Friday, June 09, 2006

Web 2.0 Services Venture Capital

Classic Examples of Web 2.0 and what Venture Capitalists think about the emerging Web 2.0

The Delicious is a good example

  • Technology enabled service businesses are becoming very important

  • Relationships between companies and corporations

  • How you can do things with a very small staff

Encourage people that believe in

  • Microformats

  • Blogs and social collaboration

  • Google is a very abundant service

  • Abundance of information

  • Google aggregates all the information on the net; where the attention is

  • How to create a dialogue with the market

  • We value conversation

  • Research and Product development

How we want to operate with our clients

  • We try to be as open as possible

  • Through sharing the knowledge base we are learning all the time

  • Blogging and personal blogging

  • Our corporate web space is blogging based

  • We operate in a very complex world

  • We talk about services on top of the infrastructure

  • What’s going to work in a particular context

The Dialogue helps us to see the market

  • The emerging opportunities

  • We share our own insights

  • What we are paying attention to

  • We don’t have time to process all the information

How easy is it to start a company today?

  • Businesses that are application level are less capital intensive

  • Infrastructure based businesses do require huge amounts of money

  • Seed money is needed at the first start-up level

  • Before companies needed 1 to 2 million dollars or euros to get a product out

  • Now with Web 2.0 level businesses you can start with very little or hundred thousands

  • The need of venture money rises when the organization starts to grow

Web services based company

  • Google built its services with 38 million US dollars

  • We have to feel comfortable about where to invest

  • The Web 2.0 conference last year in November was a wake-up call for me personally

Being good partners to the entrepreneurs

  • We have a very narrow focus

  • Union Square Ventures is a venture capital company

  • The opportunities are much more capital efficient

  • There will be much more small and medium size companies growing in the near future

  • We are interested in the edge

  • In the blogosphere everybody can become the house theorist for a day or a week

We’re very well grounded in this sector

  • How do you invest in web based services and applications

  • What makes sense and what’s not

  • Feed-burner? creating the use-base

  • What is the promise of a company like that

  • We try to be very interchangeable

Why did we miss the opportunity?

  • We started to talk with people

  • Publishing said that they will do their own feeds

  • Publishers were very naïve about RSS in the early stage

  • Providing a service to the publishing industry is to be between the margins

  • Feedburner – the feed in its self had an intelligence in itself

  • It became a very interesting thing

We were able to talk ourselves into it later

  • We have the perspective on that market

  • Delicious had some angels around and Amazon was there as well

  • The raw material for venture capitalists are the entrepreneurs

  • Delicious was all about how to bookmark on the web instead of your browser

  • The categorization is very simple and easy to use

  • Yahoo bought the business

  • What all could have be done

Do you Delicious?

  • It could had flourished much more as an independent company

  • Innovating with business models

Are people being creative today with business models?

  • We talk with entrepreneurs all the time

  • Give a product for 30 days

  • If you shift that to web services model

  • Why should you cut them off by 30 days

  • Don’t do the cut-off time based

  • You have to rethink prices in the context of web services

  • We are constantly looking for business model innovations

When you want your data back

  • What is the best thing out there now

  • One of the great things out there is now

  • We take our pitch book and we are very lucky to find out

  • How things come to our space

  • We have been able to build up a disproportionally good reputation in a short time

There were two deals we didn’t do

  • Side adviser – it tells if a web page is good to go too or not – McAfee bought it for a substantial amount of money

  • Feedburner

  • People come up with great ideas every single day

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