
Why I Invest in Online-to-Offline Businesses - zt
http://blog.zactownsend.com/why-i-invest-in-onlinetooffline-businesses
======
7Figures2Commas
> In a comment on HN, PG noted that the massive fortunes of the future will be
> made by "startups in industries that didn’t previously have them."

This requires a myopic definition of the word "startup." I have yet to
encounter _any_ industry in which there are no new businesses being formed.
Are these new businesses all started by Silicon Valley types, and do they look
like Silicon Valley startups? Of course not, but that doesn't make them any
less a "startup."

> Many if not most industries can be improved with an injection of technology
> and the introduction of the startup ethos (disruption, growth, efficiency,
> data, etc.).

This statement seems to imply that most industries are behind the curve
technologically, and that the players in these industries aren't focused on
growth, efficiency and the use of data.

From agriculture to shipping to insurance, it's hard to find major industries
that are _not_ using data and cutting-edge technology to create efficiencies
and drive growth. In many if not most cases, you will find that they have been
solving incredibly complex problems and building sophisticated solutions for
longer than many Silicon Valley "startup" employees have been alive.

> Most of the economy is still untouched by the methods used by Silicon
> Valley’s engineering-first companies.

What "methods" are these? And what exactly is an "engineering-first" company?
Is a company primarily differentiated by having a prettier website, which
ironically seems to make up a good number of the startups the author points
to, an "engineering-first" company? If so, why? And why does this matter?

I wonder how the author would describe companies like Exxon, Maersk and GE...

~~~
lifeisstillgood
The assumption from the author and pg, and many others, myself included, is
that software excellence is something in the DNA of SV startup culture, _and_
is going to deliver outsized, orders of magnitude advantages over companies
that do not have software in their DNA.

my favourite analogy is at some point after Gutenberg and 1451, there were
companies who had hired almost entirely these new literate citizens, and
companies who had hired maybe a few to work in the "ink department".

Those with literacy in their DNA had outsized advantages. It often came up
against Royal monopolies and state interests, which may be one reason the
Industrial revolution took a while to arrive.

However it is worth noting that the first wave of electrification of factories
in the late 1890s did not see productivity rise much till the 20's - a
generation had to retire before factories were reorganised away from steam
engine layouts. A similar effect seems to be happening here - the first
generation of managers with computers in workplace is retiring, leaving behind
the tired Microsoft metaphors for Desktops and filing cabinets. And it is
being replaced with ... well we don't know yet, but I have not had a copy of
word or PowerPoint or excel for years. And I have not had OpenOffice either,
and only use google docs for CVs.

Software will deliver outsized advantages for companies with it in their DNA
for at least a generation.

~~~
7Figures2Commas
How many startups do you really believe are more technically sophisticated
than, say, Chevron, Hapag-Lloyd, Cargill, ADP or Goldman Sachs?

It's easy for a couple of 20-somethings sipping lattes at The Creamery to
imagine that industries like agriculture and trucking are filled with bumpkins
who don't "have software in their DNA", but that doesn't mean this is reality.

If you remove yourself from the Bay Area bubble, it's quite difficult to find
industries that are not already using data and technology in very
sophisticated ways.

> ...software excellence is something in the DNA of SV startup culture...

What is "software excellence"?

Look at the page source for the websites of the companies the author has
invested in: most of them exhibit more than one easily-avoided front-end worst
practice.

Obviously, this doesn't mean that these services are of no value, but it's
kind of silly to throw around phrases like "software excellence" and
"engineering-first" when the type of companies that are supposed to be
exhibiting these things apparently can't find the time to push clean,
efficient front-end code to production.

~~~
atwebb
I like the specific mention of Agri-business. I'll admit to being pretty blind
to it until a close friend went to one that is doing amazing things and
producing very sophisticated devices. They're currently switching out the old
for the new similar to what you were replying to. They have the "startup"
mindset but it seems they are already entrenched with money to burn, looks
like a good position to be in.

And I drove by the place all the time, never realizing it was on the cutting
edge of one of the world's biggest business sectors.

~~~
rmason
I've done three agriculture software startups. I do not believe that the
average city dweller has any idea. At the last InfoAg conference there was a
number of UAV (drone) vendors for the first time.

This nationally known futurist gushes about how technical ag has become:
[http://www.precisionag.com/video/c:0/1688/](http://www.precisionag.com/video/c:0/1688/)

If you're expecting to find Mr. Haney from Green Acres fame you're in for a
rude shock.

------
toadi
Maybe it's not which one is beter over another. Who is beter at sales,
marketing and networking. Sometimes soft skills are as or more important then
your technical superiority?

~~~
Mikeb85
Not to mention the finance chops required to make money, manage physical
inventory (which most 'startups' don't really have to worry about), buy/hedge
commodities and currencies, etc...

Most of the SV 'startups' I read about are just glorified websites, maybe with
a mobile app as well. There are plenty of real, physical problems which can't
simply be solved with a website. That's not to say there isn't opportunity for
disruption and improvement, but your typical 'startup' is simply in the wrong
domain.

------
the_watcher
I've been thinking about online-to-offline a bit recently while watching the
rise of Grouper amongst my peers (as well as Tinder to a lesser extent). Seems
like there may be some places where the offline-to-online focus of disruption
could itself be disrupted by encouraging more offline interaction. Anyway,
interesting to think about in the age of software eating the world.

------
sard420
From what I gather, he invests in: companyA is going to buzzwordAdjective the
stalwartIndusty

