4 ms·

There also seems to be a contraction in digital publishing. I think the money well is starting to run dry and we might be seeing the beginnings of a flight to q

There also seems to be a contraction in digital publishing. I think the money well is starting to run dry and we might be seeing the beginnings of a flight to quality. http://talkingpointsmemo.com/edblog/theres-a-digital-media-crash-but-no-one-will-say-it http://talkingpointsmemo.com/edblog/theres-a-digital-media-c...

mustacheemperor 9y ago
The reasons for the contraction are well explained by the author in that article, though, including why venture capital investing has slowed in the sector - the business model for most of these companies doesn't seem to have the same explosive potential previous investors predicted and it's clear the expected returns won't happen either. Not an attractive market at the present moment.
- awakeasleep 9y ago
  The gold rush is over and the profits go to the big five. This is unfortunate because a lot of the 'innovation' in the big 5 comes from acquisitions, and without the VC money startups won't exist to be acquired
  - lenley 9y ago
    Following your model, then 'innovation' at the big five will slow down and there will be greater incentive for people to create new start-ups... and the cycle will continue.
    - goialoq 9y ago
      "It's different this time", but, it's different this time. As the Information Age advances, entrenched players can use their information advantage to outcompete. For example, Facebook has analytics on every small startup that gains traction, and can due much better due diligence than the startup's own investors, and so can buy the most promising ones out for cheap.
      - lenley 9y ago
        The companies still have to be willing to sell, and there's greater and greater liquidity in the market. While the ICO fad will fade, there will be new financial innovations to take the place of ICOs.
smcnally 9y ago
More than some of that is the ongoing contraction in publishing as a whole. That's been going on for ~20 years, but knowledge transfer has been incomplete. Even in good times, successful publishers don't often throw off the multiples VCs prefer. A flight to quality would be great.

mustacheemperor 9y ago

The reasons for the contraction are well explained by the author in that article, though, including why venture capital investing has slowed in the sector - the business model for most of these companies doesn't seem to have the same explosive potential previous investors predicted and it's clear the expected returns won't happen either. Not an attractive market at the present moment.

awakeasleep 9y ago
The gold rush is over and the profits go to the big five. This is unfortunate because a lot of the 'innovation' in the big 5 comes from acquisitions, and without the VC money startups won't exist to be acquired
- lenley 9y ago
  Following your model, then 'innovation' at the big five will slow down and there will be greater incentive for people to create new start-ups... and the cycle will continue.
  - goialoq 9y ago
    "It's different this time", but, it's different this time. As the Information Age advances, entrenched players can use their information advantage to outcompete. For example, Facebook has analytics on every small startup that gains traction, and can due much better due diligence than the startup's own investors, and so can buy the most promising ones out for cheap.
    - lenley 9y ago
      The companies still have to be willing to sell, and there's greater and greater liquidity in the market. While the ICO fad will fade, there will be new financial innovations to take the place of ICOs.

smcnally 9y ago

More than some of that is the ongoing contraction in publishing as a whole. That's been going on for ~20 years, but knowledge transfer has been incomplete. Even in good times, successful publishers don't often throw off the multiples VCs prefer. A flight to quality would be great.