Every other venture capitalist one encounters in Silicon Valley now seems eager to reinvent himself as an expert who can spot hot new consumer-driven Internet ventures. (Gary Rivlin. NYT)
Venture capitalists are good at many things, but, generally speaking, reading trends in consumer taste and preference is not one of them.
Sometimes they acknowledge this, as they did after the dot.com run up.
“Almost universally, venture firms said, ‘You know, we’re not comfortable working with consumer stuff, we’re really technology- and engineering-based firms, we made a mistake going into these businesses and we promise never to do it again,'” (Tod Francis, Shasta Ventures.)
Then they forget. According to the NYTs story, David Sze of Greylock Ventures gets several calls a month from VCs who want to invent with him.
“They’ll say, ‘I’m a consumer guy, let’s invest together,'” Mr. Sze said. “But when I read their background, it turns out they’re telecomm guys. [ ] I think it’s great that the Internet consumer space is heating up again. But consumer is also quickly becoming a space where lots of venture capitalists are diving in without a clue.”
Now I am not going to do the usual arts & letters, social sciences, culture studies, & qualitative thing, and mock the VCs for their presumptions.
In point of fact, those who claim special training and sophistication in this area dont have much to brag about. We dont use numbers, so we have no sense of scale or interval. We black box much of our analysis so that the visitor must take our conclusions or leave them. We are much too cool to define our terms or to ask the terms be defined. There is a species of “identity scholarship here that says you cant ever admit to not having heard of a trend, a singer, a director. We are shameless about inventing proprietary language when perfectly good, and more distributed, terms exist. In sum, we are running mom and pop shops in a world that has higher standards and more powerful operations.
Too bad. The VC analytic traditions, the power and acuity of their thinking would make a contribution to the common goal: to track and anticipate a culture that now moves faster than the analysts who wish to understand it.
References
McCracken, Grant. 2005. Brands behaving badly: the naming and claiming game. This blog here
Rivlin, Gary. 2005. Venture Capital Rediscovers the Consumer Internet. New York Times. June 10, 2005.
Blog list changes:
I have added Denis Dutton to the bloglist. Dutton endeared himself to just about everyone a couple of years ago by hosting the “bad writing contest which helped to publize (and one hopes, to shame) the rhetorical abuses being committed in the name of post modernism.
Pepys project
I will be doing a segment of the Open Source show on the WGBH show Open Source on how the internet can help us accomplish a more thorough documentation of the contemporary world. I have an interest on this topic as you will see on this blog one level up. More details on the WGBH show here
Last matters
Over the weekend, with the help of David Ely, I will be moving from Movable Type to TypePad. I am hoping this will be a seamless transition. Please forgive, if it is not. Thanks to Tom Guarriello for the suggestion.