social e-commerce technology. (He didn’t reveal any further details about the company, like its name.) The team wanted to kick off with what it’s familiar with, but definitely plans to expand its reach for successive creations. “We don’t want to be typecast by the first company,” Chung says. “We want to create more of a breadth. One shouldn’t expect just a stream of companies like our first one.”
One commonality you can expect to see among all of them is focusing on making money from the beginning, rather than building up a user base and figuring out revenue models later, Chung says. “You can typically divide startups into two classes, ones that are more pie in the sky—that don’t burden themselves with the need to have customers, revenue from the beginning. Then there are the ones that choose to burden themselves [with all that]. We’re unlikely to build the next Facebook—well, you never know. We like to think that our companies have a little more going for them from the get-go and will scale more quickly and have distribution with the technology from the beginning.”
—-Redstar is putting together some serious infrastructure so entrepreneurs can focus strictly on developing ideas and technology. The firm offers finance and accounting services, as well as designers. “I’ve seen a lot of startups struggle with that piece at the beginning. They pay serious dollar they don’t have for top design,” Chung says. “Our design director was our first hire, to help all of the operating companies think through the prototyping. We see that as a big distinction.”
Since Chung touts his maturity and was at the frontlines during the first tech bubble, I couldn’t help but ask: Are we seeing another tech bubble? His answer is yes and no.
“If you’re talking about a valuation bubble, yeah, it’s pretty obvious. Valuations in certain areas have just gotten kind of screwy—which doesn’t mean that even highly valued companies may not end up justifying those values. It just seems likely that we’ll see some sort of significant valuation correction.”
“But a lot of times people look at the bubble only from a paper valuation perspective,” he adds. “Are we creating new technologies that will massively change people’s lives, change the way people work, and significantly shift productivity? The answer is absolutely yes, and the pace of that has only been accelerated by the economy.”
“I don’t think there’s a tech bubble when you look at the actual technology itself,” Chung concludes. “If you’re looking purely at, ‘Is it worth investing in new technology?’, I think the answer is absolutely yes.”
