Investors: How to Ensure Your Investments Invest in the Right Technology

September 8, 2021: Amazon Elasticsearch Service has been renamed to Amazon OpenSearch Service. See details.

As an investor you’ve developed an exceptional ability to invest in the right startups. These companies combine proven business models with a solid technical foundation to build some of the most exciting products around the world. But how do you ensure your investments are investing in the right technology?

Making the wrong technical choices early on can bring on technical debt that can easily bring a 10x return on your growing pains. Ask any big enterprise how they decide on technology, and they’ll run you through their technical evaluation process. This process includes reviewing software capability matrices, reading case studies, talking to other customers, and running multiple proofs of concept on development workloads. Startups don’t have the resources or time to conduct such extensive evaluations. Startups need to make quick decisions about their technical stack, but as a result the risk of getting it wrong is much higher.

Let’s talk about some ways to help you and your thriving companies avoid common pitfalls that early stage companies make:

1. 1. Small teams benefit from well-adopted technologies
      There is a high cost of adopting early technologies, especially ones that have not been battle-tested in large production environments. Everyone wants to build with the latest hip language, but rarely does the new language provide enough of a benefit that it outweighs the learning curve or risk of early adoption. Never underestimate the track record of a well-established and utilized language or service. Well-adopted languages and services have more technical resources that are available online, and troubleshooting issues will be less time consuming. Also, it will be easier to hire engineers who are familiar with the technology. More time can be focused on what matters: building a better product.

1. 1. The Do-It-Yourself mentality is great, but not when it comes to critical services
      Startups all have their domain experts: The MySQL seasoned “big data” expert, the Amazon OpenSearch Service (successor to Amazon Elasticsearch Service) guru, and so on. These engineers are valuable assets for a company to have in the early days but can be costly if this expertise lures a company away from the reliability and operational advantages of managed services. It’s easy for a small company to manage a small cluster, but as usage grows so does the operational overhead. Managed services such as Amazon RDS, Amazon OpenSearch Service, Amazon Redshift, Amazon Kinesis, and Amazon Aurora mean that clusters can be managed, updated, and backed up by AWS. Remember that every company needs a database, a server, and more. Any time spent managing these common infrastructure components is time that could be better spent on developing new products and services.

1. Build mentorship programs early on
   If you have a less experienced technical lead at a company, help provide them with a mentor. Mentors fill the void where previously these engineers had the ability to bounce ideas off of a trusted colleague. Mentors can help your teams make the right technical decisions by understanding the familiar challenges their engineering team is facing. Great mentors likely already exist among other companies in your portfolio. Ask around about who is a strong leader in specific areas of focus such as infrastructure, security, front end, data, AI, marketing, etc. This exposure to a variety of challenges will also help your mentors bring new perspectives and solutions back to their own projects. In summary, having an experienced individual that companies can engage about regarding architectural decisions, data design, security, and more will help keep your early-stage company feeling confident about their decisions.

There are many more best practices and recommendations that we will cover in upcoming articles. These three pillars are a good start for helping you and your companies figure out what technology makes sense for you today. Providing these companies with access to the right resources, with the right guidance, will help set up these teams for long-term success.

Mackenzie Kosut is the Global Startup Evangelist at Amazon Web Services (AWS). Prior to AWS he worked at Betterment, Oscar, Tumblr, and more. Mackenzie travels the globe seeking out groundbreaking startups on AWS, sharing the cool things they’re doing through blog, live video, and social media.