What are the downsides (dsadvantages) of investing in new technology, is a good business strategy?

[TiffanyJChen]

Picture this scenario: As a future stategy for an airline company, they decide to invest in technology, say the installation of Tv units (or anything thing u can think about) in the back of every seats, or a joint venture with a more famous airline say Singapore airlines, where bothairlines could work with each other and develop new technologies, new machinery, better service? Would those new strategy make sense in the external competitive environment? (i.e. what customers require, what competitors are doing, trends in the business environment)

[Nessa]

I think so because I have spoken with many people who only fly on JetBlue airplanes for the exact reasons that you speak of; multimedia systems that keep them entertained over the course of long, boring flights. Sure, it costs an airline money to do this but when you consider the fact that some passengers will fly with your airline exclusively for the reason that you offer such systems, then it becomes a good investment. You really wouldn't be developing this technology with an airline, such as Singapore, because there are many different components manufacturers and suppliers that can already provide your airline with such technology. In other words, there are other companies that you can buy this stuff from, off the shelf, for each of your passenger seats. None of that is new technology, and these are standard options from both Boeing, Airbus, various aircraft interior refurbishers, corporate aircraft manufacturers, etc.

[Akshay_M]

Cif
Nif y cif
Cif 

The main disadvantages of investing in startups that are not public companies:

You will be taking up a high amount of risk, especially with early-stage startups. There is a high chance that an early-stage startup might fail. There is a good chance that a later-stage startup might fail. There is a good chance that a well-performing later-stage startup might not be able to get the desired exit, resulting in a mediocre return on investment for an investor.
You will not enjoy liquidity for your investment. You will not be able to sell your shares until the startup gets an exit. Some startups allow the secondary sale of shares of early shareholders, but those are few and happen when specific stars are aligned.
In some jurisdictions, you need to be an accredited investor to invest in startups. This restriction can be overcome if the startup that you are interested in to invest opts for the crowdsourcing model for one of its funding rounds.
It is suggested that you invest in startups only with your ‘play money’. It is a ‘discretionary fund’ of a size that they are comfortable. The amount in this discretionary fund can go towards investing in risky opportunities in which they believe and understand. Not all people can afford to have play money, and even if you can set aside some play money, it might be less than the minimum amount required to invest in a startup.
Your investment portfolio can become less diversified.
Unless you are a limited partner of a venture capital firm or a large family office, you may not get access to invest in later-stage startups. If you intend to invest directly in a startup, you usually can do it only during one of the seed funding rounds before the Series A funding round of that startup.
It is challenging to be aware of the opportunities to invest in specific startups. Getting access to the startup fundraising deal flow is not easy. Those who enjoy the advantage of quality deal flow will get the opportunity to invest in the most desirable startups.
You need to devote considerable time to research before investing in a specific startup.
Unless you are a limited partner of a venture capital firm or a large family office, you may not get access to invest in later-stage startups. If you intend to invest directly in a startup, you usually can do it only during one of the seed funding rounds before the Series A funding round of that startup.
It is challenging to be aware of the opportunities to invest in specific startups. Getting access to the startup fundraising deal flow is not easy. Those who enjoy the advantage of quality deal flow will get the opportunity to invest in the most desirable startups.
You need to devote considerable time to research before investing in a specific startup.

Regards,
Akshay
Technical Consultant
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