Jeff Nolan points out in Venture Chronicles that East Coast VCs just don’t get it when it comes to Web 2.0. Harsh words but then he asks “where are the Web 2.0 companies on the East Coast?” Is it case closed? To me (an East Coast VC who was at the same conference Jeff went to), there are a few issues here that need to be parceled out.
There has always been more consumer software activity in CA than anywhere else. It’s natural for the Web 2.0 buzz to be loudest in the Valley and SF.
Historically, East Coast startups have been less aggressive (and successful, if you look at aggregate numbers) at marketing than West Coast ones. I know of a number of companies out here doing very cool things with user-generated content of all types, RSS and Web services that for some reason or other have decided that waving the Web 2.0 banner is not the most important thing they should be doing. I spend the majority of my time in Boston yet I’ve seen several West Coast companies’ pitches that go along the lines of “Web 2.0 is huge. We do that. ‘Nuf said.” I have heard only one such pitch in Boston for an Enterprise 2.0 company. Nothing new under the sun. East Coast startups are too slow to ride the hype wave and their left coast counterparts are more than eager to do so.
I was at Web 1.0 companies (Allaire and later Macromedia) and helped put the groundwork for a number of the Web 2.0 technologies from XML to Web services to AJAX & RIAs. At a recent conference in SF, I was struck by (a) how old I felt compared to the Web 2.0 entrepreneurs (I’m 33) and (b) to what extent they saw themselves doing “completely new stuff” as one guy put it. True, there is lots of innovation but I also see tons of re-spins of old ideas with better UI and the benefits of some new standards. (Mike Arrington at TechCrunch had a slide on this in a presentation he gave recently in DC.) I also see some examples of brilliant branding with little net new innovation. (No, AJAX is not new. Lots of people were building AJAX-style apps back in 1998 but they never took off because cross-browser DHTML support sucked back then.) My point is not to gripe about the “young generation” but simply to point out that Web 2.0 (and SOA for that matter but that’s the topic of a much longer discussion) is a mixture of reality and spin. I’ve seen startups with ratios from 9 : 1 to 1 : 9. I like the former and I’ve noticed that many of them care more about building great products/services which delight their customers than the label du jour that’s attached to them.
Personally, I believe in the investment promise of Web 2.0, Enterprise 2.0, E-commerce 2.0 and Mobile 2.0 because (a) there are fresh approaches there to building, using, marketing & selling great software and services and (b) kidding aside, the industry would just love to have Bubble 2.0. Polaris already has investments in three of the four categories (two of which are mine) and we are always looking for great new entrepreneurs to partner with. (Automattic/WordPress and Allurent are the ones you can find lots of info on. 8th Ring is still in stealth.) Which brings me to my final point: what startups are there to invest in out East and what East Coast investors invest in are not one and the same. I just wish Jeff had stopped by to chat while at the conference.
- Barry Briggs introduced me to Jeff’s post. Thanks, Barry.
- Jeff Nolan responds that I missed the point of his post. No, I didn’t. His post has a few great points about Enterprise 1.0 vs. Enterprise 2.0. (More on this here and here.) I’m only responding to his generalizations with some generalizations of my own. ;-)