I attended an interesting speech by Vinod Khosla a few weeks back. While many venture capitalists bemoan the lemming mentality in the industry, few are actually willing to swim against the tide and fund ideas that are out of fashion or out of favor. That got me to thinking — what are 4 businesses that would be interesting to start in areas that many have left for dead? I must confess that I am not sure that *any* of these are worthy of funding, but it is an interesting intellectual exercise to force yourself to think as a contrarian.
I am not sure that any of these ideas will fly, so write back to me if you have thoughts on any of them. I chose to restrict the field to IT-related contrarian investments:
Database Technology – Oracle and IBM are duking it out on the high end. Microsoft and MySQL are battling on the low-to-mid end of the spectrum. What room exists for a new entrant? Well, the relational database is going on 25+ years of commercial deployment and perhaps it is time for someone with a new data management paradigm to challenge the incumbent database players.
Mainframe or “Big Iron” Computing Company – With the move toward low-cost, federated computing platforms based on commodity Intel processors, who would want to start a company to build big systems? Well, if distributed vs. mainframe/centralized computing is just a pendulum that swings back and forth from time to time in the world of IT, it seems that the world is beginning to turn its back on the need for big, centralized computing resources. If the current infatuation with distributed/utility computing is just the latest chapter in this ebb and flow, there will be a time when people start looking for traditional centralized computing solutions.
Internet Retailing Concept – Harkening back to days gone by, why not take a fresh look at Internet-based consumer-facing concepts? There are a lot of things that make consumer-facing Internet concepts a lot more attractive (less time and money needs to be spent educating the masses, reduced fears about credit card safety/security for online transactions, higher level of average Internet savvy, etc). While payments and entertainment might be overfished waters, there are lots of other types of transactions that are candidates.
Wired Internet Access Provider – Competitors howled when it appeared that MCI (FKA Worldcom) was going to be able to emerge from bankruptcy without a heavy debt and obligation burden. This tell me that perhaps there is money to be made for firms who 1) are not saddled with the debt burden of a massive nationwide buildout but can capitalize on the fact that others have built out such networks 2) have the cash resources to endure a period of difficult prices for the near term and 3) understand how to package and price service for medium-to-large enterprises. With the meltdown in telecom, I am sure that there must be a collection of individuals out there somewhere with the wherewithal to pull this off.