Sunday, November 25, 2007

Today's Globe column: What Bubble?

Today's Globe column considers the question of whether we're in the midst of another tech bubble, and if so, can it survive the economic downturn some are predicting for 2008. From the piece:

    Bubble deniers think continued increases in Internet usage and online ad spending will keep some companies cruising through any recession or economic slowdown. But bubble believers say that's about as likely as the Supreme Court successfully repealing the law of gravity.


Here's the video, shot at this month's TechCrunch party in Boston, followed by some perspectives that got snipped from the column for space reasons. (And a few comments that arrived too late for my deadline.)



New York venture capitalist and blogger Fred Wilson wrote via e-mail that he is “long-term bullish on the Internet, but short-term cautious, and also very aware of the problems in the U.S. economy and the impact they could have on the sector.”

Here's the full text of an e-mail reply I got back from Guy Kawasaki, a bubble believer:

    We're in another bubble for sure. What will cause it to burst is anything that causes companies to curtail online advertising. When you read about a company offering Porsches to people who helped it recruit people, it's time to short the market.


And from VC and blogger David Hornik, a bubble denier:

    I think there has been talk of a new bubble since the day that VCs began investing in consumer internet technologies again. The bubble of the late 90's felt great on the way up and horrible on the way down. But it was inflated drastically by a public market for highly risky Internet stocks. This time around, although there is a great deal of enthusiasm for consumer Internet startups in the Venture Capital community, there is no public market to further fan the flames. So to the extent that money is lost, it will all be the money of professional investors. And, to my mind, that will never constitute the sort of bubble that causes far reaching pain in the event that it pops.


Alan Philips is the CEO of Frame Media Inc., a Wellesley start-up that plans to deliver images and news for free to a new generation of Net-connected digital picture frames in consumers’ homes (sprinkled with a few ads here and there.) His company raised $2 million earlier this month.

Philips says he isn’t worried about how much consumers will or won’t spend buying gifts this holiday season, the first time that Net-connected picture frames are widely available at electronics stores. The word he has been hearing is that many retailers are selling out of the frames, which start at about $199.

Stephen DiMarco says that “it’s a very bullish time if you’re in Internet ad sales, marketing, or analytics,” the arena where his Boston company, Compete, Inc., plays. “It’s bad times if you’re a mortgage broker.”

“Is anything going to slow down Google’s growth?” DiMarco asks. “It doesn’t look like it, and Google is a pretty good proxy for the rest of the industry.” (Those could prove to be prophetic words from an entrepreneur whose last company, the Web development agency Zefer Corp., was slated to go public in the spring of 2000, but decided to wait for the stock market to improve. That didn’t happen, and Zefer doesn’t exist today.)

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Sunday, September 23, 2007

Today's Globe column: Why VCs Do (or Don't) Blog

Today's Globe column deals with the ways that blogging is changing the relationship between entrepreneurs and VCs. From the piece:

    There's a bifurcation happening in the Boston venture capital world: Some firms blog, and some don't. And the divide isn't just about being hip to the latest trend. It signifies an important shift in the way VC firms interact with entrepreneurs.


The video is below (it features Bijan Sabet of Spark Capital, Jon Radoff of GuildCafe, MIT Sloan student Sim Blaustein, and Mike Feinstein)... and after it, some additional thoughts e-mailed to me by VC bloggers Fred Wilson of Union Square Ventures and Jeffrey Bussgang of IDG Ventures.




From Fred Wilson:


    [Blogging is] a huge benefit to our business. Of course it brings incremental deal flow, but it also filters the deal flow and makes it more targeted and more relevant

    Its also a great way to bring needed attention to the companies we invest in

    And its a way to do research on new sectors and learn about other companies that compete with our companies

    And its a great way to learn about emerging technologies. Check out the comments to my andreessen post yesterday or my post on AIR last week. You can't buy that kind of education and I get it every day for free

    I could go on and on. Its the best tool for vc investing that I've ever seen and I've been in this business for more than 20 yrs

From Jeffrey Bussgang:

    - Definitely less about deal flow and more about transparency and providing accessibility, humanizing the VC process
    - Open dialog helps me keep in touch with entrepreneur’s latest issues and hot buttons
    - Provides sense of accountability to the entrepreneur community
    - Helps me understand social networking, community, blogging, and many other Web 2.0 phenomenon from a practical standpoint as a practioner, not theoretical

Interestingly, one thing I didn't mention in my column... at least one Boston firm, North Bridge Venture Partners, has an internal blog that's visible only to their partners and entrepreneurs.

(In my blogroll at right, I think I have a comprehensive list of all the Boston-area VC blogs.)

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