2007: Happy New Year

  Happy New Year 
  Originally uploaded by jciv.

I'd like to wish everyone a happy new year. I am excited about 2007 for a bunch of reasons.

In my business endeavors I am particularly excited about the developments happening in our Union Square Ventures portfolio. We've been investing for a couple years and we now have a portfolio of companies, not ideas or projects. All but one of our companies are generating revenue. A couple will be profitable this year. And one, Bug Labs, will come out of "stealth mode" and show everyone what they have been up to for the past year. I am excited.

I am also excited to watch the companies left in the Flatiron portfolio continue to build what have become large and profitable businesses. Venture capital done well has a long time horizon. We get involved when its not much more than an idea. And in the best companies, we stick around for a long time. I love that.

I am less excited about what Todd Dagres called "a bubble in company formation" happening in the web space. As Todd pointed out in the WSJ debate with David Hornik, the barriers are so low to starting a web company that everyone is doing it. I heard from my oldest daughter that one of her friends who is a senior in high school may not be going to college because he's got his web businesses to run. That may be the right decision for him, but it points out just how far reaching this web entrepreneur thing has become.

On the other hand, 2007 is going to be the "show me" year for many of the web investments made in 2005 and 2006. And I think some companies are going to come up fairly empty on their initial business plans. That should help to keep everyone focused on the reality that not every good idea turns into a good business and hopefully it will bring some rationality to what is clearly an overheated market right now.

But I don't want to focus too much on the negatives. There are a lot of exciting new things happening, some of which I pointed to in my "2007:" posts. I hope you were able to read them.

I am really looking forward to 2007. I hope you are too.

Comments

[Stephen L. McKay]

Fred,

I wouldn’t call this post negative, just a pertinent reality check for every investor and entrepreneur alike to take note.
Happy New Year, All the Best to you and your family, and have a safe trip home!

[daryn]

While it is easier and cheaper to start a web site than ever, and to quickly turn an idea into a prototype, i think 2007 will bring the realization to a lot of web entrepreneurs that there is a lot more to building a "successful" business than ideas and code.

Happy New Year Fred! Looking forward to another year of smart opinions and good taste in music.

[curmudgeonly troll]

nice shout-out in The Economist 'The World in 2007', p. 121. I will spare loyal readers the embarrassing gushing venture capitalist porn... Further congrats on the rumours you have been successfully venturing into real estate deals... best wishes for an upbeat, prosperous and peaceful 2007!

[Tim Peter]

Have a great New Year, Fred! I agree with Stephen above that you're not so much negative as pragmatic. I think a prudent viewpoint on this latest round of irrational exuberance makes a hell of a lot of sense. If only more folks maintained that approach in 2000-2001, eh? I think we're at least a year or two away from a repeat of that mess, but better to be a year too early than a year too late. Nonetheless, have yourself a great, healthy, and Happy New Year.

[Mo]

Fred,
Happy New Year to you, your family and AVC community. Hope to gain valuable insight from you in 2007.

[Vijay]

Hello Fred,

Wish you a wonderful New Year. I wish you could pull out few Youtubes this year. May the success of Geocities repeats and shine on you for ever.

[Dustin]

I am continually impressed with the new and exciting creations which the world brings.

Happy New Years to you and yours.