When the Geeks Get It Wrong

Bubblegeneration piles on with the MySpace?! panic with some analysis – particularly on why VCers (and the developers) tend to not grasp the underlying trends:

Why the VC disconnect? My answer: investing in enterprise software and semiconductors is distinctly not like investing in media and other culture industries. In fact, I would argue that VCs are in a competence trap – it’s exactly those things that made them successful at investing in software and chips that make them very unsuccessful at investing in culture.

Mentioned is Makeup Alley – a site just on cosmetics. Here’s why it would have been a good property to buy:

What it does have is a very, very, very deep understanding of what consumers in it’s vertical value, how to connect them into a coherent community, how to manage and regulate this community, and how to translate those connections into deep and shallow value creation.






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