Fred Wilson :
I wrote this to my partner the other day. I’m not going to provide the context. It doesn’t matter. It could have been about almost anything in the startup sector right now.
“the biggest thing that is wrong with the startup sector right now is entrepreneurs and their teams are too focused on valuation and not enough focused on business fundamentals”
→ A VC
It is getting late. After prodding doubtfully at a bright yellow jellylike substance that turns out to be mango salad dressing, the smartphones on the table begin to vibrate and beep once more. “Venture capital is a regret business,” concludes one of China’s most successful investors. And with that he finally turns his attention back to the gyrations of the market.
→ Financial Times
Frédéric Filloux :
Through this lens, if Wall Street could assign to The New York Times the ratio Silicon Valley grants BuzzFeed (8.5 instead of a paltry 1.4), the Times would be worth about $19bn instead of the current $2.2bn.
Again, there is no doubt that Wall Street would respond enthusiastically to a major shrinkage of NYTCo’s print operations; but regardless of the drag caused by the newspaper itself, the valuation gap is absurdly wide when considering that 75% of BuzzFeed traffic is actually controlled by Facebook, certainly not the most reliably unselfish partner.
While BuzzFeed relies on ridiculous headlines and traffic from Facebook, investors are more inclined to value BuzzFeed way higher than the Times because of the potential it can generate in the future.
On the other hand, the Times is a safe-house, which proved to be realistic 5-7 years ago by transitioning into a successful digital brand. So all in all, the growth of Times is less tangible than a relatively new website. That’s precisely why there’s such a gap between the two. Though to be perfectly realistic, considering that one is kinda overvalued and the other one undervalued (in Silicon Valley standard) these two ratios should adjust and get closer together.
→ Monday Note
Aral is leaving Ello :
When you take venture capital, it is not a matter of if you’re going to sell your users, you already have. It’s called an exit plan. And no investor will give you venture capital without one. In the myopic and upside-down world of venture capital, exits precede the building of the actual thing itself. It would be a comedy if the repercussions of this toxic system were not so tragic.
Personally, I don’t really mind VCs selling my datas to advertisers and brands. That’s the price I’m willing to pay for a good service.
The other way to build a social service like this would be to set a subscription, like App.net does, though it has not proven to be very popular.
Now, how to maintain a service without funding ?
This is mythical. I think Aral’s note falls short without explaining his ideal way to fund a company and feed its employees.
Venture Capital might not be the perfect match between privacy and social medias, but I think it sustains creativity and encourage entrepreneurs to take risk — sometimes in creating some pixel-perfect layouts.
→ Aral Balkan
The truth is that most Americans have little interaction with the big-money, small-jobs technology boom, so they might be sheltered from the worst of the technology bust, at least as it looks today, if not years from now. But that might be cold comfort: It is a sad state of affairs if one of the most vibrant, explosive and creative parts of the economy — and one of the few that is minting millionaires — seems more like a walled garden than a public park.
→ The New York Times