Putting together an Investment Thesis

A typical question asked in a VC interview is about one's investment thesis. A basic methodology to follow when putting together an investment thesis is:
( Note that this is an exhaustive way of doing this, one does not necessarily need to go through all these hoops to have an opinion on a sector)
There are four basic steps:
A. Create an Ecosystem Map
B. Use the ecosystem to come up with an exhaustive taxonomical analysis
C. Identify opportunities
D. Identify startups targeting those opportunities

1. Create an Ecosystem Map - Research and create a map for the technology ecosystem enabled around the sector of choice. This is facilitated through three methods:
1. An analysis of current investment trends
2. Market research of the evolution of the sector
3. Discussions with industry leaders and Venture Capitalists investing in this field

2. Create a taxonomical analysis - Use the ecosystem to come up with an exhaustive taxonomy of the sector. For instance, when looking at the mobile services sector, one can go through the following analysis:
• Business: Going beyond VoIP phones to unified messaging, web conferencing, enterprise IM, access to enterprise data from any device.
• Lifestyle: Media convergence (e.g. IP TV), mobile blogging, mobile audio/video, gaming and mobile payments

or slice it another way:
For ex: Mobile Services Taxonomy - eCommerce, Security, Content Management, Enterprise Content, Device Management, Location Based services, Operations Management.

3. Opportunity Identification - Based on the aforementioned analysis, one should be able to answer the following questions. What is the ecosystem (infrastructure to applications) created by this taxonomy? What new applications does it enable? Who are the incumbents & entrants?

4. Key Startups in the area - Finally, round off the analysis with a survey of key startups in this area. Identify those which recently got funding and those in the market that are still looking. Nothing gets a VC's attention more than a potential deal.

In General, the following frameworks will be useful here:
(My classmate, Prasanna Krishnan came up with this list for a joint project)

a) Scenario planning - If it is a disruptive technology, then past trends are not good indicators of the future. In addition, there is a high degree of uncertainty around the apps & players that are likely to succeed. Hence scenario planning is a particularly useful tool.

b) Technology Speciation - In addition, the key to disruptive technologies in any sector is having killer applications and many of these applications are likely to be in unexpected new domains. Technology Speciation is a useful tool to study this phenomenon.

c) Technology strategy in lumpy market landscapes - Useful in identifying latent market needs & hence determining what applications are likely to succeed in an undefined market.

All in all, this is a good template to write up an investment thesis paper. Or just cruise through it to create an on-the-run investment idea for your next interview.
Talking about interviews, anyone know of any good Silicon Valley VC opportunities?