

The Silicon Valley VC Disease - parker
http://scobleizer.com/2008/07/26/the-silicon-valley-vc-disease/

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ojbyrne
Scoble writes like Steve Gillmor with smaller words. I'm not sure what the
point of this article is. The whole point of Venture Capital is to invest in
small companies and grow them to a point where they can raise more money
through other means - typically IPOs or acquisition. That they're failing
badly is more about the US economy than some "VC disease."

So I guess what he wants is for investors to invest bucket loads of money for
decades on promises and hot air. Or he wants someone to subsidize iphone
usage...

My favorite part, though, is when he starts touting long dead products
(Visicalc, Pagemaker) as examples of the kind of success that comes from a
long term perspective.

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mattmaroon
What the hell is he talking about? VCs routinely fund companies that don't
have a business model or any near-term path to making "buckets of money".
Twitter being a great example.

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fourlittlebees
He was specifically calling out Dave Hornik for his bit about not investing in
iPhone apps because it's too small a market. There's too much VC investment in
junk they think will be the next big thing rather than things that might be
smaller hits, but actual hits. It's the difference between a $1 scratch-off
paying $5 vs. buying $30 of Powerball tix in hopes you hit the jackpot.

~~~
mattmaroon
What Hornik says seems 100% obvious. iPhone is still a tiny percentage of the
market. That said, they're disproportionately likely to use the web and apps I
would think.

But still, you have all of the negatives you do with Facebook Apps (capricious
overlords in total control of your fate) but with something like 5% of the
user base. And while iPhone users are clearly more engaged with that platform
than, say, Win Mo users, they're nowhere close to Facebook users.

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fourlittlebees
iPhone has the App Store, through iTunes, and is already demonstrating that
people will pay money to install those apps on their phones. Facebook apps
plan to make money how exactly?

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mattmaroon
Some Facebook apps are making a killing. There are a number of ways to
monetize other than low paying cpc ads.

~~~
fourlittlebees
The "killing" that they are making is by running ads for OTHER Facebook apps.
Isn't that just passing the VC around?

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volida
_"you gotta build apps for mainframes and DEC’s, because that’s where the
market is, not in that Apple II toy."_

faulty comparison

"He forgets that the small, seemingly unimportant platform today that gets
early adopters excited will become the large, dominant platform of tomorrow.
It might take 10 years, though, which is too long for VCs to care about."

lets get real, the only thing that makes iPhone somewhat better (in some
cases) is the UI. Where is the difficulty others making similar UI?

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13ren
I think Scoble has 20/20 hindsight disease:

 _... the small, seemingly unimportant platform today that gets early adopters
excited will become the large, dominant platform of tomorrow ... How long did
it take Visicalc to happen on the Apple II? Or Aldus Pagemaker to happen on
the Mac?_

Most of promising technologies doesn't become dominant. For one thing, there
are many small, seemingly unimportant platforms, but only one can dominate.

But I like his 5 reasons for targeting a nascent platform. Even if its market
stays small, for a DHHian business, that may be right-size. Assuming it
endures...

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maien
Scoble doesn't know anything about VC. They are just the middlemen, they need
to report back to their investor. Do you think they risk funding you and take
the heat explaining to their investors?

I can criticize bill gates for not investing in my dog breeding business
becuase it could get bigger, and keep on whinning, but what is the point?

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babul
The article seems to boil down to timeframe and the idea VCs want to make
money now. (nothing new there)

If you really are passionate about and believe in what you are doing, you'll
do it anyway even if the market/segment is "small".

Small markets can often be the most lucrative (loyal, willing to pay more,
etc.), especially if people love the products you make.

There is nothing wrong in making apps _just_ for the iPhone etc., people like
Tapulous are doing well by it.

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adrianwaj
Apple, liking to preserve quality don't allow clones. With iPhone cloning, the
VCs would see a market, and this is an issue: to clone or not to clone?

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rw
Curiously, Scobledober's blog is mostly unreadable without Javascript.

