

"Web 2.0 Is On The Ropes... Kleiner Perkins Has Halted Investments" - blackswan
http://www.siliconvalleywatcher.com/mt/archives/2007/11/web_20_is_on_th.php

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nickb
KP halted? Really? What good investments have they actually made in the last
3-4 years? KPCB completely missed out on the Web2.0 while their competitors
made billions. Look at their portfolio... it's devoid of anything that made it
big in the last few years.

As for Randy Komisar, he's a new VC who hasn't had a SINGLE exit! He's been
trashing Web 2.0 for a while now and has contributed to KPCB's decline. KP
used to be a tier-1 VC firm that "got it" and in the past two years, they've
become a tier-2 firm. I routinely tell entrepreneurs to go and practice their
pitch at KP since they will ask tough questions and not make an investment
because they won't get it in the end.

Look here how he's trashing Web 2.0 earlier this year:

[http://www.venturebeat.com/2007/01/03/with-web-20-its-
easy-t...](http://www.venturebeat.com/2007/01/03/with-web-20-its-easy-to-get-
muddled/)

And look at his portfolio:
<http://www.kpcb.com/team/index.php?Randy%20Komisar>

ALL duds.

Sour grapes, Randy?!

PS: No wonder Vinod Khosla left KPCB.. he probably got sick of slowness and
influx of people who suck at envisioning the future and investing based on a
vision.

~~~
hello_moto
I may not be into web 2.0, silicon valley or all these website stuffs but when
I checked their website: <http://www.kpcb.com/portfolio/> , I think they did
okay with Google and Amazon(doing a bit well this year) in the web arena.

After all are there any startup within 3-4 years that got bought out and the
VC won big time other than YouTube? Remember, all Facebook has is "valuation".

Maybe Randy is looking at the real world and he's thinking that none of these
web companies that he invested are going to give him a big payout (in the area
of hundred millions) so he prefers to move to a bigger industry: energy and
oil. It's understandable.

On the other hand, Vinod seems to have his own venture now. Maybe that's what
he wanted: his own.

Go to his venture website and check the Renewable Portfolio section:
<http://www.khoslaventures.com/> , I don't see any web company (even though I
knew Vinod invest in several web companies within 2-4 years since 2002/2003
ish). Khosla ventures is investing in Energy companies too.

~~~
brezina
The Khosla Ventures website leaves a lot to be desired. I nearly told Vinod
this one day before his partner told me that it was designed by Vinod's
daughter.

Truth is KV has invested in many new web companies including big guys like
Slide and RingCentral. Maybe they just don't want a ton of inbound slide decks
from web 2.0 companies making sticky note apps.

------
pg
This article is all based on an off the cuff remark by a single (often
deliberately controversial) partner at Kleiner. And it's nothing new that
people in SV despise the term "Web 2.0."

If Sequoia or Benchmark announced, as firms, that they were no longer
investing in web startups, that would be meaningful.

Randy Komisar saying that "Web 2.0" companies are a lose is different thing.

~~~
fauigerzigerk
It may not be significant what this particular VC says, probably without
giving it much thought. But there is a justified disappointment with many
things that go by the Web 2.0 token. I found it very convincing when you wrote
this:

"One of the most valuable things my father taught me is an old Yorkshire
saying: where there's muck, there's brass. Meaning that unpleasant work pays.
And more to the point here, vice versa. Work people like doesn't pay well, for
reasons of supply and demand."

How many of those Web 2.0 startups are actually tackling unpleasant, hard,
messy problems in your view?

~~~
pg
I don't think there's any correlation at all between whether a startup gets
called a "web 2.0" startup and how hard the problems are that they have to
work on.

Look at Loopt. Seems like a classic, frothy social app. And yet beneath it are
very difficult technical problems and horribly tedious negotiations with
carriers. Or Justin.TV. What could me more frivolous, right? And yet to get it
to work they had to build their own CDN for live streaming. They spent 6
months working round the clock building infrastructure (including custom
hardware) before they could even launch.

~~~
cstejerean
I agree that there are several web applications that require solving hard
messy problems. I'm not sure if I would call Loopt a Web2.0 startup, but I
agree with the point about Justin.tv

The problem however is that a good number of startups that call themselves
web2.0 companies are building facebooks apps, Yet Another Social Network, or
roll your own web app with Ruby on Rails in 15 minutes.

~~~
pg
_a good number of startups that call themselves web2.0 companies are building
[things with no substance]_

That's no different from Web 1.0. In 1998, people thought all they had to do
was create a "portal" for some special interest, and it would be a company.
Replace "portal" with "social network" and it's 2008.

------
brk
I wonder how much of this supposed non-investment in "Web 2.0" companies is
because traditional VC's like KP can't get the terms they need (or are used
to)?

In the 90's to start even a web-based company, you would spend $1MM+ just on
things like office furniture and snacks.

These days a $500,000 investment can get you a working "beta" prototype with
users (or even paying subscribers) and much more infrastructure than it ever
could in the past.

You can get your "Web 2.0" company rolling with less than a dozen people, in
temporary (or no) office space. That doesn't need "Kleiner Perkins" level
investments, so I can see why they maybe can't find any Web 2.0 deals worth
investing in.

When $500,000 gives you something that you can start to make logical
extrapolations from, you're in a better position to negotiate a lower
percentage for the investors. This is good for founders, but not for VCs.

------
Harj
This comment/article aside - how many web startups have KP invested in
recently? They've not had a major hit since Google and have spent their time
investing in a bunch of other sectors.

There's nothing new here.

------
izak30
Ok, If I'm correct, this has been hashed a hundred thousand ways. People in
the industry get excited about some new technologies, and a couple of new
ideas, (portals, social networks, semantic web...there will be more) and a few
somebodies make it big. Lots of other people say "x and y market could also
use that idea" and soon it's a paradigm with buzzwords.

Now there is a group of developers and entrepreneurs equipped with some good
ideas, some buzz words, and some drive, they all take these things to the VCs
of the world. VCs are smart people, and I'm sure that they get tired of seeing
20 different angles of the same box.

Business principles haven't changed since the 1890s. You have to either do
something new, or do it much much better than everyone else to make it big.

I think that the message that he's trying to give is "Give me something new,
and show me that you don't need to bank on the success of somebody else to do
it"

------
henning
"At the end of the day, there is a deep, long term trend towards the network
as platform, and to applications that leverage the true strength of that
platform. That's what _I_ call Web 2.0, and I know that KP is still investing
in that trend."

The network is the computer bromide #38,323.

------
ntoshev
To me Facebook and all the social networks stuff are clearly Web 2.0. Are
these guys incredibly superficial or am I an idiot?

