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July 23, 2007
Seven Coming Digital Uber-trends which Are Ripe for Startup Opportunities
Being in the venture capital industry, I find that sometimes it is worthwhile to take a step back from the day-to-day to take a look at the large impending trends which are just beginning to affect us. With many frequent headline predictions desensitizing our understanding of their relative importance, those in the industry (including myself) sometimes forget to (or can’t) see the forest through the trees.
And so I thought it would be good post to highlight what are some very important uber-trends which starting to emerge in the digital media space. To most readers, they likely may seem obvious, but perhaps serve as a reminder what’s likely in store. And where there is change there is opportunity; the following seven identified trends are perfect opportunities for startups to leverage:
Seven Coming Digital Uber-trends which Are Ripe for Startup Opportunities
1. The digitalization of transportation experience. Our cars are transforming from motorized transportation into digital immersion experiences. With in-dash devices ranging from GPS, to satellite radio, to integrated telephone controllers, the place where many Americans spend much of their day is going digital. Also, other transportation experiences, namely public transportation, is being affected by a digitalization trend – everything from digital signage in subways to infomation touchscreens in taxis is modifying what we do when going from here to there.
2. Internet’s facilitation of green lifestyle. With concern over the environment becoming a progressively more relevant issue, the web provides a natural vehicle for connecting people to resources and services which lessen impact of individuals on environment. We are at the beginning of “The Green Web” which will provide individuals within our society a leveraged way to positively affect the planet.
3. Influence and word-of-mouth marketing facilitated by online social software. Marketers are increasingly concerned about truly engaging with consumers as the effectiveness of traditional advertising erodes. Social software (in its broadest sense) coupled with the principles of word-of-mouth marketing will provide for successfully reaching potential customers via the most trusted source – people they already know.
4. Fundamental shift demographics of internet usage. The demographics of internet utilization are rapidly changing. Baby-boomers are getting older. International traffic and other languages are will be soon dwarfing that of the U.S. and English. Domestically, we have a growing population of youth who have never known life without internet and mobile phone. Couple these and other demographic shifts together and the internet audience of today looks very different in the not-so-distant future.
5. Mobile consumption of information. A day where everyone carries a powerful hand-held device (which includes GPS and significant processing power and memory on a higher-bandwidth network) will allow information to proliferate in a way setting which is just becoming available to a small segment of power-users. Location-relevant information ubiquity is dauntingly exciting.
6. Wide proliferation of video. While in the age of YouTube it may seem trivial to mention, but I believe it can’t be overstated. We’re moving to a world where every web page, every device, every screen will be have some type of video content. The long-tail of video content will be wagging.
7. Digital information becoming increasingly personalized with greater user control and choice. While search as proactive information-seeking reigns today, the notion of passive personalized discovery which is already taking hold will become ever more important with an abundance of information. User control and choice in that process is becoming integral in the content consumption process.
In hindsight, it’s easy to look back at companies that emerged on the wave of past important trends. Successful endeavors have an easier time with the wind against their backs. Fifteen years from now, I would be surprised looking back if many of these above categories don’t have enduring successful companies which were borne out of capitalizing on them.
(Note: This post was inspired by and largely based on internal discussions that entire Venrock team about megatrends in our industry.)
July 13, 2007
Gazing at your Own Navel: On Social Networks, Blogging, and Brands
So earlier this week I signed up for a Facebook account.
The same day I read Giga Om’s post on his “long standing belief that social networks are going to become mere commodities.“ (He uses the example of Ning adding additional networks on its platform, decreasing the individual value of each individual network, as a proof point.)
On the whole, he is right. The value of a social network is not in the functionality and technology itself. Feature parity should be achieved rather quickly on any new set of innovative aspects that a MySpace, Facebook, or anyone will introduce. Rather, like all media properties (whether digital or otherwise), a social network has value based on:
1. The information contained within it. In this case, the information about the friends and connections in network.
2. The signal value communicated to society about who a user is as a person. In this case, what being on a social network represents to others.
Essentially, what really matters is brand.
What does it mean for someone to be on Facebook? What does it mean to be on MySpace? What does it mean to be on the dozens and dozens other general-interest social networks or vertical ones which are profiled daily on Mashable. In other words, what does it say about you, who you are as a person? The answer to this question is one reason why the essay about “viewing American class divisions through Facebook and MySpace” resonated throughout the blogosphere over the past two weeks.
In the end, each media property means something different to a different set of people. It’s the brand that’s important, not the functionality.
Take an analog analog here… a magazine. Readers of a magazine like Time could care less about the printing press used to make the publication, whether it was inked with the latest technology or an antiquated one. What they do care about is:
1. The information contained within it. In this case, a weekly synopsis of the news.
2. The signal value communicated to society about who they are as a person. In this case a person who has The Economist or Us Weekly on his coffee table is potentially saying something different about who he is as opposed to Time.
I signed up for a Facebook account because:
1. Many people I know and trust and respected are all of a sudden using it, and I assumed that because they find it useful, so would I.
2. It’s reached a tipping point where it potentially no longer is about high school and college students, but rather my peer set.
There’s an interesting meme going through the blogosphere in the past week asking “now that we have social networks are blogs obsolete?” Tony Hung argues that rise of social networking sites doesn’t mean the twilight of blogging is near, but rather that it is a different medium than the social networks, as blogging is “about creating and developing [and publishing] well thought out opinions.”
Along those lines, Nivi just posted a recommendation to everyone to start a vertical blog rather than a personal one. He says a vertical blog is “… for your readers, … focused, … branded [my bold], …[and] attracts a specific audience.” He concludes by writing, “Personal blogs are dead, long live vertical blogs.” And I think he’s right. To me it’s looking increasingly like social networks are platforms for communicating information about yourself and blogs are platforms for communication about a specific topic. The exception, however, is for those who consider their own name/identity a brand and a vertical subject in and of itself. (I don’t, so I personally maintain both vertical blogs of GenuineVC and that of the WebInnovatorsGroup. Now if I could only find the time to also launch a very niche vertical content blog at my domain BostonsBestBurgers.com…)
Again, what matters here again is the brand: what info it represents and what it conveys about the reader.
When I explore a potential VC investment in a consumer-facing online media startup opportunity, one of the questions I ask is: “what is the long-term potential to build a long-term brand?” With any media property, it either needs to have wide mass appeal with an adequate monetization rate or a niche appeal with a very high monetization rate. Whether or not it has a social element to it depends on the audience. But in reality, from here on out, I suspect almost all of new online media will be some type social media.
So, yes, I’ve signed up for Facebook. Now whether I actually continue to use it is another matter… it has to continually satisfy these above two requirements.