Technology and Never: A Risky Proposition
December 1, 2016
I love the capitalist tool. Forbes does the content marketing thing with a soupçon of MBA craziness and the legacy of a once proud business publication. The write up which caught my attention is “Never Acquire Technology You Understand.” The premise strikes me as ill advised.
The premise of the article is that a person with money to invest should seek far out, unproven, unknown, and high risk technologies. I highlighted this statement:
due to a lack of market and technology insight, these decisions turn into a white elephant–the corporate equivalent of the Bridge to Nowhere.
Got that? Here’s a picture to help you out.
Note the role of “waiters”. Apparently below “developers” are folks who serve others and survive on tips and the hope a big break will come with the order. “Waiters” are really the patient ones at the bottom of the pile.
The write up dips into the notion of a “robo advisor.” There’s social media too. The bulk of the write up describes the three types of individuals involved in doing big things via financial technology or betting money on technology horses.
What strikes me is the conclusion of the write up:
Unless you truly and deeply understand the needs of your audience, it’s best to be patient and then apply a rational litmus test to determine the personality you will present to the marketplace. If you are not a rational Waiter, you may end up in the Valley of Technology as a loss-leading Acquirer and Developer.
Wow.
The title says, “Buy stuff you don’t understand.” The conclusion says, “Sit tight.”
Forbes’ editors must have a deeper understanding of logic than I do. I thought that the approach of the smart money folks I used to work with followed some slightly different ideas; for example, diversification, allocation of a specific percentage to higher risk investments, and understand what you are dumping money into.
Errors in search and content processing companies are one example. Think of the dozens of investment firms which do not and did not understand the revenue potential of an information access company. In search, for example, a handful of companies have survived and most of the big name firms gen3rated a payoff when the company was sold to another firm. As standalone businesses, most search and content processing companies have not been home runs. The handful of high fliers has captured headlines due to financial improprieties or allegations of fancy dancing.
MBAs like to make money via flips or deals. Understanding a business is often not a prerequisite. Hey, it’s other people’s money. For those with some money, prudence makes sense. If something cannot be understood, the risks might be high. Do MBAs like wiring, side deals, and crazy double talk to get paid to be wizards?
Do dangerous technologies have a downside? Why not invest in fuel pool cleanups and let me know how that works out for you? You can even lend a hand. Oh, wear protective clothing. Some things which people don’t understand can have non financial consequences.
Stephen E Arnold, December 1, 2016
Comments
-
- Subscribe to Beyond Search
Feature archive
News archive
-
