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As a venture capitalist, my job is to visualize the world three to five years into the future. Typically, companies take 12 to 24 months to complete their products, then spend another 12 to 18 months evangelizing and selling those products. Therefore, when I analyze an investment in an early-stage technology company, I need to imagine the future environment in which it will compete, not the environment that exists today.
For example, when I made my first investments in Alantec Corp. and Crescendo Communications, Inc. in 1991, the internetworking world believed in only hubs and routers. I believed that the LAN switching that Alantec and Crescendo were developing would be important.
Today, LAN switching accounts for over $1 billion in revenue for Cisco Systems, Inc., whose acquisition of Crescendo provided the foundation for Cisco's LAN switching business unit. Fore Systems, Inc., which recently acquired Alantec for $800 million, can expect to reap an estimated $60 million in revenue this year from Alantec's LAN switching technology.
Another hot technology today is Gigabit...