In Search of the Perfect Investment

America is awash in wonderful startups. I saw half a dozen yesterday. It was a wonderful day.

Five things impressed:

1. The broad range and impressive nature of the startups. Businesses, industries and opportunities I’d never thought of.

2. The continuum of financing available to power them — from initial seed money, through all the phases to IPO and then beyond. I met one company yesterday that specializes in buying and selling the stocks of hot private companies before they go IPO.

3. The enthusiasm of the venturers (the startup managements) and their awesome talent.

4. The research they’ve done to support their ventures and their faith in that research.The Internet and the lowly phone are key. Everyone wants to share their knowledge with you because they’ll need you next time.

5. The speed they can bring things to market — think outsourcing and companies like Alibaba (and LeSouk.co) which have made sourcing products so much easier.

Several trends are making it easier to start ventures:

1. The Internet. It’s for selling, for researching and for communicating. But best, you can run your business anywhere with your people located anywhere — viz. Starbucks (and others) with free Wi-Fi.

2. The Cloud. When I started businesses, we needed computers. We had to buy them. They were pricey. No more. You don’t even rent them. You just buy computing by the transaction. Thank you, Amazon, and Google and Microsoft and Dropbox and Sharefile and Box and and and.

3. The people. It’s fashionable to join a startup, even as an low, lowly-paid intern. When I graduated from business school all my classmates went to consulting or investment banking. When I attended business school, there wasn’t one course on entrepreneurship. Now the schools are brimming with them. And everyone is going into startups — even though Lloyd Blankfein of Goldman Sachs is now a billionaire. (You should see the fees they charge!)

4. The ease of programming wonderful web sites. It’s not only easier to learn programming. The web is awash with free software for the taking. The free stuff can safe you mountains of time and work. One item: The New York Times and the Wall Street Journal use the same free web site software I do — It’s called WordPress.

5. . Shared walk-in, walk-out office space is now available in places like WeWork — all over the country and the world. Think of WeWork as Amazon Web Services for office space. Start small; grow; contract, move on. Ultimate flexibility.

6. The financing. I started the day with a visit to SeedInvest. That’s one of many angel investing groups which invites startups to present and angels to invest. Here’s the view from my seat — there were about 150 people there. (Note to presenters: Make the typeface on your slides bigger and bolder. Put fewer words on each slide. Next time you present, look around the audience. Some of them have grey hair and can’t see – or hear. I speak for me.)

Here are the companies presenting. I really loved one. Can you pick it?

The BIG direction for many startups and existing technology companies is the Internet of Things. BusinessInsider is pushing a report it did. Here’s their chart:

Here are some key points from the report:

+ Connected-home device shipments will grow at a compound annual rate of 67% over the next five years, much faster than smartphone or tablet device growth, and hit 1.8 billion units shipped in 2019, according to BI Intelligence estimates. Connected-home devices include all smart appliances (washers, dryers, refrigerators, etc.), safety and security systems (internet-connected sensors, monitors, cameras, and alarm systems), and energy equipment like smart thermostats and smart lighting.

+ The connected-home category will make up about 25% of shipments within the broader Internet of Things category this year, but that share will increase gradually to roughly 27% in 2019 based on our forecast, as growth in other IoT areas picks up.

+ Connected-home device sales will drive over $61 billion in revenue this year. That number will climb at a 52% compound annual growth rate to reach $490 billion in 2019.

+ Home-energy equipment and safety and security systems, including devices like connected thermostats and smoke detectors, will become popular first, leading the way to broader consumer adoption.

Hints of note:

+ My friend’s dentist send his wife a bill for $8400. then reduced it to $7200 for a “friendship discount.” Good idea: befriend your dentist.

+ Don’t get foreign money before you leave on vacation. It’s cheaper from an ATM machine overseas. That actually applies to Greece also. My friends vacationing there are having a wonderful time, completely unaffected by the mess. The Greek ATM machines work for tourists.

+ Personal philosophy: You can never have enough pillows or towels.

Harry Newton who learned one lesson with Apple — Don’t panic. Here’s another lesson: What goes down sometimes comes back up. Here’s Apple over the last month:

The good news: I had held onto 2,000. And I recently bought another 1,000 — below what it closed at last night. Low brokerage rates of under $10 — irrespective of size of buy — do give some flexibility to undo one’s idiocies.

I bought a little MBLY, PAH, AMBA, GPRO  and HACK. I’m up $26.10 on AET (Aetna), which more than pays for the brokerage.

The Tour de France continues this weekend. I love bicycling. But I hate hills. These guys eat them up. The scenery is wonderful. Watch it on NBC Sports, which is channel 220 on DirecTV.