Noel Coward, the English playwright and actor, described the motivation behind writing his most famous song as: “Some years ago when I was returning from the Far East on a very large ship, I was pursued around the decks every day by a very large lady. She showed me some photographs of her daughter – a repellent-looking girl, and seemed convinced that she was destined for a great stage career. Finally, in sheer self-preservation, I locked myself in my cabin and wrote this song – “Don’t Put Your Daughter On The Stage, Mrs. Worthington”.
I know how he felt. As I spend more and more time in meetups, startup conferences, incubators, co-working spaces and accelerators, it feels that our industry has adopted the same rose-tinted spectacles in the belief that every Tom, Dick and Harriet can be trained to be an entrepreneur. Hence the following update:
Don’t let your Children do a Startup, Mrs Worthington.
Or so it appears if you look at where the funding’s going. This week Jawbone, maker of the Bluetooth headset and more recently of the UP wristband, managed to raise $93 million in debt financing based on sales of its new products, with the rumour of a further $20 million in VC funding to come. It’s not alone. Earlier this year Fitbit, founded on clip-on devices, but now another player in wrist real estate had VCs falling over themselves to give it an additional $43 million.
In contrast, the smart home market has begun to look decidedly unexciting. After the Nest love-in, which raised them $80 million at the start of the year, their German rival tado only managed a measly $2.6 million from its previous investors. I’d always tended to discount the Nest fundraise, not because of the product, but because of their heritage. Ex-Apple staffed start-ups in California with slick products seem to get VCs wetting themselves in much the same way as followers of the cult of Apple do at the launch of a new iPhone.
If you take a look at the media coverage, it’s also pretty obvious where everyone considers the action to be. It not what we live in – it’s what we wear on our wrist. Investing in Smart Home looks rather dumb.
Over the last year I’ve been watching the rise of 3D printing projects on Kickstarter, as they’ve progressed from fairly simple ones to the more recent, high profiles successes, such as the Formlabs Form 1 3D printer, which is a project to commercialise a printer, software and compounds. That one project alone has attracted just under $3 million in funding from over 2,000 backers, over 1,000 of whom will end up with 3D printers by next May.
Which made me wonder what the TSB is going to use my tax-payer’s money for in this competition, as it looks as if there is already a perfectly workable funding model to develop 3D printers. Or do they think that 3D stands for Dead Duck Donations?