4. rhaphazard

    If you invest in a company that is developing the foundational technology of a system, would it be a conflict of interest to invest in another company that you think will win in that system but in the business aspect?How would you balance that out? Have them work together?

  5. bernardlunn

    The one way early birds have won out is in getting bitcoin early. There was no penalty to being early there.

    1. fredwilson

      Depends how early you were and if you sold

      1. bernardlunn

        Yes, I was thinking of the 2009/2010 crowd. Even if they still hold they did great.

    2. William Mougayar

      As they say, the early bird gets the worm, but the 2nd mouse gets the cheese. 😉

  6. William Mougayar

    Being early for a long period of time gives you a perspective, context and insights that others don’t get. It lets you connect the dots together. And that gets easier when you have more dots to work with. That insight was given to me by Alvin Toffler. He said they were fortunate to have been exposed to many people who each were working on one aspect of the future. That facilitated his job (with his wife Heidi) to connect the dots and see the whole picture. Truth is that no one has the whole picture. But you want to be the closest to seeing it when it gets clear.

    1. awaldstein

      very true.but as an investor and entrepreneur being early as a serial mistake is can also be a disaster.

      1. William Mougayar

        Yes, as Fred was saying, you want to dabble when early, in order to be in the game, so that if you’re wrong, it’s not that disastrous. But the lessons you learn could be big.

        1. awaldstein

          no question. no argument. no digs.i have worked hard and asked many–like yourself–where is what I do today and tomorrow is impacted by this?It is and the idea of decentralized community and markets is something that I need to keep in my head.But it has not impacted my decision making except the needed humility and reminder that everything indeed does have the capability to change.So there is need for awareness, not urgency nor any rationale fear which is being peddled as understand this or you are screwed.

          1. William Mougayar

            You ask good questions, and this is one of them:”where is what I do today and tomorrow is impacted by this?”

          2. awaldstein

            Thanks.I believe in the value of figuring out the questions that drive projective thinking.And honestly working with clients figuring out the right discussion points about questions is my favorite workshop activity.

    2. Pete Griffiths

      It’s funny – the thesis of Toffler’s ‘Future Shock’ is being touted by Thomas Friedman as one of his ‘mega-trends.’La plus ca change.

      1. William Mougayar

        Yup. Toffler predicted so many things, so early. Powershift is a great re-read, up to this day.

  7. spideri

    And the Lumiere brothers weren’t even the first.Louis Le Prince, who shot the world’s first film in Leeds:

  8. Peng Jin

    Conviction is much easier said than done. I remember working on the first Chinese ecommerce company’s NASDAQ IPO back in 1999. Everyone kept on saying ecommerce would be the future, but I doubt anyone would have dared to imagine it will be a 1.5 trillion RMB biz in 15 years. In reality, people are caught up in cheap talks, not real convictions. I particularly like what you said about marathon vs. sprint. If it is a true trend backed by real market power, there will be opportunities along the way. The challenge though is not fall too much in love with existing portfolio companies and keep an eye out for new teams and biz models. I don’t think there is ever a “best time” to invest in any trend.

    1. fredwilson

      That last point is spot on and is where I have made many of my biggest mistakes

      1. pointsnfigures

        last point also speaks to valuation questions. “that’s too expensive” can be a wrong answer.

      2. PhilipSugar

        This is the brutal hard part about investing, or having an existing company. It is so hard to just throw away your existing business model. It is so hard to go in a different direction.It’s easier sometimes to start from scratch.But early is the same as wrong.Also this is why it’s important not to get to far ahead of your ski’s. There are many “overnight successes” that took decades.I’m not debating whether PokemanGo is a success but it took well over a decade of work to culminate.

        1. LE

          This is the brutal hard part about investing, or having an existing company. It is so hard to just throw away your existing business model. It is so hard to go in a different direction.By traditional thinking it’s also foolish actually. We have no data available other than anecdotes on the success and we have practically less on the people who gambled and lost. There are probably more than a few people who did the ‘chuck it route’ in the 90’s and lost. Most who gambled though were in a position of ‘have nothing have nothing to lose’. In the 90’s there weren’t many people that I knew of that were in secure positions and left them to gamble on the internet. That doesn’t mean it didn’t happen but for some reason it seems unlikely that it did.So despite what anyone thinks no Sears could not have been Amazon.

          1. Ovidiu Schiopu

            Not sure who said it first but I like the notion that when you’re business is successful, that’s when you should be trying to put yourself out of business…

          2. Amar

            hah! well said. Too many armchair quarterback with the “wisdom of hindsight” in the world today.I recently read “Shoe Dog” – the Phil Knight memoir. It is a fantastic read and read as being brutally honest. Lots of arrows in the back and years of “have nothing have nothing to lose” mentality … he did not follow any best practices — rather just focused on growing, surviving and winning. Yes it came at a cost but that is the truth.

        2. Susan Rubinsky

          Never be first to market is my motto. My favorite job ever was for a startup that no one understood because it was first. Always be second or even third.

      3. Pete Griffiths

        How do you recognize a pioneer?He’s the one with arrows in his back.

    2. Manuel Zeiler

      Don’t you think the marathon is getting ‘shorter’ in the fast technology adapting world that we have right now? Especially when you compare it to 20 years ago.

      1. fredwilson


      2. Peng Jin

        I don’t think so. Just to clarify, marathon refers to the maturity of the biz and underlying industry, not valuation.

      3. JamesHRH

        20 years ago is back again.

  9. Vendita Auto

    On a similar thread screening on the BBC for 29 days if in the states The Early Days:

  10. Tom Labus

    Being early may not be as damaging as it once was since trends and timing seem to be contracting all the time. At least in the market, you can exit and if your conviction is still there reenter. Some of my best runs have been on a 4th or 5th attempt but I’ve also been left at the starting gate too.

  11. Frederico Mesquita

    what i have come to believe is it takes a different set of experiences to build the future than to be able to realize some things will take longer than predicted. While the later relates to being more narrow focused, especialized and tech kind of person the former takes a broad exposure to different fields and a more social, complex, integrative knowledge.

    1. Twain Twain

      I agree with you on this: inventing the future takes a broad exposure to different fields and a more social, complex, integrative knowledge.There is a lot of incremental innovation happening at the moment which does not sum up to that social, complex, integrative knowledge.

      1. Frederico Mesquita

        Most (nearly all) people don´t have the time and/or desire to pursue such path. It is often financially insecure, risky, out of comfort zone, time consuming and, therefore, uncomfortable.

  12. LE

    Having been around at the start pretty much of the Internet and even using the arpanet before that in college there was no guarantee or even close that that it would become as useful and widespread and large as it is today. [1]There were many chicken and egg issues and of course technology issues. Remember dial up over AOL? It could have potentially not spread for any number of reasons like it has. Not saying it wouldn’t have been large or useful but not in the same way it is today. As only one example broadband required a tremendous investment on behalf of the telcos and jack-hammering streets and even the technology had to exist and be implemented by cable companies and so on. Lots of early good press, available money for investment which created extra backbone which then became cheap to use (I am not a historian by any means but…) Many young people going into Web 2.0 as a result of startup mania which has driven brainpower into all things internet and technology and away from other things. In no way was that assured w/o the widespread press of people who hit it big and made a fortune which in no way was assured. The ‘thing’ that lead to the ‘thing’ as I say. Remember when kids went into medicine to have a great living (still do of course but not the same as the golden age) or law (forget that now).And just take a look at all of the changes that happened as a result of Steve Jobs and the Iphone since 2007. Everything mobile now. No way was that a sure thing to happen that anyone could easily predict would. [2][1] A few things that I did early that became big but required advances in technology to do so: Radio Controlled Helicopters (now drones but also RC), Photography (now digital) both niche back when they were hobbies of mine. Another example of ‘thing that lead to the thing” Karate? Craze started by the TV show “Kung Fu”. CB Radios? Craze and widespread adoption started by the oil embargo in the 70’s. (Then of course it petered out).[2] Remember that flying cars (back when, the 30’s or 40’s?) also were thought to be almost a sure bet and kind of made lots of sense but that never happened.

  13. Ric Fulop

    Fred, I remember using gopher the first time I bought a book on Amazon. I’ve been early and I’ve been late and early is def better. Even better is to be early and have the team ready to catch the wave when it takes off. Just like a surfer.

  14. Omar Ismail

    Hey Fred,I dont usually comment here but this struck a chord. The same thing can be said from the entrepreneurs side. Timing is such a critical thing, and its important to keep your finger on pulse of upcoming industries.For example, i am in my mid twenties working as a software engineer and want to start a company i am passionate about. I believe when the time is right i will start an education company using Augmented Reality, but its still too early. Best thing to do as an aspiring entrepreneur is to position yourself (skills of AR [Unity3d], level of depth in industry [education], and toy projects [using existing VR]) so that when you spot maturity of the technology, you can execute on it.

  15. kevando

    I just started reading Whiplash and it’s one of those wonderful moments when you realize you’re about to hear someone articulate the weird thoughts & feelings you’ve been unable to put words to. Thanks for the rec.

  16. Matt Zagaja

    I’ve been thinking this weekend about a lot of bets I made on myself and career that failed. I left a lot of income and stability on the table in my 20s. Some of these were bets that were definitely about being too early. Some of these were definitely about being too late (see: law school). My current bet is that government technology is an important thing. I think this is going to include blockchain. I am starting a position with the State of Massachusetts tomorrow as the lead civic web developer at the place called the Metropolitan Area Planning Council. No getting rich off stock options or ping pong tables like at the sexy private tech companies for me. Just more opportunity to learn and have an impact.

    1. LE

      I don’t know as much as you about law prospects but with your background (saw your linkedin) wouldn’t it make sense to get a job at the USPTO for a few years and then get hired away by an IP law firm? Or is it that you simply don’t want to do that type of law and it’s not practical to retrain in something else hot (like information security)?

      1. Matt Zagaja

        That’s a path lots of people take, but the USPTO only hires examiners at entry level with a full technical degree and mine was interdisciplinary (I actually have a large number of credits in chemistry as a technical concentration and my software and IT experience is all job related which is not sufficient for the purposes of federal hiring process). A few years ago I actually made it through multiple rounds for a trademark attorney posting there but because of the poor job market the competition is tough. Ultimately the larger screw-up on that front was aiming for an entry level government job during the fiscal sequester and an ongoing state budget crises. I should have aimed more for a private law firm job if I wanted to keep my work in that field.A bunch of my friends who graduated from college and went to law school are now partners at IP law firms in Boston. It’s a great gig and I think I would have enjoyed it. However I do not mind not having billable hours and think ultimately I will be able to have a larger impact doing what I do where I am going. So ultimately I feel like it worked out for the better.

    2. ShanaC

      I’m proud of you. More people should do what you do because tech should be a public good.I’d do it, but I know myself well enough to know I have a poor temperament for it

    3. cavepainting

      Hats off to you for the decision. Eventually life comes down to learning, being happy and having an impact. No one thing is better than the other, except in the illusion of the mind.

    4. Susan Rubinsky

      One of my favorite public sector CEOs I have worked with over the years started his career at the Metropolitan Area Planning Council. He says he left because he was sick of planning things that never got funded/implemented. He left because he wanted to build something. That was a long time ago, though and a lot has changed, but you know how the saying goes, the more things change, the more they stay the same.I was in a meeting with a public sector client on Friday. I asked them (for what felt like the millionth time) if they were sure they didn’t want to create online forms for all their PDF forms that people fill out and FAX in (Yes, you heard me, FAX in.) and they said, “No. Everyone loves to fill out the forms and fax them in. It’s the how most of our forms get submitted.” I said, “Did you ever consider that maybe the reason that the forms get faxed in is because that’s the only option you are offering?” Then the room went silent.

    5. SubstrateUndertow

      “lead civic web developer”maybe I’m just reading into it but that phrase represents a very deep well of “just in time” disruptive democratic reorganizational treasure required to pull our feet out of the rising media-ecology, organic-chaos, baptism by fire we present find ourselves inhabitingunpacking the future of data/civil-participation driven organic regulation/governanceto me technology is the universal substrate that ultimately drives all social/economic progress but “civil-web development”(broadly speaking) holds the potential to be monumentally important in pulling democratic-goverence out of the collective epistemological sink hole of abusive partisan/monied media manipulation now plaguing our present network-effect entangled/obsolete democratic structures.From the peanut gallery I tip my hat to you and others willing to blaze that trail !

  17. jason wright

    if people are looking for certainty they should always choose to arrive too late.

    1. Pete Griffiths

      Come on Leeds.

  18. Philip

    Beautifully said Fred, I lurk here often, and find it almost therapeutic to read, just as I suspect it is therapeutic for you to write. Just a thank you for penning your thoughts.

    1. fredwilson

      Thanks for leaving a comment. I like to hear from the lurkers

  19. Kirsten Lambertsen

    The thing about being early used to be that the vision was often way ahead of what the technology or infrastructure could support. I worked for a guy three different times over the years who was consistently too early with some of biggest technologies out there now. He did hit it big once, though, because he keeps swinging. And once is enough :)It feels like now, though, the thing about being early is that the vision is usually way ahead of what the market can support (blockchain being the popular example of the moment).I myself was early when I launched an interactive web app in 2000. I remember asking developer friends about the feasibility of what I wanted to do, and their reaction was “That sounds REALLY not secure.”

  20. iggyfanlo

    Two things:1. Bill Gross, founder of IdeaLab did a great TED Talk in March 2015 about timing and (he did some data analysis albeit a little dirty data) about timing being the single most important factor in startup success…2. When I was trading mortgages on Wall Street, a world class investor told me… “It’s great to be early, but if you’re too early, it’s indistinguishable form being wrong”

    1. ShanaC

      Very true

    2. JamesHRH

      one of the oldest VC maxims: early = wrong.Bill Gross is not the guy to quote on ‘single most important factor’ of anything.The fact is that there is more than one most important factor (personal fave is 3). Bill Gross is the guy who is not the founder of Google b/c ‘the single most important factor was to have lots of investments and lots of ideas brewing’……..which is not the single most important factor.just to be clear:- have a prepared market that pushes you forward (not you pulling them)- get right (this is the lots of ideas stage)- focus

    3. Adam Sher

      Seth Klarmen of Baupost Group said something similar in 2008, “sometimes being too early becomes indistinguishable from being wrong.”

  21. Thees Peereboom

    Or, in the immortal words of Benjamin Graham: “You are neither right or wrong because the crowd disagrees with you,” he wrote. “You are right because your data and reasoning are right.”

    1. Geoffrey Handley

      This is the first time I have felt compelled to add in my 2 cents (humbly).Honestly, I don’t ever want to be too early again. Ever.But that doesn’t mean that I am now always late or out of date either.I agree with all the +’s and -‘s pointed out, from both Founders’ and Investors’ perspectives, and of course backing visionaries requires, well, vision, into the future (amongst many other things). More importantly, we – the world – are dependent on the few, continually-too-early crazies and those who back them.”Backing early” and “being early” however are two very, very, very different beasts. For those that are, the easiest part of being a visionary and being early is making sense of the virtually incomprehensible – “…because your data and reasoning are right.”Even those that aren’t can rattle off the rest of the list – conviction, timing, perseverance, putting it all on the line, unwavering passion, sprint vs marathon, the list goes on. The reality however, is most don’t actually comprehend what it means to truly be “too early” – and make or leave some lasting, contributing impact to the later arrivals.In short, it is tough. It’s just not in most people’s make up, let alone the faint hearted. A mentor once put it to me like this:You can still be early and miss the bus, is easy.Being early and getting it wrong (or getting on the wrong bus!) a bit more difficult, but still pretty easy.Being early and getting on the right bus, is harder to do.Being early, getting on the right bus, with the correct fare, saying “good morning” to the driver, getting a good seat, offering your seat to an old person, catching up on some work and doing a bit of reading, not getting your wallet pickpocketed, not falling asleep, keeping random armpits and wandering hands away from your face and other parts, riding the bus all the way to the “the end” and getting to your destination safely, without leaving anything behind, and with time to spare???I understand why most people would get a lift, drive or call a cab.Simply put, being early – truly being early – is not as easy as it sounds. And often, on the surface, not that much more rewarding either. After all, you probably get to work in your car before I do, plus you get to sleep in too!The next time someone regales you with a tale of the time they were at the forefront of whatever revolution and laments that they were “just too early”, maybe ask them what time bus were they trying to catch?

  22. Jeff Hohner

    It may be too high of an estimate, but it seems to me that 90% of a win comes from just showing up, so your thoughts really resonate strongly with me Fred. The rest is art and timing. You have to make a deep, passionate choice to join in to be part of the early, formative stage of an industry, company or movement (and sometimes maybe it chooses you e.g. rock and roll :)). Going ‘all in’ early (the art and timing part) comes with huge risks and high costs (e.g. opportunity cost), and sometimes can pay off if you are in it for the long game or just real lucky (albeit only for a very select lucky few). One other path (out of the many that exist) is to make a number of smaller bets, watch, listen, test the waters, let the ingredient mix around to see what works for you until your gut tells you what to do (the art and timing part again). It has its risks and costs as well. However, the key part is to show up and be present. Just being there gives you the fighting chance to win. You have done that and are doing it now. So many other people in this community have done this as well and are helping make the world a better place, for which I am grateful.

    1. LE

      One other path (out of the many that exist) is to make a number of smaller bets, watch, listen, test the waters, let the ingredient mix around to see what works for you until your gut tells you what to do (the art and timing part again).This is actually close to what many small businesses do. Some get to be much larger by following this strategy. Often a new product or service takes hold for a small business simply because people (in particular the owner) is engaged and paying attention (by being close enough) to what customers are asking for and they end up seeing a viable market, product or service. Large companies I suspect have a much harder time doing this. The reason is the people that are interacting with the customers directly could be ignoring valuable information they are giving them (or might just not be observing or curious enough).

  23. ShanaC

    Genomics, eh? That’s a super hard area to be early in, because we know very little, despite mapping our genome…

    1. Pete Griffiths

      A very good friend of mine mapped out an approach to using modified T Cells to treat cancer approximately 20 years ago. She is now at a company that next year will launch a product that has a staggering cure rate for patients who are at the absolute end of the line using this very approach.It is indeed a tough area.

  24. Jim Haughwout

    Interesting. I was just at a conference last week on Advanced Manufacturing sponsored by GE Ventures. Steve Case was the final speaker (it was a DC-based conferenced) and highlighted his “third wave” of the Internet vs the Industry 4.0 “IoT” concept.His comment was that one should apply “perseverance”, toughing it out until all barriers to a “too early” concept are knocked down. I am curious how realistic that is–and how you can differentiated “too early” vs. “never going to happen”

  25. Pete Griffiths

    “I also think that you have to be early to learn the technology and the markets and build the networks and relationships that will allow you to see, understand, and invest in YouTube when it shows up”Very true. Smart.

  26. cavepainting

    In super-early stages, I wonder if it is easier to have conviction about the problem domain ( for example, banks and financial institutions charge too much fees for too little value-add) vs the specific technology (in this case, block chain or bit coin). While the conviction on the problem remains strong, the conviction on any specific technology needs to be loosely held until it is proven to solve the problem.

  27. Ovidiu Schiopu

    So wise and forward thinking. Kudos.

  28. Frank W. Miller

    Now genomics, there’s something interesting. Its only problem is its so early and it has such far reaching implications (unlike blockchain imho) that its hard to tell where the money will be made. Probably waves of money as things advance in a ragged way.But that’s why you do what you do eh? My wife and another researcher have recently identified gene sequences related to idopathic scoliosis. Very exciting stuff. A variety of big things are going to come out of genomics, I just hope you get lucky enuff to hitch your wagon to one of them. It will be tuff and there will be lots of money flowing around these things even before they show their ultimate promise.One question I’d like to ask you about this particular subject is what are your ethics surrounding the area? You seem to have no concern for investing in things that have anonymity as a component. The potential for abuse with genomics is staggering. How will you approach it?

  29. jean michel

    As someone working on a new idea and believing that it will have a great impact on the industry, this Pseudo story really resonates with me a lot. I’ve even watched the documentary movie and it felt bittersweet.One question I have is: How do you tell if something will go the way of Pseudo systems, or if it will become a Netflix? Not looking for an absolute answer, but just curious to learn more about your pattern matching, since I’m pretty sure you have better thesis on this than most people. I definitely don’t want to be the founder of a Pseudo systems even though I totally respect the founder, just like you do.

  30. ErikSchwartz

    I was doing VOD in 1993. I was doing mobile podcasting in 2006. I was doing second screen TV stuff in 2010.

  31. Jake Chapman

    Hey Fred, I think about this a great deal. There are plenty of industries I’m interested in investing in but where I think I’m either early or uninformed. Genomics is a great example. I know that no matter how much research I do, my first investment will be a dart throw relative to any future investments because nothing educates better than making an investment and getting involved. I worry though that its unfair to today’s LPs for me to make decisions partially based on the value it will bring to tomorrow’s LPs. How do you think about this aspect of investing “early”?

  32. Kevin Hill

    An interesting way to flip this on it’s head: what prevented the Lumiere bro and Josh Harris from exploiting their great ideas? Is it always infrastructure?

  33. BillMcNeely

    I was disappointed to learn that Josh Harris is living in Las Vegas in squalor. So much talented wasted.

  34. Todd Bida

    Being early thoroughly thrashes breathless, silo’d enthusiasm. (The Lumiere Brothers are a good example of what happens when you lose patience with a sector/interest/passion.) Fred, your advice on the ‘marathon of the early stage VC’, is also directly applicable to the ‘marathon of the early stage entrepreneur’…especially in the context of the resource-scarce marathon mentality that early stage entrepreneurs must adopt from the very beginning.Two particular points jump out in the afterglow of your post:1.) DNA-level persistence and conviction elastically paired with a vision for a better widget or process is required… and having a formal or informal team who share your passions and can keep tinkering away at them with you is crucial. (Edison’s muckers at Menlo Park were the engine inside much of what’s attributed to his personal success. http://www.businessinsider…. and “Myth Buster: Edison’s 10,000 attempts” from Rutgers offer some great additional context… .)2.) Nurturing the vision while satisfying the family/personal/social/financial demands. I’m reminded of another insightful post of yours from 2012 on The Startup Curve… . Entrepreneurs are well-served to count on the “Trough of Sorrow” and “Wiggles of False Hope” in the marathon that starts by ‘being early’, in the larger context of their lives. Building rigorous conservation of resources ($ and time) into your marathon’s DNA will enable you and your muckers keep your efforts moving forward “to learn the technology and the markets and build the networks and relationships that will allow you to see, understand,…” and deliver on the opportunity as you launch that first, less than perfect pilot and doggedly listen to those customers to refine and get it right.Thanks Fred for this thought provoking post.