Some of the best startup investments I’ve made — and some of the best that I’ve missed — have been “crazy” or “weird” ideas.
Take Density, one of the first startups I invested in back in 2014. Density’s mission is to make sensors that count people. Its first product was a door counter that kept track of the number of people who entered or left a building. It seemed like a strange idea at first.
When I invested in Density, the company was very early-stage. Density was getting turned down left and right by VCs. It was rejected by Y Combinator too. I invested through Jason Calacanis’ syndicate, which was on AngelList at the time (he now has his own site —TheSyndicate.com).
The idea seemed both difficult to pull off technically and not very useful. But seven years later, Density is thriving. First, it built a large business selling digital door counters. Turns out people who own office buildings and airports and other types of real estate really want to know about the traffic coming in and out of their buildings.
And now Density has a new product line that tracks movement inside buildings (anonymously), which people are finding all sorts of uses for. For now it’s largely used to make sure that people are staying properly socially distanced inside buildings. But this won’t be the only use case for this new technology.
The funny thing is that nobody had thought to build an advanced, networked door counter until Density came along. The idea seemed kind of weird. Of course, the weirdness isn’t what made the company succeed. But I find that great investments are often like this. The idea is new and a little different, which can make it hard to judge. I’ve passed on a few deals that seemed too weird (even for me) — such as Calm, the meditation app. That turned out to be a huge mistake, as it could be an amazing return.
Anyway, the moral of the story is simple — don’t write something off because it seems a little different or weird. We often try to say, “why hasn’t someone else done this yet?” But figuring out the useful things that haven’t been made yet is one of the main strengths of a good startup. And the ideas that haven’t been done yet can easily look weird at first glance. But weird isn’t the same thing as useless — and that’s a lesson every investor should take to heart.
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