November 17, 2007
I had the opportunity to speak on a panel at GigOm’s NewTeeVee Live conference Wednesday in San Francisco. It turned out to be a terrific event – everybody who is anybody in online video was there. Kudos to Om, Liz and crew!
The topic of my panel was a fairly standard “Investing in video content.” I was joined by Tim Haley from Redpoint, George Zachary from Charles River Ventures and Denis Miller from Spark. All great guys and highly successful VCs.
Typically these “Investing in ___” panels end up being 4 VCs pimping their portfolio in the guise of offering insights on market trends. (Yes, I am as guilty as the next guy).
Which is just how this panel started out. I say Heavy and JibJab are the next big things. Dennis says it is Next New Networks. George says it is social networks. Tim said it was Netflix, or something like that. Aren’t we predictable? Yawn.
Then, in an amusingly unexpected twist, our panel quickly became MUCH more entertaining (for the audience and panelists both) when George and Dennis broke into a chest-thumping “I’m smarter than you are” argument. George boldly proclaimed that there’s no opportunity for “venture returns” in content plays, and, therefore, that VCs should invest in social networks but not content. Dennis retorted by unleashing a sequence of assaults on George: that social networking is just the latest Sand Hill fad; that, other than the isolated asteroids like YouTube and Facebook, none of these venture backed social network startups will ever generate returns; that he personally had earned tremendous returns by investing in content (albeit as a media executive, not VC); that the only people who could make money investing in content were ones who, like him, had years and years of experience in the media business; and, for kickers, “how many 40x returns have you had George?” To which George scoffs at a mere 40x, evidently knowing something I don’t.
Now this was getting fun, watching these two hurl barbs at each other – they really went at it! But sadly I never really got to pipe in with my own two cents.
Having had alot of plane time over the last couple days, I’ve had a chance to think and write a fair amount about the panel’s topic. To spare you, I have broken it down into a few discrete posts:
VC Investing in Digital Content I — The Problem with the “Hits” Model
VC Investing in Digital Content II — Why the Model CAN Work;
VC Investing in Digital Content III — What Does it Take?;
VC Investing in Digital Content IV — Where’s the Gold in the New Networked Web?