Investing in good startups is not about hyper-activity but patience. There are endless opportunities but good opportunities don't come along very often so good investors have to know the people behind the business and act accordingly when the time is right.
Hosting SG Innovate
This week DMG hosted Hsien-Hui Deputy Head of Investments at SG Innovate, the Sovereign Wealth Fund of Singapore. SG Innovate has two funds (one for Singapore only and one international) and HH focuses on investing in 'deep tech' startups around the world.
As well as two DMG portfolio startups (Coconut and Century) we met with four other startups we have known for between 18 months and 6 years. All the startups are working on difficult technological challenges and the DMG 'M.O.' is to patiently get to know the founders over time to observe how they execute and to find out how (if at all) we can be helpful.
Some observations of the startups we met:
- They are working on deep technological challenges. They are not working on something they have seen a startup be successful with elsewhere and have copied (there are enough food delivery services for now).
- They have been working on this when the timing was 'wrong'. Founders have to be ahead of the rest in their thinking - this means working and getting some sort of traction with a product that is obscure and risky. After doing this for some time it will become obvious (Note: what3words launched in June 2013).
- They take on feedback and are constantly learning and improving but always have a core conviction about what they're doing. Because when you strip everything else away the 'WHY' must be so strong it gets you through all the dips and doubts.
We ended the day with a drink in the Chiltern Firehouse and reflected on our excitement for 2018. This year feels like the time in the cycle where new and exciting technologies begin to hit their stride. The smart people who have been working on AI and ML in FinTech, EdTech and 3D/AR have got their timing right. They've been working on this for the last few years while others dabble with yet another food delivery service.
2018 will be a strong year for those who've patiently done the hard work.