Posts tagged with ‘fred wilson’
This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.
Fred Wilson: What do they know that I don’t (yet).
Fred Wilson interviewed on The ThinkUp Blog
Is it a Tech Bubble?…NO…Just too many Wantrepreneurs - Howard Lindzon
i said the same thing up at HBS last month. i think we are there now. maybe we’ve been there for several years. but it takes time to wake up and smell the roses.
Too many wannabe VCs, too.
Twitter Shakes Things Up Again: Fred Wilson, Bijan Sabet Leaving Board - Peter Kafka - Social - AllThingsD →
More turnover as Costolo marches out more of the old guard at Twitter, turning early stage investors out, after making room for seasoned entrepreneurs like David Rosenblatt and Mike McCue last year.
Wilson: Don’t be a Facebook bitch, a Google bitch, or a Twitter bitch: be your own bitch. #disrupt
Fred Wilson speaking about Rob Kalin of Etsy, cited by Max Chafkin in Can Rob Kalin Scale Etsy?
Fred Wilson, Curation
Om pulls some interesting data out of CB Insights regarding seen funding of internet startups:
Here is some salient data from CB Insights’ latest report covering the July-September time frame:
- Nearly $1.253 billion was invested in 233 Internet related deals. Series A media deal size was at an all time high of $3.4 million, once again proving that early stage investing is going through a frothy phase.
- San Francisco saw 36 Internet deals that brought in $131 million, while New York City saw 31 Internet deals garner $126 million. In comparison, Mountain View, San Mateo & Palo Alto saw 21 deals focused on the Internet and they brought in a total of $174 million.
- Early stage investing is dominating the New York area and accounted for nearly 63 percent of all deals. New York can thank folks like Chris Dixon and Fred Wilson for bringing investment dollars to area startups.
NYC is exploding, as I said in this piece last spring:
New York City’s tech scene is expanding at an astonishing rate these days, which raises the obvious question: why now? And, if New York has all the right ingredients to create a rich and deep technology culture, why didn’t it appear earlier?
My theory is that New York lacked, until recently, a critical factor: smart early stage investors.
The other parts of the puzzle were in place: great schools, brainy entrepreneurs, and abundant media and PR people. But without the manure that VCs provide, what looked to be a great greenhouse was cold, and very little would grow.
It is manure that makes greenhouses hot, that makes them hotbeds, and the critical factor is now being provided by folks like Chris Dixon, Fred Wilson, and John Borthwick. Chris Dixon recently made the case that the financial services downturn has dumped a lot of smart people out of financial sector, and also chimes in on the role that smart investors are having:[…] why did New York City lag behind the West Coast this decade so much more than last decade? Especially since the internet in the 2000’s has been more than ever about consumers, media, and advertising – traditional New York City strengths?
I think the only explanation is that the finance bubble of 2003-2008 was a giant talent suck on the East Coast. The people I knew graduating out of top engineering or business programs on the East Cast were all trying to work at hedge funds or big banks or else felt like fish out of water and moved west. Money was flowing so freely in the finance world that there was no way the risk/reward trade off of startups could compete. Eventually it just became downright idiosyncratic to be a startup person on the East Coast. The Larry and Sergey of the East Coast were probably inventing high frequency trading algorithms at Goldman Sachs.
But this is why New York City now seems poised for a technology startup boom. The finance bubble has burst and the industry will hopefully return to its historical norm, about half its bubble size. The traditional advertising and media businesses are in disarray. The people who work in them will no doubt find new applications for their talents.
There is also a nice ecosystem developing in New York City. Union Square Ventures is one of the best VC’s in the country, with early stage investments in companies like Twitter and Etsy (that were followed on by top West Coast VCs at significant markups). Bessemer is an old firm that has a managed to stay relevant with investments in Yelp, Skype, and LinkedIn among others. There is also a new wave of scrappy Boston firms spending a lot of time in New York City – specifically Spark, General Catalyst, Flybridge, and Bain Ventures. First Round Capital out of Philadelphia is extremely active in early stage investing in New York. There are a bunch of veteran entrepreneurs actively investing in and mentoring seed stage startups. Google has a big office here and many people seem to be leaving to go start companies.
Fred Wilson of Union Square Ventures, recently made the point that NYC has been slowly growing as a start-up hub for a decade:Chris [Dixon] argues that for the past decade, hedge funds and wall street have been a huge talent suck here in NYC and now that they are scaling back, our kinds of companies will find it easier to attract the best and brightest. I agree completely.
But I take some offense to Chris’ view that NYC was “irrelevant” in the 2003-2008 internet boom. TACODA, Right Media, Gawker, Quigo, Delicious, Etsy, Meetup, Indeed, Tumblr, Return Path, etc, etc. I don’t call that irrelevant. I call it misunderstood. Good thing people, including our Mayor, are waking up to what a good thing we’ve got going here.
I think a tipping point has been reached, though, where all the pieces are now connecting, and we are moving past an inflection point into explosive growth.
And the result will be a richer, growing, and more dominant tech scene in NYC.
- Fred Wilson Says New Data Shows New York is More Efficient Than Silicon Valley (observer.com)
- Overall Investment Dollars Down, Says Quarterly Report, But Seed Deals Strong (readwriteweb.com)
- Why New York Will Challenge The Valley for Consumer Internet Supremacy (businessinsider.com)
For a piece coming from an analyst firm with the work ‘insight’ in its name, you’d expect a bit more insight offered and not just numbers.
CB Insights has determined that ‘pure play’ twitter start-ups are getting less funding than formerly:
As Twitter’s popularity has grown with users, we wondered if this popularity translated into more investment by venture capitalists and angel investors into pure play Twitter startups? CB Insights’ venture capital and angel investor data suggests that venture capitalists and angels may be a bit less sanguine about the Twitter ecosystem than they were last year. This is the opposite of what we saw in an earlier analysis for another hot ecosystem – Apple’s iPad and iPhone ecosystem – which saw a 220% increase in funding vs. last year.
First, the bad news…Last year (from June 2008 to May 2009), we’d seen $21.6M fly from venture capitalists and angel investors to pure-play Twitter startups. In the June 2009 to May 2010 timeframe, the investment funding dropped over 50% to $10.4M.
Now, the good news…The number of investment rounds held nearly flat with 11 rounds in our analysis of last year vs. 10 rounds in the more recent timeframe. This does, however, show that average amounts invested by investors has dipped fairly dramatically going from nearly a $2M average round last year to just over $1 million more recently. We also saw a high degree of collaboration between angel investors and venture capital firms on these deals and that these pure-play funded Twitter startups were going to a diverse array of industries.
There are lots of theories on why the amount invested has dipped with the most popular explanation being a feeling of uncertainty by application developers and investors alike about the direction Twitter will go. More recently, compounding the uncertainty are acquisitions by Twitter of the likes of Tweetie and Summize (filling holes on its platform)? Time will tell if these moves will drive investors to be even more cautious about the platform?
Oh, damn: not ‘time will tell’; not that lame line.
The post links to Fred Wilson’s incediary Twitter Inflection Point post of last April, in which Wilson (an investor and board member of Twitter) throws down the gauntlet, and basically warns the Twitter ecosystem that Twitter will be filling the self-created ‘holes’ in the product, and many niches in the Twitter ecology will no longer be viable for third-party vendors.The following week was the Twitter Chirp conference, where Ev Williams announced the acquisition of Tweetie to be the Twitter client on iPhone, as well as a Twitter developed Blackbird client.
So, there is ‘no time will tell’ involved. Here’s what I wrote after Wilson’s comments and before Chirp:
Here’s what is happening: Twitter is consolidating its position at the center of the ecosystem it has engendered, and as part of that functionality that is deemed necessary to the infrastructure is going to be built by them, or at least owned by them through acquisition.
The old model had a lot of holes, like search, clients, Url shortening, pictures, and geolocation. These niches had many players trying to establish themselves, creating a rich ultrastructure above the platform:
Twitter started to buy some companies to fill glaring holes (like Summize for search) and they have built some parts of other capabilities (like their own URL shortener for direct messages), but mostly the maps was still a mess.
Now, they have bought Tweetie, built a client for Blackberry, and they are moving toward a new theory of where the platform begins and ends:
Of course there is no saying that Twitter will leave the line there. They are going to have to make their roadmap clear at the upcoming Chirp developer conference, so that third parties can make reasonable investments in new applications without the fear that Twitter will step on their toes.
However, I am making a bet. I am sure that Twitter realizes the value of analytics: the treasure of information about the flow in Twitter can’t be treated as a side show, because it is the show. Therefore, I am predicting that Twitter will build or buy technology to capture all sorts of information — what links are streaming by, who’s using what hashtags, and sentiment about brands — this is enormously valuable. Acquisition of companies like Radian6, bit.ly and a few others would make sense, especially considering the value to large companies, media, and even political parties.
The other ultrastructure niches really make sense as independents. Consider games: they come and go, like hit music, and it requires a big sprawling community of developers. Not a good fit inside a single monolithic company. The same is true with communities, like Stocktwits. And obviously, niche apps.
So, Wilson’s shot was heard round the world, and now Tweetie is part of the new Twitter infrastructure.
This won’t mean the end of competition by players like Tweetdeck or Seesmic. These have large and dynamic communities of users. But we have to see how Twitter plays this nesw game. Will they use the same APIs as everyone else, or will they exploit their knowledge and access to the inner workings of Twitter’s technology to make their own offerings faster and more reliable, a sort of Microsoft approach? Will Twitter transform itself into a Salesforce-like platform, with hundreds of integrated offerings, but owning the CRM heart of the platform?
So, investors are steering clear of those potholes, and maybe even areas like analytics, which Twitter will want to move into, even if they haven’t done anything yet. The future is very cloudy, and the investors are looking for lower risk bets elsewhere, which doesn’t concern Twitter’s shareholders.
It does suggest that Twitter might be served by an IPO, however, since that would be the cheapest way to attract the capital it needs to build its own ecosystem of services as a competitive strategy against Facebook and other social networking giants (like Apple and Google).
- Venture capitalists tire of Twitter-y start-ups (news.cnet.com)
- Investors Squeamish About Third-Party Twitter Apps [STATS] (mashable.com)
- The New Reality of the Twitter Ecosystem (gigaom.com)