Old joke:
>A guy is leaving a bar late at night, and comes across a drunk looking for his keys under a lamp post.
>”Hey, buddy,” says the guy, “are you sure this is where you lost your keys?”
>”No,” says the drunk. “But it has the best light.”
Which, in short, is the startup world in a nutshell.
New York, Cambridge, and Silicon Valley are aflush with dozens and dozens of new, well-funded companies. The bubble lives again. Yet, this time, like back in the late ’90’s, nearly all of those companies are clustered in the same few industries: high tech, biotech, green tech.
Sure, those areas have a large number of historical exits. But they also have an even larger number of investors and founders, all competing in the same space.
People ask me all the time why I left high tech for the world of film. The answer is simple: it’s not well lit. Entertainment is a giant, hugely profitable industry. Yet, to be brutally frank, it’s also operating at a far lower average IQ than, and lags behind the basic business best-practices long since implemented in, most other industries.
That makes it a really interesting wild west in which to ‘innovate’, either by applying genuinely new ideas, or by simply re-applying old ideas from elsewhere that seem new here.
I’ve spent nearly the last decade building Cyan around that model. And, over time, as we’ve honed down to the core of the idea, we’ve realized that we could actually improve returns by outsourcing a lot of the operational aspects of physically making or releasing films, so long as we remained very hands on, and held our partners to the top-down strategy based on those innovative ideas.
In other words, we’ve essentially become an early-stage VC firm in the world of film.
Fortunately, that’s turned out to be a very profitable approach. Which is why we’ve also been kicking around ways that same approach might more broadly apply. Couldn’t we move from investing specifically in film, to investing simply in smart companies in stagnant industries?
We think the answer is yes. So, to that end, we’ll shortly be shifting our name from Cyan Pictures to Cyan Capital (though the Cyan Pictures brand [and team] will continue to exist, as a subsidiary, for all our film investing). And, over the next six months, we’ll hopefully have some new and interesting expansion to announce along those lines.
A few friends have already pointed out that this is really just a circuitous, ten-year loop back to essentially the same business model I (fortunately, also profitably) implemented a decade back with Silicon Ivy. To which I say: true. At least I’m consistent.
