94 posts from May 2005
Last month I pointed to Seth Goldstein's really thoughtful posts on media futures.
At that time, he had published four posts and we were waiting for the fifth, on arbitrage.
But Seth decided to deliver not one, but four posts on arbitrage.
He's got three up so far and they are all worth reading.
Seth explains that arbitrage has been happening in the Internet media sector for years making those who are good at it fortunes.
He also explains that the thin line between arbitrage and spyware may be to Internet media what Russia was to the globalization of the hedge fund business.
And he goes on to point out how powerful attention based marketing is and that consumers have no idea what's going on behind the scenes.
There's one more to come, so keep your eyes open for it.
Many of the comments to my last post - Bagging The Post - were exactly the kind of comments that have caused me to rethink my blog posts. Readers want less posts and more relevancy. In most cases that means less posts on music, family, etc and more quality posts on the vc business.
As a first step in addressing this problem, I have suggested people Tag My Posts.
As a second step, I am tagging my posts on venture capital and technology with the following delicious tag - avc/vc/tech
I will tag all my posts that I think are specifically interesting for that audience with that tag.
I encourage all of my readers to do the same thing. I might miss something and I honestly believe reader side tagging is a lot more powerful than publisher side tagging.
Then I'd suggest that those of you who want to read just my posts on vc and tech should unsubscribe to my blog feed and subscribe to this feed.
An interesting question is whether we should use this tag for other posts that aren't written by me but would be interesting to the same audience. I am not sure yet so I would suggest holding off on that for now.
I've written three blog entries in the past three days that I've decided not to post.
Because after reading them, I just didn't feel like posting them.
It's a new experience for me.
I can't remember doing that more than three times total over the past 20 months that I have been blogging.
I feel a change coming over my blogging habits.
I used to post anything that I felt like saying.
Now I feel some sort of obligation to say something meaningful.
If I can't add anything to a link, its just easier to post it to del.icio.us and have it appear in my daily links.
I am not sure this is a good thing.
Apparently I am not alone in this experience.
Joi Ito expresses some of the same thoughts in his "Becoming Boring" post.
I'll try to avoid becoming boring too, but its hard to be meaningful every day.
John Batelle takes issue with Steve Job's desire to fight all the way to the supreme court to protect his ability to keep Apple's secrets from being outed by bloggers.
The comments to John's post argue that John is wrong and Jobs is right.
That may be true in the court of law.
But in the court of public opinion, where Apple operates daily, this is a bad move.
Normally you'd find about six or seven comments, all talking about the music.
In this case, most of the reviews are about the DRM system on the CD, not the music.
The music reviews are pretty bad too.
I don't agree with the music reviews, I think its a good album, maybe not their best, but we have it in heavy rotation and like it a lot.
So I wonder if the fact that Dave Matthews put out a CD that you can't rip music off of, you can't get onto your iPod, and insults the fan base with its obnoxious digital rights management system has anything to do with the bad reviews.
Hard to say, but it sure doesn't help.
I really have to wonder who is advising Dave Matthews on this stuff. He has a rabid fan base, the kind that the Greatful Dead had. And yet he is adopting bad practices on the digital side. He puts DRM on his CDs. And his music isn't widely available on digital music services like Rhapsody.
Someone should have a talk with him about this stuff.
UPDATE: As usual, a reader says it better. I may not be able to automatically move comments up to the front page, but I can do it manually. So here is Dan's take on this issue. This is what the music business doesn't understand but they will someday.
It really was distrubing for me, a long time Dave Matthews fan, to hear that his cd was locked down with some DRM. The music industry still believes that they can "force" people to do it their way, instead of giving people what they want. I don't want a music on a cd, I want it on my ipod. If I can't do that, I'm not a happy customer. A friend who purchased the CD before me, told me "not to bother," because he couldn't get it on his ipod. He told me to just download it off limewire instead, where not only it was FREE, but it also worked with all mp3 players. So here is a case where the free version wins, because not only is the cost great but it is so much more convenient. I would've gladly paid for the CD, but someone trying to control what I do with my music just leaves a bad taste in my mouth.
The moral of the story: Not only did the DRM prevent or annoy paying customers, but it also was unable to stop someone from ripping the CD anyway and sticking it on limewire.
Gary Rivlin has a story in today's New York Times titled "So You Want to Be a Venture Capitalist".
It's a good story line. It goes like this. Everyone wanted to be a VC in the late 90s. A bunch of big names tried it and didn't make it. The proof - they are now gone from the firms that hired them.
The problem with the story line is that its based on a small sample size of exactly three, Mitch Kapor, David Beirne, and Stewart Alsop. And it uses the past five to six years as the time frame for the story.
I think the reality is very different. All three of these guys are very talented people and would make great venture capitalists under different circumstances.
I think you need to look a lot more factors than Rivlin did to understand these stories.
The first place you need to look is at the firms. NEA, Accel, and Benchmark are big firms now. Each manages a large pool of capital and has a large investment team operating out of mutilple offices. I am not suggesting that such a structure is bad, but it does tend to create a hierarchy and a structure that often is not the best environment for learning the VC business at the partner level.
I couldn't help but wonder if a smaller, more collegial partnership might have worked better for all three of these three guys.
The next thing you have to look at is the time frame. Anyone entering the VC business at the tail end of the last bubble would have failed miserably. If you did a lot of investing in 1999 and 2000 and that was the start of your venture track record, you'd have a hard time justifying your returns to anyone.
The fact that these three guys put up bad numbers in that time frame means that they performed about the same as everyone else in the business.
Finally, you need to look at the people. I don't know any of these three guys very well. I've met them all at least once but I can't speak to their talents as investors. I suspect they didn't love the venture capital business. Many people who have been very successful in other tangential businesses decide to get into the VC business and find that they don't like it. They leave and move on to other things.
I suspect that is what is going on with these guys. Learning how to be a VC is tough. And not everyone is good at it. But I also think that it is a business you can learn to be good at if you love it, and if you give it time, and if you are in the right partnership. These ifs didn't add up for the three guys in Rivlin's story, unfortunately.
UPDATE: Silicon Beat says that Gary Rivlin is going to have a monthly piece on venture capital in the NY Times. I hope Gary's future work is better.