Are VCs the Real Chasm In 2.0?

I think the answer’s simple: VCs. VCs are great are crafting value
propositions for enterprise software and semiconductors. They
understand those industries very, very well.

But they
distinctly don’t understand media and culture, and so they can’t craft
value propositions (or build the right relationships, etc) for their
portfolio companies – and that’s when they invest in the right
companies to begin with.

The short answer is: Yes

I was on a panel recently focused on web 2.0 in the enterprise and I made the comment, about 2/3 of the way through the panel, that it was interesting that all of these smart people were in the room expecting the software vendors to tell them how to implement web 2.0 when in fact the entire point of web 2.0 is to enable a high degree innovation and creativity in how it gets deployed. In other words, it’s  up to the enterprise in question to find the right mix of software and application in order to realize value.

There was a comment in the above blog post that caught my attention. Michael respectfully disagreed with my statement on this and to be quite honest I think his logic was accurate as to why I was wrong to say what I did. However, as Ross pointed out in the same panel, Socialtext “sells features, customers figure out the benefits” and that I very much agree with and this is why I think it’s accurate to say that not only are venture capitalists caught in the chasm, but traditionally trained marketing people as well (full disclosure, since leaving Ventures I have been part of a traditional marketing organization). Therefore, under the filter of traditional marketing I was wrong to suggest what I said, but considering that traditional marketing may not be appropriate for web 2.0 at this stage I’m still going to say it.

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1 thought on Are VCs the Real Chasm In 2.0?

  1. could not agree more. If you read my innovation blog – New Florence. New Renaissance at

    much of the innovation in business is coming from applied technologies – CIOs takng building blocks – web services, RFIp, GPS, mobility, predictive analytics, even older scanning and other technologies – and mashing them up to unique process and vertical applications. That is where the excitement is. VCs and vendors are delivering just a small piece of the innovation.

    It raises some fundamental questions for the industry. Should a CIO pay $ 1 to a vendor and see may be 10 to 15 c invested in R&D and then watch even that get diffused – 8 versions of MS vista – or should they save the $ 1 and use it as “full oxygen” for their own applied innovation

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