Simon’s Blog

CNN Money had some fun asking some top-tier VCs whey they’d like to invest in. Collectively, there was an imaginary $100M on the table. It makes for interesting reading - it’s not often you get a cross section of what’s at the top of a diverse set of VC minds.

I was particularly interested to see what the VCs are thinking about, in the spaces I’m in.

20% of the $100M was for drug and diagnostics development: $10M for drug reprofiling; and $10M for a next-gen molecular diagnostics play. Drug reprofiling is a tricky area - Kate Mitchell from BA Venture Partners correctly identifies IP as a key issue here. We actually have a collaboration at the moment, where we’ve been developing a new technology that can be used for drug (re)profiling. It’s an interesting area. The big question in my mind, though, is - if you really have a powerful technology that can identify new uses for old drugs, do you actually get a better return, given the IP situation, by using the technology to pick the right indications for new drugs?

The $10M next-gen diagnostics play idea, from Bill Ericson at Mohr Davidow Ventures is also close to my heart. We developed a technology in 2003 (an antibody microarray technology) where we identified the same application (detection of super-bugs) as potentially low-hanging fruit - although we were really interested in using this technology in a personalised medicine play in the long-term. However, this kind of next-generation technology play simply wasn’t financable in 2003 (that was a really bad time for VC invements). There are a number of technologies around that could be used here: I’ll be interested to see if Bill ends up financing something in this area.

In the mobile space there were two themes: one ads and one search. Jeff Crowe, at Norwest Venture Partners, has the idea of a location-based marketing system. I think a million people must have had this idea. We were approached over a year ago to partner in the development of such a system. I said, “No” to partnering on that then - in no small part because the location-based services you need just weren’t there. Today, you could probably have a go at doing this - so I think Jeff is right that you have to place your bets now. The other mobile ad idea is from Charles Moldow at Foundation Capital. Not sure I understand it - it sounds like he wants companies to send SMS spam to people. I don’t want to receive unsolicited texts on my phone, and neither does anyone else, I suspect. Maybe I misunderstood this idea.

The final mobile idea is from Danny Rimer at Index Ventures. He wants to spend $2M for this idea. Hmmmmm… $2M?… I was visiting Index in London a few weeks back and their video conferencing system must have cost more than that!! Well, not quite - but it is very swish. Anyway, he wants a mobile search system, with a user interface that’s designed for mobiles (rather than the standard ports of PC systems that Google and the like do). I think it’s a good idea. The speech recognition part could be useful as a part of the interface. I’ve done a fair amount of work on speech recognition in the past, and I think this kind of mobile search application could play to the strengths of speech recognition technology. However, I suspect we’re probably a year (or more) away from being ready to include speech recognition as a core part of mobile apps. I agree with him about the problem of data entry on mobile phones too, which makes many current apps unusable; and I do think that effective mobile search could be transforming if you can get the right kind of integration of things like shopping search, driving directions and even special offers.

On balance, I think Danny Rimer’s idea is probably the best of the bunch in terms of the return it could produce - I can definitely see a route to a valuable company with that one (the biotech ideas could also produce some significant volumes of cash, I suspect). It’s also pretty difficult to execute well - which means there could be some nice technical barriers to entry. There’s a bunch of other ideas in the article. So, if you haven’t read the CNN money article yet, I recommend it.

[Via Scoble]