I’ve been spending a pretty good amount of time (in between secret start up work) thinking about my personal investment thesis (v1 mentioned in a previous post) and have had some discussions regarding trends and things to watch out for.  Eventually web 2.0 will transform into the next big trend with shiny buttons and stickers but I really think that we’re getting some quality advancement out of this “phase” of the web generation.  Some might say that social networking and Twitter etc. are not “advancements” per se, and they may be right.  But when you really think about it, the infrastructure that has been put in place and the data that is being added to the web on a daily basis is truly astounding.  With this type of background, and the enormous development into web as a platform, I think we’ll see some really great things in the next iteration of web technologies.

With that in mind, I’ve left the first part of my thesis the same as I’m genuinely interested in the cool and happening technologies that the tech kids really love.  At the same time however, I’ve added a section about enterprise IT and some options that might exist in that space.  Despite the obvious downsides (slow, political, bureaucratic etc.) most major organizations will have to take advantage of the web technology that is out there simply to compete on the basis of price or differentiation.  The possibilities for catalytic change seem to be pretty enormous and major success in the enterprise arena has already been proven, despite the lack of glamour or popularity.  **I’ll post a working versions of this soon, I’m just tweaking it and working with it for now**

Finally, I just wanted to post some interesting thoughts about the entire thesis idea and drawing talent.  A recent post on the Foundry Group site goes into great detail about the merits of location based investing.  The following two paragraphs seemed to highlight some pretty important factors regarding where you make your investments, especially given my current location.

Our geography-agnostic approach also signals one of our core beliefs: We believe it’s a common venture capital fallacy that an investor must be constantly present physically to “manage” a portfolio company. Foundry Group isn’t in the business of investing in entrepreneurs who need to be micromanaged or who need us camping out in their offices to make stuff happen. And we suspect that really great entrepreneurs don’t want their investors stopping by in person for daily updates any more than we do (all you entrepreneurs, tell us if we’re off base here…). Between well-timed, in-person board meetings and all the great technology we have at our fingertips, geography really isn’t a barrier to effective communication and collaboration between a company and its investors, and we think our experience bears this out.

Nonetheless, we’ll admit that there are advantages to investing “locally.” Whether it’s helping our portfolio companies recruit new hires or minimizing the brain damage of hiring lawyers, accountants or other service providers, we like to leverage our local knowledge as much as the next guy. More importantly, local knowledge can pay off in vetting the entrepreneurs we invest in. Simply put, no amount of due diligence can substitute for really knowing an entrepreneur over an extended period of time. Having an entrepreneur in our backyard improves the likelihood of that kind of knowledge. So, as previously discussed, there are times when we’ll invest outside of our themes; often we’ll do so because of our “local” knowledge of a terrific entrepreneur.

With that I’ll end this rather lengthy post but clearly there are major arguments for both sides on the importance of location.  For tech investments, it seems quite likely that I’ll end up on the west coast at some point simply for the fact that involvement in the community would be immensely beneficial for deal flow and development.

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