VC Guru on Coming of the 'Next Big Thing'

What will be the follow-up to the Internet boom? What will have people ready to forget the bursting of the Internet bubble? A venture capital guru talks about that, what he learned from the dot-com bust and if people will ever really invest in the kid with the cool idea again.
What will be the next big thing?

What will be the follow-up to the Internet boom? What will have people ready to forget the bursting of the dot-com bubble and the kamikaze-like fall of their stock portfolios? Or will another technology really erase all those bad memories?

There will be something to wipe away those memories -- or at least most of them, according to Guy Kawasaki, CEO and a founder of Garage Technology Ventures, a venture capital investment bank for emerging technology companies. The next 'big thing' is on its way. It's probably being cooked up in some college lab or dorm room right now. Kawasaki, who is a former Apple Fellow at Apple Computer, Inc. and an initial evangelist for the Macintosh, says of course there is another life-changing technology on its way. That's just the way of the world.

And as for the cynical nay-sayers who lost their shirt -- and probably their Palo Alto house and BMW -- in the dot-com melt down, Kawasaki says by the time the next big thing comes around, they'll be over it. And they'll be ready to invest again. Maybe they'll just be a little wiser this time.

In this one-on-one interview with Datamation, Kawasaki talks about what might be coming down the road, if investors will still back some kid with a cool idea, and what he learned from the dot-com bust.

Q: So, Guy, tell me... what will be the next big thing?
Almost by definition that is in the hearts and minds of young people in educational institutions. The job of the early stage investors is to find those people, and not necessarily to know what that thing is. People have hazard at guesses -- a real explosion in biotech or wireless, but the wireless journey has already begun. That may already be here so I don't know if you can call it the next big thing. Those are the ones mentioned most often -- wireless and biotech.

Q: Come on... what do you think it will be?
I think I just need to find those people in the universities. If you could get most people to admit it, they would say when they were in the presence of what became the next big thing, they at first didn't realize it. They could say, 'I knew it was the personal computer.' or 'I knew it was the Internet.' You can look back and say that, but the trick is to see it coming. Not many people can say they saw any of it coming.

Q: Do you think it's coming soon?
It's not really predictable. It's not that precise. I can tell you right after though.

Q: After so many people lost their shirts a few years ago, do you think people will be hesitant to invest in yet another college kid with a cool idea?
To a very large degree, that will be true. We've gone from a period of irrational exuberance to irrational depression. You need a proven idea, a proven team and a proven pipeline... That's what you have to look for.

Q: But what will that kid need to do to get venture capital at this point?
The stock answer is to put together a team and put together a prototype and get some buyers. That's like saying if you want to become a professional basketball player, you need to practice a lot and get a decent jump shot. Well, duh. They should pick a product or service that they love, as opposed to reading somewhere that this is the hot sector. Just get going with the product. Don't worry about the money. Get the product going. People want to see a product. The 'back of the envelope thing' isn't flying these days.

Q: Do we need the 'next big thing' to get us out of this economic slump?
In a social psychology sense, the answer is yes. People need heroes and saviors. On a purely rational basis, it wasn't rational to get as exuberant as we did and to get as depressed as we did. Things are not as good or as bad as they seem. I think it's picking up already without it. People need to buy stuff and sell stuff. Can you imagine a world without and e-commerce anymore?

Q: Will we ever see another dot-com-like craze again?
I hope so. I need just one more in my life. Now I know what to do.

Q: So what would you do?
I'd cash out. If anybody tells you differently, they're lying. Everybody would cash out. Seriously... People aren't, jaded. They just won't believe again that it will go on forever, like they did last time. I think it's going to take more and there will be a dampening effect, but I think it's going to happen.

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