March 19, 2015
Silicon Valley pundits are constantly debating on whether we are “in a tech bubble.” Because the dot-com crash of 2000 left so many overvalued, overspending startups flat on their face, it’s fun to pontificate on whether so many billion dollar valuations today are headed in the same direction. Marc Cuban says “it’s worse today.” Marc Andreessen has proclaimed for several years that there is no tech bubble, however, he warns that the outrageous valuations should cease. And most recently, Bill Gurley declared in a talk at SXSW that today’s “complete absence of fear” is worrisome and gave a prediction of “dead unicorns.”
But David Tisch of BoxGroup sat down with us during SXSW to chat about investments and startups, and he explained that tech should no longer be referred to as a vertical. “I don’t think we’re in a tech bubble,” he says. “To make tech this vertical, I think, is a huge mistake. Tech is this horizontal thing that is hitting finance, it’s hitting healthcare, it’s hitting retail, it’s hitting education… Every single aspect of this world is being penetrated by tech. There is nothing that is going to slow this down.”
So, how do the investors at BoxGroup make a decision on which startups to fund? As an early-stage investor, Tisch says that the entire business of investing in tech startups is an art, and not a science. “We look at that special sauce,” he says, “of why is this team the best team to work on this product? If all that comes together, that entire story, we make an investment. If there are holes that we find, we will ask a lot of questions around those holes and get confident that the team can either solve those holes, or not. If they can, and they convince us with that story that they’re able to solve that gap, we’ll invest.”
And what of these overvalued startups – especially when they shut down? “I think you have to understand that not everything is going to succeed,” Tisch advises. “The key, to me, is to be true and consistent and patient.”
Along with startup investments, Tisch has several other exciting endeavors that he’s working on. He has launched Spring, a one-stop shop for mobile shopping. “For consumers, it’s every one of your brands in a beautiful app. For brands, they get a direct-to-consumer channel that they control.” And he’s very passionate about helping to build the New York startup ecosystem. He recently joined Cornell Tech to offer a graduate program that will be a fundamental piece of where the New York ecosystem is going and build top-tier resources for engineering and tech. Part of this resource is Startup Studio, where the students in the program will be required to create a business.
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