Wrapup: What’s on the mind of VCs, Entrepreneurs, and Industry Analysts

Left: Scale Venture Partners brought VPs of Marketing, CMOs and founders portfolio clients to meet with me last week.

When we think of influencer groups in the social media space, we often think of top bloggers like Techcrunch, RWW, GigaOm, Fast Company, Cnet, yet there’s a whole ‘nother influence group that rarely gets ink –I’m starting to spend more time with them as it helps me to better understand the space.

An inconspicuous influencer group . The last seven business days have been intensive full day sessions with vendors for my upcoming Forrester Wave research on community platforms. I’m always energized by the fire in the eyes and the passion that comes through when talking to founders and entrepreneurs. Sadly, a problem for entrepreneurs is that they often get tunnel-vision and forget to look up outside of the lab at the greater market, fortunately, they should have VCs (who often sit on their board) that help them to see further, connect deals, and provide guidance.

The interesting thing about VCs is how incredibly powerful they are in our space. Compared to the excessive noise in our industry, tou don’t hear too much out of the mouths of VCs, but believe me they are extremely powerful. Aside from the obvious power from control of funding for investments, they can influence the direction of their portfolio companies, and foster relationships between different companies. VCs influence the sellers, in my market, these are the startups.

On the other hand, industry analysts, while do have some influence over startups, have an even stronger relationships with the buyers, (and media) in this case is the the Fortune 5000 companies that seek help to make decisions on how to organize their company, staff, budget and deploy social computing.

VCs and Analysts are on a quest to answer the same questions
Despite these different takes on the same market, VCs and industry analysts are answering the same questions: 1) What’s going to matter in the future? 2) Who’s going to do it? In fact, while the methodology differs slightly, both analysts and VCs are conducting research, taking in pitches and briefs, and finding out what others think of companies before they fund or recommend them.

Given the similiar goals, last week, my long term friend Jennifer Jones, a marketing expert who is known for her work with VCs such as Mayfield, Versant Ventures, Scale Venture Partners, and Levensohn is my go to guide to meeting these folks. In fact she helped coordinate a dinner between myself and Scale Venture Partners with a handful of their web portfolio companies (VPs, CMOs, CEOs and founders) and potential investments. So what did we talk about?

Over dinner we discussed that:

  • We all see the same direction of the social web, the social graph is going to separate and be available from many different websites.
    Micromedia tools are powerful for support and marketing, but monetization is still a mystery.
  • Jokingly, Microsoft and Yahoo aren’t known for innovation and flexibility, yet we are in awe with Google, Apple, and Facebook.
    There are too many players in the space due to commodity technology, the need for segmentation and stratifcation is needed.
  • Funding for social media in the marketing space slowly grows as it gets pulled from other traditional marketing channels, many are looking at where other buckets of money can come from within the enterprise in IT, HR, and maybe even Sales.
  • There’s a need to bring the varying vendors together for roundtables to discuss how data will be shared from site to site as the entire web becomes more social.
  • Analyst/VC dinners
    As you can tell, we all learned alot from this trifecta of entrepreneurs, VCs and industry analysts; it was healthy to bring forward a larger part of the ecosystem to share with each other. VCs also want to demonstrate to their investments and investors that they’re highly connected, influential, and have a broad set of connections. Jennifer is setting up some future VC/Entrepreneur/Analyst dinners, if you’re a VC firm and want to participate, I recommend you contact her, as I’ll be spending more time with this powerful influence group as I move forward, it gives me a greater viewpoint to how the market is shaping for my research as well as providing portfolios with access to brief analysts on what they’re working on.

    13 Replies to “Wrapup: What’s on the mind of VCs, Entrepreneurs, and Industry Analysts”

    1. “…bring the varying vendors together for round tables to discuss how data will be shared from site to site…”

      That has been something top of mind for me as well. The number one request we hear from customers is how do I integrate with my ____.

      Whether it is a CMS/CRM system or another social media platform.

    2. Bingo Jeremiah, it is imperative that Fortune 500 insiders be brought into the discussion. IMO, VC’s do not bring in any new breadth, as most VC’s tend to come out of earlier “tech” start-ups a well.

      This gives business models a bias that leads to a saturation of “me too” models. Most notably here is that many of those models tend to flow around techie people..not Fortune 500 business models, nor the general populous as a whole.

      No where is this more notable then in a recent statistic from Mashable.com (perhaps was Techcrunch) which showed that over 6% of THEIR users accessed the site using Google Chrome browser VS 2% for the net as a whole.

      http://www.twitter.com/A_F

    3. Oh to be a fly on THAT wall!!!

      I’m curious to find out what VCs are thinking about Enterprise sales. Do they anticipate an acceleration of growth in SaaS products as purse strings tighten up and companies look to save money — Or, do they believe all areas of SaaS will grind to a halt?

      Curious – Thanks Jeremiah!

    4. Andrew

      You’re right, to complete the eco-system conversation the buyers have to be present. Between the marketers and the analyst (me) we were able to do this to some degree. I spend most of my time with buyers –not vendors.

    5. “There are too many players in the space due to commodity technology, the need for segmentation and stratifcation is needed.”

      Then why did you choose only generic vendors for the wave? …Instead of specialists that are already segmenting and delivering targeted products *and results* to the market?

      Doesn’t classic tech adoption theory (ex Chasm, MHTP) tell us that the segment focused players win in the end?

    6. Good questions Matt.

      There are over 100 vendors in the community platform space, see this monster (and incomplete list here)

      http://tinyurl.com/2mwa6g

      I didn’t choose ‘generic’ vendors for the wave, these are vendors that are already delivering to the Fortune 5000 interactive marketer. More on that to come.

      Does segmentation win?

      It depends on how they classify themselves, I clearly see stratification for different markets, including focus and prioritization on certain features over others.

      I can’t talk too much more about the wave till I get closer to publication. Thanks again Matt.

    7. All great points and there’s a clear value from VC association – and well-reasoned, researched industry analyst input too ;).

      Do you feel like we’ll remain in this “hurry up and wait” mode for the truly social web? I worry that we’re not taking enough chances . For example, companies need to accept failure, catch it early through measurement against business goals and move on to the next big thing. I think it’s fine to mix our evolution with revolution. I also think about those left behind in our poorer communities but that’s another post/comment.

      My biggest concern with my clients and companies I help is if they sign restrictive VC (or even traditional banking) covenants that limit their ability for longer-term success. I envision the best VC/company/analyst/agency relationships being more of a partnership for long-term business growth and innovation rather than quick pay-outs and asset re-allocation. Our global economic slowdown is putting these pressures in play again in biggest sense since 2001.

      Rob Howard: Agreed. I think you are talking more about open APIs/standards-based architectures, but bringing “the varying vendors together” can be a slippery slope. I wonder if some meetings (cable/phone/Internet companies for example) might move beyond information sharing in the social web and into policy/procedure/lobbying and even pricing? Collusion is very dangerous even under the premise of giving consumers/businesses the best services in the social Web.

      Andrew Finkle: Do you think the corporate venturing model is sound and a productive direction in shared risk?

      Jeremiah, please keep us updated as you go to more for these roundtables and influencer groups. Maybe you can do a podcasts from the next one?

      Outside our offices are great ideas that will help build the truly social web and help our world. We need “reporters” and participants like you to help make it happen.

      Cheers, Adam (@NoOneYouKnow)

    8. Thanks Adam

      Adoption depends on company culture and having specific internal evangelists. It’s amazing how single individuals make such a big difference in adoption.

      I tend to document best from blog posts, but I’ll consider a podcast for next time. more to come later.

    9. So even after Lehman Brothers crash VC’s still go and have a dinner?
      Will there be a TechCrunch after the CreditCrunch?
      Will there be no more money to burn for start-ups or wannabee technology companies?
      Will the new rule be: “Get paying customers”?

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