Xconomist of the Week: Reed Sturtevant of Lotus, Idealab, and Microsoft Fame Talks Tech Trends to Watch

9/15/11Follow @gthuang

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the class raised their hand. Though any one startup is risky, when you think of your career as a portfolio, joining a startup is a pragmatic choice—and a lot more fun.

Second, yields are lousy across many asset classes and this creates an opportunity for investors in very early stage VC. The rate of value creation is steepest at the earliest part of a startup’s life, in relative terms, but it’s hard to capture this at scale. There is a structural gap between the amount of dollars that see this asset class as potentially attractive and the day-to-day process for investing in and assisting so many small companies. It is a check-size issue for [limited partners] and a partner bandwidth issue for [general partners]. This is driving innovation in accelerator programs like TechStars and Y Combinator and the various emerging micro-VC models. The dust has not settled yet.

X: Do you see a tech bubble? How do you think it will shake out in the coming years?

RS: No bubble, just the universe expanding. In 1994 I had one of the first 50 Web servers in Massachusetts running in my house. At the end of the ’90s during the dot-com boom there were only about 50 million people on the Internet. Today there are perhaps 2 billion. With that reach, and with so many fundamental tech platforms still nascent (mobile, cloud, tablet, sensors, med tech, etc.) you cannot overestimate the disruptive opportunities in industry and in life. I love it.

X: A lot of people say it’s tough to build a consumer-focused startup in Boston, compared with Silicon Valley. What lessons can we draw from your experience at Eons and Idealab?

RS: It’s tough to build a successful consumer-focused startup no matter where you are.

When success hinges on the emotional engagement of individual end users, you need a lot more than just strong engineering and sales & marketing. You need leaders with a great product sense and a fantastic user experience and design team. Those are creative roles that require insight rather than just skill and experience. People with those gifts will always be scarce and a limit to growth.

I wouldn’t sell Boston short, however. We’ve had plenty of successful consumer-facing businesses ranging from TripAdvisor, Kayak, Shoebuy, Harmonix, Carbonite, Wayfair (CSN Stores), Rue La La, to name just a few, to earlier companies such as Monster and Lycos. And don’t forget strong offline brands such as Zipcar and Staples.

Consumer-facing startups continue to be built and funded in Boston: Krush, Kibits, The Tap Lab, Gemvara and a surprisingly long list of others.

X: You mentioned this to me before, so I’ll ask: Where are end consumers going, and how will life be different two years from now, say, in mobile and social tech? Can you give a concrete example of how a startup might go after such opportunities?

RS: One unarguable trend is the end of the PC. Not that laptops and desktops will disappear, but more and more the phone will be our most “personal” computer. As an entrepreneur, think of what … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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  • http://www.scriptpad.net Adam Shepler

    Gregory, thanks for writing this article about Reed. It’s well deserved as he is a fantastic mentor, advocate and investor. It’s really been a pleasure for us at ScriptPad to work with him, and we look forward to a long partnership.

    Cheers,
    Shep
    @ScriptPad
    http://www.scriptpad.net