Good Ideas might have to wait for funding
Venture Beat is reporting that funding is down for VC’s and business, which at this point is not too surprising. With wall street and its pundits forecasting a slowdown of the economy for 2008 and 2009 (avoiding the word recession) it only makes sense that VC’s are going to look at the “great idea” a bit harder now, and in the foreseeable future.
Not necessarily. Sequoia Capital and Draper Fisher Jurvetson, two respected firms, were the most active investors in Web 2.0 globally in 2007. However, both of those firms invest widely outside of the U.S. Maybe Web 2.0 is over in the U.S.? In the U.S., investments in Web 2.0 were virtually unchanged from the first half of 2006, with 67 deals and US$357 million invested, according to a survey by Dow Jones VentureOne and Ernst & Young. Source: Venture Beat
Given what is coming out of the various companies right now, it makes sense to pull back. There has been a plethora of look alike products that are on the market right now. There can only be so many ways to deliver video, there can only be so many ways to deliver friends and family to a social network, and frankly there can only be so many major social networking sites that are going to make it.
While niche sites might show some growth, Facebook, MySpace, Bebo and others will continue to slog it out for who is number one. It is hard to convince a backer that the greatest social networking site in the world is going to be all about Snickerdoodle dogs and the people who raise and breed them. This is a limited population, and one that is going to have a hard time getting funding.
Others chime in with some extra words, like Silicon Alley Insider, TechCrunch and The end of the beginning, but it all centers around the idea that no one good idea is just going to be found in the USA. That overseas, Europe and Asia also have some really decent programmers, and ideas on what will work best for their populations. Not everyone wants to be part of MySpace global, rather the regional social network, much like the regional Google, Yahoo and MSN are going to be part of the landscape. As well as the way that people want to interact with their social networks.
Funding Europe, and funding Asia for web 2.0 makes sense, and spreads the risk outside of Seattle, Silicon Valley, and other hot spots of innovation. People are also going to go where there is a greater chance of getting a decent return on their money.
Might be hard on USA start ups, but it is also then the idea that USA startups could be focusing on other markets than music and video delivery, and adding whole new definitions to the world “Friend” that did not exist 5 years ago.
[…] has two articles here and here covering the same basic ideas, even we have written about it in the past as […]