Cloud Computing and VC Risk Management
Geekwire just published an interesting article on how cloud computing affected and transformed the venture capital world of investing. With cheaper and faster to deploy servers, VCs can now “spread” their risk by investing in multiple startups that can spin up a minimal viable product in a much shorter time frame than before.
How fast are we talking about? Come to an AT&T Mobile App Hackathon and you can find out for yourself. Yes, this is a shameless plug for my hackathon 🙂 The next event is in Seattle: http://mobileappsea2.eventbrite.com
Here is a quick excerpt from the article that I found interesting:
“Speaking at an event in Australia Tuesday, Amazon.com CTO Werner Vogels noted that venture capitalists initially “hated” AWS because it “robbed them of the opportunity to get to significant chunks of young businesses,” according to a report in ComputerWorld. In other words, the infrastructure services from AWS made it so cheap for startups that venture capital wasn’t needed in the early-stages of many young companies.
But Vogels said things have changed, and VCs now embrace AWS since it allows them to place more bets and essentially “spread their risk much more.”