

How Kleiner Perkins almost blew their biggest investment since Google - anigbrowl
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/11/23/businessinsider-how-kleiner-perkins-almost-blew-its-best-investment-since-google-2010-11.DTL

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ryanwaggoner
This is so poorly written; no wonder print journalism is dying.

"that Kleiner's ever invested in over _it's_ life."

"from a guy _who's_ firm"

"What makes Doerr's boast even more fascinating is the story about how KP's
investment in Zynga never happened." _(Then what are we reading about?)_

"According to lore" _(Is that your official source?)_

Not to mention that the article is made up of 13 paragraphs, not one of which
has more than a single sentence. Contrast that with any article from
NYTimes.com, which is likely to have short paragraphs (as news-style writing
does), but not single sentence paragraphs.

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byrneseyeview
This article was contributed by Business Insider.

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lsb
The fact that they outsource their news-gathering doesn't bode well either.

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trotsky
_KP decided to pass. Why? "Silicon valley had stopped believing in games," KP
partner Bing Gordon tells us._

I doubt that's the only reason there was to pass on Zynga. I'm sure Pincus
gives off an odd vibe even to the money jaded sand hill road crowd. At some
point, surely, a company segment can be defined by how they do business
instead of what business they do. Just look at various multilevel marketing
firms that are defined by MLM instead of their end products like beauty.

If Zynga could be just as defined by their techniques - such as offer based
revenues, don't innovate only copy, or abuse your users - as they can be
defined by being in gaming - I wonder how fair it is to say they were getting
passed over for their niche. And maybe KP would have been right despite
leaving money on the table - surely at some point % return isn't the only
metric. I'd assume that even if heroin became legal tomorrow they wouldn't be
investing in heroin pushers at elementary schools.

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neworbit
You have a more charitable view of VCs than a number of us! But cynical
commentary on ruthless VCs aside, I think "stopped believing in games" is
probably accurate. Here's why.

The gaming biz had largely stepped away from PC platforms in favor of consoles
and decreased piracy. PC based gaming had bifurcated into two major areas:
casual games (Bejeweled) and server-based games (World of Warcraft), with the
original gaming market being a rather beleaguered middle ground.

And various firms had tried to replicate success in these new areas. But as
may be obvious, once WoW beat Everquest, nobody's been able to dethrone them.
And casual games were... well, everywhere. Kongregate, MSN Games, Yahoo Games,
Real Arcade, ad nauseum. No big differentiators. Easy to knock off. And not
very lucrative without enormous scale.

So when investors heard "new game company" their usual inclination was "nope,
next". And venture capital is a business that ultimately doesn't thrive on
risk but instead on as close as they can get to the sure thing, which is why
you see so many clones of any business that seems to be doing it right...
latest trend being Groupon. VCs are looking for a reason to say no early so
they can get back to looking for other opportunities, working with their
existing portfolio companies, or the other things that occupy their time
(public speaking, golf, etc). There could be fabulous opportunities in a
business but they are often dismissed as "in the wrong space" - regardless of
the success of that firm - if that space is out of vogue.

