A Startup with the Risk Profile of an Incubator? (A WhenHub Post)

    Note: If you’re a business model nerd like me, this post is likely to interest you despite the fact that it also involves a transparent promotion for my startup. However, if the normal mechanisms of capitalism feel icky to you, I understand. Feel free to skip this one. But I promise it is interesting.

    The big problem with startups is that most of them fail. Still, lots of people are willing to take that risk because the upside potential is so high. Also, failing makes your odds of succeeding with the next startup much higher. It turns out that failure is an excellent teacher. But any way you look at it, startups are risky business.

    Startup incubators reduce their risk by pooling a bunch of startups together and hoping that at least one is a big winner that pays for all the losers. This is similar to the concept of investing in an index fund instead of picking individual stocks. Diversification is a great way to spread risk, but the tradeoff is that the upside potential is watered down by the losers in the pack.

    In a perfect world you would have the upside potential of a startup with the risk profile of an incubator. The closest anyone gets to that perfect world is an initial product and a few pivots before running out of cash. A three-pivot startup is like a mini-incubator in itself. It takes three separate swings at the ball and hopes at least one of them connects. But three swings is not many when you consider how often startups fail. Is there a business model that does better?

    I hope so, because my startup WhenHub is designed from the ground up to be similar to the risk profile of an incubator but in the form of a single startup. We accomplish that by creating useful products that have universal appeal across thousands of different applications. If the public gets excited about any one of those thousands of applications, we probably have a way to monetize. 

    Our startup’s domain is time, including any kind of schedule, historical timeline, curriculum, itinerary, you name it. We take those “stories” of time and turn them into interactive visualizations you can share. That means literally every human over the age of 12 has dozens of potential uses for what we do. It’s good for families, businesses, schools, and any other kind of organization. 

    We like to compare WhenHub to office applications such as Word, Excel, PowerPoint and the Google equivalents. If you ask me who the target market is for any of those applications, I would say the question makes no sense. People of all types use those products for thousands of distinct reasons. WhenHub is like that, by design. 

    Obviously we can’t completely match the risk profile of an incubator because we have one team of people, and ideally you want to diversify both the people and the products to get the best risk control. But our team has happily worked together for a long time, no drama, and that’s all good news. I don’t see that changing unless the people change. And we all seem happy at the moment. (Thrilled, actually. This phase is the most fun.)

    WhenHub is both a Studio product that you access with your web browser plus an app that does real-time travel visualizations. Both parts of WhenHub are designed to have thousands of potential uses. 

    Before designing WhenHub we met in person with some of the smartest investors in the startup world. One well-known billionaire told us he only likes startups that have the so-called network effect, and so we designed to that. WhenHub gets more valuable as more people use it, and it is hard to leave once you are in it. (Like Facebook, for example.)

    One of the most successful angel investors in the country told us he likes startups that can grow without advertising, so we designed to that standard too. Our “time stories” piggyback on any headline that is already viral and we add visual appeal to make sharing attractive. For example, at the end of this post is a Whencast of the NFL Playoff season. (Sports schedules are a tiny part of what we do.)

    Another famous investor told me he doesn’t like to invest in anything that a teen wouldn’t use. The WhenHub app is perfect for teens heading to casual meet-ups. And the we expect schools to be big adopters of the WhenHub scheduling features. So teens will be all over it, we hope, once we get their attention. And their parents and teachers will do that for us. The Network Effect will drag them in.

    We’ll be looking for several million in funding in the next month or so. If you are a qualified investor and you want a sneak-peak at the pitch deck, you can contact me at Investor@WhenHub.com. We like advice too. 

    Business reporters are welcome to use the same email if you want to hear more about our business model.

    Here’s an example of how WhenHub piggybacks on current events that the public already cares about. This example is the NFL playoff schedule, but it could be any current event. You can add the schedule to your own calendar, or share with others via email, or on social media, and we will keep it updated throughout the playoffs. You can even embed it in your blog with a copy-paste to HTML, like I did below.

    This map-style visualization is one of many options. click the icon in the lower right corner to see full screen. 


How About an American Expense-lowering Investment Fund?

    I’ve been saying in this blog for some time that we can’t tax and budget our way to a better future. We need to work on dramatically lowering the average cost of a high-quality lifestyle. Technology can make that happen if the right startups are nurtured.

    Take for example this project that figured out how to make entire  homes for $20K, using space-age methods. The big problem is that local building codes prevent new technologies from being implemented. I know that to be true because I had to forego some green design ideas for my current home for exactly that reason. The same government that insists I build with green methods prevents me from doing it in a number of cases. It’s a huge obstacle to progress.

    But let’s say America decides to create an investment fund for startups such as this $20K home project, for the explicit purpose of lowering the future cost of living for low-income Americans. The fund would invest in only those companies that can make your ordinary life less expensive. But on top of investing, the government could work with the fund to remove burdensome regulations for their startups. Americans could be living in $20K homes by summer if Congress made it a priority. All Congress needs to do is make exceptions for certain companies and keep the initial trials small. If problems pop up, adjust as needed.

    The investment fund could operate at a profit that gets put back into new investments, making it self-funding after a few years. And because the government can put a spotlight on companies, and it can remove red tape in some cases, the investment fund would create its own success. Its portfolio would have a huge natural advantage.

    Imagine a small city built with these inexpensive homes. Imagine that since the city is designed from scratch, you optimize it for self-driving cars only. No stop lights or stop signs needed because all the cars would be in contact with each other. That takes about 80% off the cost of automobile ownership. You don’t even need car insurance in that world.

    If I have a $20K home, inexpensive transportation, free WiFi, a smartphone, a laptop, reasonable healthcare, and good neighbors, I’ve got a good lifestyle. I think you could reduce the cost of living to the point where an annual income of $30K seems perfectly adequate. If you want to help veterans, the poor, and the elderly, this seems like a good way to go.

    In the healthcare field we also see startups and technologies with potential to lower costs for consumers. Government red tape is slowing them down too. Consider this new technology that can detect cancer, Parkinsons Disease, and Crohn’s Disease from your breath. That could be a game-changer for costs because of early and inexpensive detection. I’ve seen several game-changing technologies just out of the UC Berkeley startup ecosystem alone.

    I’ve blogged recently about the impact of optimism on economies. I could be wrong, but this sort of out-of-box approach seems more likely to happen under a Trump administration than any government that came before, in this country or any other. But we will see.

    Have I mentioned that I wrote a book that you might want to buy because it is available? I’m working on a new one for October.

    Have you seen my startup, WhenHub.com? If you create any interesting visualizations with the studio feature, let me know and I’ll publish it here on this blog. The visualizations are designed for easy sharing so your interactive visualization (easy to create) might go viral if you pick the right topic. You can even include a little commercial for your company in it, with links to your website. Have fun!