Today we've closed a financing round with our co-lead, Brightspark Ventures into B5 media. At first, I really wanted to just sit back and let the rocks fly and blogosphere go nuts with the who/what/why and the zillions of opinions.
Then I thought, the better approach was to follow in the footsteps of smarter VCs than me (Fred Wilson, Brad Feld to name two) and explain why we've invested in b5 media.
The Rick Segal, newbie venture capitalist disclaimer:
I"m about to invest a bunch of money for these reasons and I could be wrong.
First, blogging is not the end game. Online Bulletin Boards, Journals, Newgroups, etc, have all been around for years and there is nothing inherently new about people expressing opinions, telling stories, sharing recipes, etc. It is not, in my view, about the act of blogging.
What is different today are the habits of a generation coming right up my proverbial tailpipe. They share a passion for information, the sharing of information, and most importantly the critical examination of information as a community. We've seen famous people busted for saying/doing dumb things, amazing ideas get accepted lighting fast, and unknown issues become major mainstream causes virtually overnight.
With all of this comes information overload and, of course, with information overload comes opportunities on a number of fronts.
The most obvious is authority. Today for example, Mike Arrington enjoys some great respect and authority when people think about technology and opinions on start up companies. I, along with 1000s of others, enjoy Techcrunch. Mike's enterprise continues to grow value. I believe that the markets and the focus of b5's increasing blogger ranks will continue to grow their respective authority and thus increase the networks value.
There are opportunities for new authorities on topics of all kinds to emerge and b5 is a great platform to bring those authorities to market.
The next opportunity is a chance to execute on Doc Searl's vision/theory of the intention economy. Doc and I have talked about this for years with Doc writing about this topic often. The general thinking on Doc's thesis applied here is fairly simple. When I sign up for a blog about a specific topic, there is an intent by me to obtain that knowledge. With that knowledge comes the ability to focus economic offers that may be of interest to me. I own a Volvo, read a Volvo blog, and find offers (ads if you will) about things about/for/related to Volvo of interest and not necessarily noise. I love digital photography, listen to smart people and do read the ads when I'm immersed in that hobby.
All of this translates into an opportunity to grow a business that is about the intention economy. While many will dismiss this as just blather about making money with ads, I believe there is more to it and b5 represents a good opportunity (and great team) to test out/play out some of these ideas.
These are early days and Jeremy's team at b5 have some excellent momentum with which to grow, experiment, learn and tune a great business in this 'new media' space.
Finally, there is Shel Israel. Shel has been working behind the scenes with Jeremy and I on the whole topic of the global neighborhood. I'm delighted Shel is going to continue to work with the company in expanding roles over the coming months. Shel's general expertise (and passion) about blogging combined with decades of experience in media, offer b5 a unique perspective and valuable cache of wisdom that we can apply while building the global neighborhoods. There is a super smart person in Dublin Ireland that has forgotten more than I know about my Nikon D200 camera. That person, blogging, becomes valuable to me and all the other Nikon Digital buffs. The global neighborhood is about finding her and b5 is about building that structure to have the voice heard, possibly become an authority and hopefully add value to the over all b5 network.
Lots and lots of people are going to go, yeah right, bunch of VC lemmings chasing flavor of the month, pissing away gobs of cash on another me too blogger pile. In the words of Seth Godin, I can only respond; so?
Slightly more seriously, it is early days. We've found a very, very passionate team of young entrepreneurs and a super partner in Brightspark who want to collectively explore these opportunities. I expect the rocks, expect the armchair quarterbacking and expect, well, expect what goes on in the blogosphere.
But before you pick up that rock or fire off that rant, how about a well done for Jeremy, Duncan, Darren, Shai for working hard to build a business, actually have revenue (!), and showing the passion, excitement, and drive that, in the end, will matter the most. Well done, folks, well done.
The mud pit is now open. :-)
Great play Rick
I think this will be a winner and being a B5 subscriber already I am looking forward to seeing more content.
Congrats to Shel also, no less than he deserves.
Best wishes
Posted by: Pat Phelan | October 04, 2006 at 15:35
I'll throw the first mud. ;)
Of course, this is great news - well done to all and hope the investement is a winner for all.
Now give us a figure?
Posted by: Martin | October 04, 2006 at 18:27
They are deserving... congrats to b5media team. Their hard work can attest to their success...
Posted by: Minic Rivera | October 04, 2006 at 18:30
The guys at b5 really seem to understand blogging and how to find great bloggers for each individual niche blog. Their passion shines through and they treat their bloggers like family. (disclaimer, I'm a b5 blogger)
Posted by: Robyn Tippins | October 04, 2006 at 18:31
Martin,
US$2 million bucks.
Posted by: Rick Segal | October 04, 2006 at 18:32
Thanks Rick,
Can you tell us how much of a stake you have taken in b5?
Posted by: Martin | October 04, 2006 at 18:41
In my best jewish voice:
"Just a little nosh...."
:-)
Beats "sorry, confidential..", eh?
Posted by: Rick Segal | October 04, 2006 at 18:45
In my best Aussie voice ...
c'mon, mate. ;)
Okay then ...
you will be chairman of b5?
Posted by: Martin | October 04, 2006 at 18:53
I am, sir. It was the surest way to get a boondog, errr, important fact finding mission down under. :-)
Posted by: Rick Segal | October 04, 2006 at 18:56
Ah Rick...
a boondog? :D
Posted by: Aaron Brazell | October 04, 2006 at 19:09
Arron,
I use any excuse to visit. Amazing country, wonderful people, outstanding diving, great cross country trains.
>R<
Posted by: Rick Segal | October 04, 2006 at 19:13
Good to see things happening in Canada, let along for a fellow east coaster like Jeremy
Posted by: Jevon | October 04, 2006 at 19:52
Congrats to you, Rick, and to the rest of the B5 media team. I look forward to even more smart, useful and informative blogging from everyone down the road!
Posted by: Dave Taylor | October 04, 2006 at 20:10
Rick,
Congrats on your investment and I hope it works a treat....
But you really should ditch the Volvo and get a Saab.
Posted by: Trollhattan Saab | October 04, 2006 at 20:47
Wow, just caught this late. Congrats to all involved. You got yourself a good B hive there. Great news everyone.
Posted by: Jim Kukral | October 04, 2006 at 20:54
Congratulations, Rick and team!
Dave
Posted by: David Sifry | October 04, 2006 at 20:59
Rick,
Great post. Great investment. Great category. I'll have more to say once I can get a minute to blog.
Posted by: shel israel | October 04, 2006 at 21:32
Rick & b5 Team,
Congratulations! I love the combo - sniper like focus on multiple verticals endorsed by passionate subject matter experts, building trust in their 'growing' and 'attentive' audience through multiple interests in diverse markets!
That's a great media opportunity to steal some overcooked search thunder and replace it with something special, trusted people and a genuine audience! Tons of value there, smart move by all.
Posted by: Adam Sculthorpe | October 04, 2006 at 22:34
well done to the boys! and girl! And to my old mate Shel. Rick, when you come down under to make sure Dunc, Dazza and Shai really exist and aren't bots, I'll buy you a drink and we can talk about Aussie podcasting investments.
cheers
Cameron Reilly
CEO, The Podcast Network
www.thepodcastnetwork.com
Posted by: Cameron Reilly | October 04, 2006 at 23:33
nicely done.
some day every vc firm will explain their investments in public.
thanks for doing this.
fred
Posted by: fred | October 05, 2006 at 04:34
As one of the b5 bloggers and one of the first folks to work with Jeremy at InsideBlogging ... this is fantatic.
Lot's of hard work but as many have pointed out here, this is a real endorsement of a viable blogging business model.
Posted by: Tris Hussey | October 05, 2006 at 10:41
Rick: Fantastic news! Having worked on a couple of projects with Jeremy and gotten to know him very well, I know how excited he must be to have to connected his group with someone like you. This is a partnership with great potential and I wish you all the success in the world.
Posted by: Marc Orchant | October 05, 2006 at 12:20
Okay..I don't see any "mud" above, so I'll play the devil's advocate on this:
From what I understand, b5media is a "blogging network", which launched with 14 blogs and now contains more than 150 blogs on various subjects. The value is in the content which is written by b5media bloggers. If a particular b5media blog becomes extremely popular, what's preventing the author from going independent ?
Also, the rest of the "blogosphere" is an informal, disorganized "blogging network", where a blog is being created every second. That is what b5media is up against. As a user, I am interested in specific post(s), and I don't care which blog or blogging network the post belongs to. Now, what's the most optimal way for me to find that specific post: going to b5media's blogging network -> finding a blog -> finding the post OR using various search tools like google, technorati, icerocket to find exactly what I am looking for ? These tools will continue to improve and developers will continue to come up with new ways of finding useful blog post(s) from the millions of blogs on the web.
Now, b5media is a predefined, static blogging network - folks have to apply and b5media approves/rejects (plz correct me if I am wrong..). A direct threat to b5media would be a dynamic web app, maybe something like digg, where users can dynamically create a "high-quality blog group" by voting up/down their favorite blogs on a particular topic. Isn't then a blogging network like b5media against the trend of where the web has been heading throughout - cut out the "middle-man" wherever possible ?
b5media needs to create specific brands. "TechCrunch" is a brand name and people can relate to it; "b5media Technology blogs" does not feel like a brand to which people can identify / relate to when looking for high-quality technology blogs.
In conclusion, I think b5media is on thin ice, though I wish them all the best and applaud their efforts..as most people don't even try.
Posted by: Varun Mathur | October 05, 2006 at 14:38
Varun,
Thanks for taking the time to write out your thoughts and (insert applause) sign them! I really really like this type of feedback and input as it adds to the mix and makes the company's decisions that much more informed.
We're hiring! :-:
Posted by: Rick Segal | October 05, 2006 at 15:08
$2 million for what? Rick, what do you invest in? Technology, content, talent? What is B5 media good at? Am I the only one that doesn't get this deal? What's the USP (unique selling proposition)? Most blogging networks could be described as boring and lame... Lots of copycats... Where is the innovation? Nothing new after Nick Denton and Jason Calacanis. Anyway, Jeremy is a smart guy and I hope he could create something new.
Posted by: Dimitar Vesselinov | October 06, 2006 at 04:52