As I read through the coverage of Techcrunch 50 and DemoFall, it has got me thinking about how I evaluate consumer facing investment opportunities.

On one hand, I’m in a bit of a tricky position because it’s so easy to lose touch with reality.  I live in a weird bubble where most people I talk to read tech blogs every day, beta test dozens of new web services each week, and have a blurry distinction between their public and private lives.  It’s easy to get caught up in the “coolness” or “newness” factor, and forget that a new web service may not really solve a meaningful pain point in the lives of average consumers.  It may be possible to find a niche audience for many of these web services, but it’s very hard to see the potential for mass consumer appeal.

On the other hand, it is rarely obvious how consumers will interact with new consumer web services.  Often, the early adopters shape how the company evolves and helps entrepreneurs unlock the full potential of their business. The broad value proposition of Facebook, YouTube, and others is probably very different compared to the reasons why early adopters first tried these services.

I think it’s pretty challenging to be able to connect the dots between what appeals to niche audiences early on and how that is a signal of broader consumer appeal down the road. Consumer sentiment is pretty fickle, and the markets we play in move very quickly.  It takes a combination of being able to “keep it real” while also being able to “see the future” at the same time.  At this point in my career, I think that I’m developing a decent sense of judgment in this area.  But I clearly have a long way to go, and I’m really very lucky to have a great vantage point at Spark to be able to test my judgement and refine my thinking in the years ahead.