Jim Morris's Thought of the Week (or month, or year, ...)
Saturday, May 19, 2007
VCs: Yes to DW, DE. No to OS, AAA.
At a recent venture capitalist panel hosted by Carnegie Mellon West and UC Berkeley (http://west.cmu.edu/sofcon/5404216.html), VCs Ann Winblad, Bill Burnham, and Scott Russell made the following suggestions:
Invest in the Deep Web. Seek out data sources that are public, yet hard to find for Google et al. and build services based upon them. Opportunities like the sources for auto navigation systems have already been snapped up, but there are many others out there to be exploited.
Invest in Data Exhaust. Companies like Google, eBay, Yahoo, and Amazon are accumulating large data bases of requests from their clients. These constitute an asset so valuable that some people think these companies should be paying us for our patronage. Good luck with that.
However, any service that attracts user queries can do this. Long before the Web, an Ohio college library consortium discovered this with a service that printed library catalog cards. Thousands of librarians diligently typed in entries for their acquisitions, paid a small fee, and received nicely printed index cards to put in those nice, wooden drawers. Imagine their surprise when OCLC created a for-profit subsidiary that offered pointers to the contents of all their libraries.
Avoid Open Source. Despite the success of companies like Kim Polese's SpikeSource, they don't see many sustainable business models.
Avoid Web 2.0 companies based upon AAA - Ajax, Adsense, and Arrogance.
posted by Jim Morris @ 7:39 AM