You should never pass up an opportunity to listen to Union Square Venture’s supremely confident Albert Wenger.
Mine came last night when I attended an Entrepreneur’s Roundtable event in Manhattan. The ER group is a collection of mentoring entrepreneurs and investors who recently started an incubation program in NYC called ER Accelerator. Their first class graduates in a few weeks.
Back to Albert. Wenger was asked to judge a few startups at this ER meeting, but first he gave a short, but thoughtful presentation on the startup scene and the future of the Internet.
Wenger and Union Square Ventures are optimistic about the Internet, seeing the current crop of social media startups as heralding an Age of Disruption. To summarize his thinking: the Internet is now about making connections on the social graph and then charging subscribers for transactions and value-add services related to their personal data.
Though I would have felt better about his vision if he hadn’t opened his remarks with a reference to 1920s entertainer Al Jolson: according to Wenger “you ain’t seen nothing yet” as far as the Internet is concerned. I hope this new decade ends better than Jolson’s.
Here are a few insightful nuggets from Wenger’s talk:
“The real scarcity on the Internet is not publishing, the real scarcity is attention.”
“In 2008 [during the financial meltdown], we were investing the entire year.”
“News needs to be cut up into a couple of different slices. There’s commentary, and I think we solved the commentary problem: it’s called blogs … For breaking news, Twitter is the answer.”
“The only truly sustainable competitive competitive advantage of the Internet is network. That could be among people or of businesses.”
“We believe the big disruption will come from companies that are going to say that functionality is free, but in return I get to analyze your data and … when a transaction happens inside the network, I will take some small fee.”
“We are very supportive of net neutrality. We are anti software patents.”
“A lot of the innovation that was ventured funded if you go back 10 to 20 years was innovation of core technologies … On the IT side, a lot of the investing was in the deeper levels of the stack. Most of that has been commoditized … Most of the truly interesting innovation is [now] happening at the application level and beyond that at the social level.”
“You’ve got people like ‘Team Europe’ that are specifically set up to now create copies of US startups. So I suspect as a result of this arbitrage opportunity closing over time that we will see more innovative, truly disruptive things coming from all parts of the world, not just Europe, and Asia as well.”
“We are marginally approaching zero cost to launch a startup. Just to give a concrete example: FourSquare got to 100,000 active users on $20,000.”
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