Fred Wilson, a very senior/smart VC in the Big Apple (NYC) decided to check if anybody was reading his blog by trying to make a point about the herd mentality of the investment community going after particular markets.
Unfortunately, the written word got in the way of his point and passion on this topic.
Consider this tidbit:
"But what do you do when you have invested in a company which has worked for years to attain a position of leadership in a market which is now developing nicely and you see your friends in the business thinking about funding some new entrants?"
When you read it, assuming you don't really know the man ( I don't), you might jump to the conclusion that there is some hidden agenda about one of his companies having new competition and the 'friends' part sets up the onslaught of comments about collusion, markets 101, etc. Who knows, doesn't matter, I'm just making an observation, don't flame me.
I have a number of observations and, hopefully, some lessons for you when you decide to offer up opinions in writing.
First suggestion up is maybe not so obvious: Podcasts.
I think if we had heard Fred talking about a bunch of goofballs in the investment community waking up one day and, lemming like, tossing gobs of money at ideas, driving up values, diluting markets, and generally making a mess for all sides, the comments might have different. With voice you get an extra dimension and some added data from which to draw a conclusion.
In addition, many (most?) podcasts are done interview style so it's possible that the person Fred was talking with might have said 'are you saying to always have VC club deals, etc, etc.' This would have given Fred a chance to correct/revise/extend the remarks for clarity.
I'm not sold (yet) on the value of Podcasts, but this most excellent episode of Wack-A-VC, makes a good point about the value of the spoken word.
Video Blogs are just around the corner, ask the folks at Serious Magic, makers of Visual Communicator. I saw these folks at CES this year, really great marketing people, nice product.
There are a couple of serious points that probably got lost in the noise which I believe are worth mentioning.
Markets. My general belief is rising tides lifts all boats. My ultimate goal is to be a nuclear submarine that, when the tide is high enough, zips around and sinks all the other boats. Just kidding, a little weekend world domination humor.
More to the point, understanding what's happening in a space goes beyond just so -n- so consulting house saying a billion seven in 2010. There really is nothing wrong with getting all the data you can regarding who is out in the space, what are they doing, who is backing who and why. So long as people stick to thy knitting and not get into sneaky/club stuff, I think it's competition and it works for me.
Personally, I've never heard of a VC firm going up to another firm and saying, we are in X, don't invest in Y please, either as a favor or some kind of wink wink, club arrangement. This wouldn't be kept secret for long and once out there, trust is destroyed so shut the doors nobody would ever deal with you again. I don't think Fred was suggesting this at all.
The whole notion of piling into a space does have an impact but it is a really hard opinion to offer up without getting slaughtered. Read the comments offered up in the posting. Ouch.
This brings me to another observation: Dialog and Blogging.
While there are a ton of investments being made in blogging and podcasting, my own view is that we are in the "black -n- white" stage of the whole space. The point is that the tools still aren't there and the environment isn't set up, yet, to fully appreciate this medium.
Consider that if you take Fred Wilson, Brad Feld, and a host of other smart VCs, you have access to a zillion years (and dollars) worth of advice, data, and potential dialog.
Unfortunately, in my view, the tools/format, etc, isn't there to really facilitate these dialogs. We have MMPG (Massively Multi-Player Games) but we don't have massively multi-participant conversations. The tools are not baked yet and, maybe, society isn't there yet either. Maybe we are applying yesterday's social structures to the tools and environment of today.
In any event, the net result is we don't really get to see Fred's elder statesman observation about the lemmings get explored in a more fulsome manner. That's a shame because I suspect there is more for all of us to learn.
[Side Tip: Forget this notion of it is hard to get in front of a VC. How can you do it? Track the VC's blog and post lucid comments as a way of establishing dialog. So far, VCs and blogging isn't the norm, so it is an interesting place where most are not crowding in. You'll have the place to yourself. Shhh..]
Robert Scoble (Uber-Blogger) hammered me on the point of diving into conversations quickly vs. taking a bit of time, being thoughtful, etc.
He made the reasonable observation that if you're not in the conversation immediately, you are on page 30 of the Technorati list or Google search which means you are basically not being heard.
I'm paraphrasing but he had a good observation which gets to my concern that smart/thoughtful people putting out observations and opinions like Fred did, do not have a good set of tools or environment for that conversation to take place in a thoughtful and more complete way.
There is an opportunity to out-google google, do a better technorati, offer up tools, etc, to get the thoughtful stuff above the noise, with expanded participation and better data for all to see.
If you've got ideas, let's talk, we're open for business. (just have to tighten these hatches on the torpedo doors)
Have a great weekend, everybody.