– Another blockbuster technology introduced to the market in 2000 was the USB flash drive, patented one year earlier by Israeli company M-Systems. The company had been founded 11 years before in 1989 and when btov partner Christian Reitberger discussed an investment by Apax into M-Systems in 2004, cash needs were not pressing enough anymore to find common ground on valuation — much to the detriment of Christian who therefore did not participate in M-Systems’ $1.5bn share deal exit to its long term competitor Sandisk. Another 10 years later those M-Systems investors who had kept their Sandisk stock watched Western Digital buy Sandisk for $19bn.
– The best-selling video game console of all times, the Sony PlayStation 2, came out in 2000 and has been sold more than 155 million times. Gaming is another one of those markets that hasn‘t gone away and which led to ever increasing investment successes since then, highlighted by names like Zynga, Rovio or Peak Games. While the population of “gamers” only went up over time, no other dedicated computer gaming device broke the record sales of the PS2 since then.
– The foundation of Ocado & takeaway.com and the registration of the Tesco.com domain — all three in 2000 — are a reminder that not only technology development takes time, but also some basic behaviours like grocery shopping are sometimes slow to change. 20 years later the „corona lock-down“ demonstrated a still quite limited capacity of online grocery stores (at least here in Europe) which is certainly not explainable by a lack of enabling technology nor visibility of a large addressable market.
A first and almost too obvious as well as often cited takeaway from those anecdotes is about the importance of the right timing for technology and products to be successful, and even more so for investments. „Timing isn‘t everything but nothing really works without the right timing“. As much as we have learned this to be true, we have also come to the realisation that good timing can oftentimes neither be planned nor analyzed in a due diligence with much accuracy. So we would paraphrase our learnings about timing over 20 years in VC in some rather simple statements:
- your average time to exit will be at least 50% longer than you thought
- your average „winner“ didn’t looked like a winner for at least 50% of the time
- those management teams who were ready when timing was right would probably have been ready at any other moment in time before, ie. they weren‘t just betting on anticipating this one point in time, but constantly working hard to catch the wave whenever it shows up.
We look forward to investing with you for at least another 20 years. We‘re in it for the long run and we’ll do our best to be ready at any point in time. Remember two out of the 5 FAANG companies were public stock already in 2000 and another two of them were young companies and possible investment targets for a well placed venture firm.
This blogpost was originally published on Medium on July 7th, 2020.