Cheesy Video

Jessica showed me this short Borat clip on YouTube today. It cracked me up.

Comments

[adam]

Fred,

Sorry this comment doesnt have anything to do with this post but more to do with your post (http://www.unionsquareventures.com/2006/09/traction.html)...

I was really taken in by your remark

"So, we may love the idea but until we see the implementation in a live setting (closed beta isn't live enough for us) we do not feel like we can assess the social adoption issues that are so critical. "

I have spoken to quite a few VCs and they all say the same things in different ways (Market risk, Consumer behavior risk etc...)

My question from "is the VC model broken perspective" is if the biggest risk- will consumers actually take up to your idea is mitigated then every VC who has and doesnt have an idea of the web is going to line up at the doorstep of the founder which will evrybody's dealflow and return issues more complicated.

Wouldn't the smarter thing to do to be dedicate a smaller portion of your fund ($5m of your $125M fund) to actually fund ideas that you like but whose market risk is unknown. Each idea (like the YCombinator model) would not require more than $100-$500k to figure out if there is a market adoption rate or not. Using this model, you could easily fund 20-30 ideas that would give you a HUGE advantage in dealflow for later stage funding when compared to other VCs who do not play at this stage. This is almost a best of both worlds approach where you take the early stage risk but at a smaller amount (because of the lower costs on entry) and massively multiply your advantage in later stage funding if the market risk is mitigated.

Here is where your advantage (like a few other Web 2.0 VCs) comes in. YOU personnally actually have a better idea of which design decisions are going to impact market adoption better than most VCs. Why not utilize that skill and actually bet some money on that skill. It will anyway be a smaller portion of your fund but will give you much better access to dealflow/returns later on. At the minimum, these can be written of as deal generation "type costs" and could generate some really good intelligence and side benefits in this area.

[adam]

sorry just to clarify- a good example of your knowledge of which design decisions impact market adoption is your post on why YouTube kicked goog's ass (http://avc.blogs.com/a_vc/2006/05/how_youtube_kic.html)

[howard lindzon]

genius

[jackson]

I await the Borat movie with much the same intensity as your tech staff awaited the last Star Wars episode.

[uday]

me too..cant wait for the movie!

Good to see you lighten up on the blog, Fred.

[david lee]

Fred,

I'm an avid reader of your blog and love your posts on bus, tech and cultural goodies. I don't agree with you all the time but I appreciate your fresh thoughts :)

Anyway I wanted to intro you to bawdygeorge.com. I work at Google and I'm a firm believer that the online video 'clip culture' is additive, not canibalizing. This has nothing to do with Google obviously. It's rough, a work in progress, and I hope it doesn't offend but humor is a big part of who I am.

Maybe we can meet one day :)