There is clearly a mini boom taking place in early-stage high-tech startups at the moment.
That’s what I’m building, so it’s a topic close to my heart. I’ve got some thoughts on that boom that will keep for another post.
But I’ve always been interested in new media businesses too, and it surprises me there isn’t more investment interest and activity around new media-driven startups at the moment.
The conventional wisdom is that media startups and content businesses aren’t attractive, so VCs and angels aren’t interested. I can see how businesses that are built around just putting new content online aren’t going to be appealing.
However, as Clay Shirky’s great recent post outlines, we are going through the greatest period of creative destruction in the history of media.
Existing media businesses are getting smashed. At the same time, there is a lag between that smashing up of what exists today, and the creation of the new businesses that will replace them.
This has been accelerated by the downturn, but it is actually bigger than any single swing of the economic cycle.
Shirky points out that when you look at the introduction of the printing press, the media industry landscapes before and after bear little resemblence. There was no smooth transition or evolution from the old to the new.
The same thing is happening here. The great media businesses of the next century – the News Corps and Disneys – have yet to be created. They will make use of new media technologies that haven’t even been dreamed about yet but many will be driven by ideas around content and audiences. That is, there will be successful companies that are media businesses first, rather than only those that are technology businesses first.
Let me use Facebook as an example. Facebook is a social media business. But I would argue that it was a technology-driven startup not a media-driven startup. Its core competence is providing technology the helps people connect with each other and share stuff that matters to them. That is a business that sits at the intersection of technology and media. But it’s approach, I would argue, is technology first. So it is the sort of sexy company that attracts investment.
I think there will also be great businesses created that are media first.
It’s unlikely today that they would be able to get funding from the venture sector, and are likely to be created in spite of the venture capital model rather than because of it. It may take a few years before we even become aware of what they will look like.
They are out there, however. In the protozoic ooze of a million blogs and micro media businesses, I think there is the early DNA that will turn into the big media beasts of the next century.
My feeling is that they would struggle to attract investment in the way that an interesting technology-driven startup in the media space might, and there will be opportunities missed because of that.