Courtney Myers Blog | Five Questions to Ask Yourself Before Investing in a New Technology | Talkmarkets

Five Questions to Ask Yourself Before Investing in a New Technology

Date: Saturday, August 18, 2018 3:14 PM EDT

Thanks in no small part to the proliferation of digitization into almost every facet of our lives, there is no shortage of technology startups sweeping the nation. As such, it seems that on an almost-daily basis, there is another new innovation released to market, promising to make our lives easier, better, quicker and more efficient. To the savvy investor, these technologies sound like a dream come true. They’re up-and-coming, not too well-known yet, and are likely to grow by leaps and bounds in the next few years. If you can get in on the cusp of the action, you could stand to make a significant profit if the technology really does take off.

Yet, before you become an early adopter and invest in these new companies, here are five questions you should ask. Taking the time to conduct this simple research can mean the difference between investing in a promising solution that actually delivers and one that still needs some development before it can make good on its promises.

1. Is it future-focused?

One of the most important aspects of a new technology is whether or not it is scalable, meaning whether it can be adapted and transformed as required to keep pace with the changing speed of society. Take CD-ROM software, for instance. When it first debuted, it was undoubtedly a hot commodity. Now that music has primarily shifted to the virtual realm, it is rendered almost obsolete. For a modern technology to avoid this fate, it must not be so concrete and change-averse that it risks being replaced by a more tech-savvy model a few years down the road

Before investing, make sure that the technology is forward and future-focused and will be relevant years down the road. The lowest-priced option might be attractive now, but if it is too dependent on current conditions, it might not be a smart investment in the long run.

2. Is there infrastructure to support it?

More often than not, a technology needs a little bit of time to reach full and total development. The same goes for the startup or company that created it. Before jumping on the bandwagon and pursuing the hottest tech stock just because there is a high degree of buzz around it, make sure the brand behind it has the infrastructure and operations in place to support it. That doesn’t mean it can support it only in the short-term. If this tool becomes a massive success and is being ordered at exorbitant quantities, are there processes in place to support this demand?

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