8 ms·

Why the Smart VCs Are Boarding their Jets

31 points by transburgh 18y ago

vaksel 18y ago
because there is more opportunity oveseas now. India and China will each have more internet users than USA within a few years
- dpeq 18y ago
  This does not necessarily imply innovation happens there.
  - vaksel 18y ago
    thats the point, those countries are just starting out. You can just copy paste proven ideas from the states and make millions. Like Mint? Angry that you missed the boat? Good news! Invest overseas in the same type of company, and watch it grow to become a market leader by having a monopoly. And you have a guaranteed exit lined up, when Mint enters your market and decides to buy you out. Sure the core innovation will still come from the states, but the first innovator is rarely the guy who profits from the idea.
    - warkaiser 18y ago
      I agree with part of that. Look at the German LinkedIn competitor, which is a publicly traded company. It is the local leader, but that did not stop LinkedIn from moving in there. In the long run, the only strong brand is a global one. I do not see an opportunity for every region to have a successful me-too competitor.
      - moe 18y ago
        I do not see an opportunity for every region to have a successful me-too competitor. Don't forget though, that the cultural gap between the US and Asia is much bigger than between the US and europe. It's quite likely that a successful US product can be made successful in europe by the same people. It's a different story when you move from US/Europe to India, Japan or even China. The japanese Facebook (mixi.jp) looks quite different to the US and european variants. Not only in terms of aesthetics but also in many subtile usability and feature aspects.
        potatolicious 18y ago
        The Chinese facebook (xiaonei.com) is another good example of this - it started as a complete facebook ripoff, but has now gained more momentum than facebook has in that country, and is evolving its own feature set. This goes to support the point that, for the next while at least, "me too" business models WILL work in developing nations.
  - deleted 18y ago
    [deleted]
krschultz 18y ago
The basic crux of the article is that VC != technology investors, and that money spent in emerging markets on relatively commodity businesses can yield returns similiar to those seen in the 90s with tech businesses here, while here tech businesses are maturing and not returning the same as they used to. I think this is a good thing for the world overall, the more people that come up to the middle class, the more people that will have disposable income to spend on products. I just think that there are plenty of promising ideas here to invest in as well if they start looking past Web 2.0 in favor of more concrete businesses.
- old-gregg 18y ago
  Very nice to hear: "good thing for the world overall", how cute. However, quality of life basically translates into resources/population ratio within a country and that's a zero-sum game. The planet at the current level of technology couldn't even provide for all existing Chinese to suddenly start living like people in US/EU do, yet their populations, especially if measured in number of households, much more relevant than just counting heads, keeps growing. And no amount of Internet innovation will solve the problem of diminishing clean water, oil, ocean fish, disappearing forests, soil erosion and increasingly bad air quality. Right now 1st world countries are basically "exporting" these problems to developing nations, eventually these issues will be averaged out: eventually China won't be so poor to accept our non-recyclable electronic garbage anymore, what then?
  - pg 18y ago
    Any increase in someone's quality of life comes at someone else's expense. Historically that has not been the case. Historically quality of life improvements have come from technological discoveries (e.g. penicillin) and social evolution (e.g. of the middle class). Who loses if penicillin is discovered? Who loses if some former serfs decide to become artisans instead? The single biggest improvement in quality of life for most humans over most of history has probably come from improved hygienic practices. How does that come at someone's else's expense? I also disagree with your specific claim that "Internet innovation" can't improve physical world problems. Would you claim books don't help solve the problem of clean water? Not literally, obviously; you can't use books to make clean water, except by ripping out pages and using them as water filters. But think how much harder it would be to solve the problem if books didn't exist. And the Internet is an innovation on the scale of printing.

31 points by transburgh 18y ago

because there is more opportunity oveseas now. India and China will each have more internet users than USA within a few years

dpeq 18y ago
This does not necessarily imply innovation happens there.
- vaksel 18y ago
  thats the point, those countries are just starting out. You can just copy paste proven ideas from the states and make millions. Like Mint? Angry that you missed the boat? Good news! Invest overseas in the same type of company, and watch it grow to become a market leader by having a monopoly. And you have a guaranteed exit lined up, when Mint enters your market and decides to buy you out. Sure the core innovation will still come from the states, but the first innovator is rarely the guy who profits from the idea.
  - warkaiser 18y ago
    I agree with part of that. Look at the German LinkedIn competitor, which is a publicly traded company. It is the local leader, but that did not stop LinkedIn from moving in there. In the long run, the only strong brand is a global one. I do not see an opportunity for every region to have a successful me-too competitor.
    - moe 18y ago
      I do not see an opportunity for every region to have a successful me-too competitor. Don't forget though, that the cultural gap between the US and Asia is much bigger than between the US and europe. It's quite likely that a successful US product can be made successful in europe by the same people. It's a different story when you move from US/Europe to India, Japan or even China. The japanese Facebook (mixi.jp) looks quite different to the US and european variants. Not only in terms of aesthetics but also in many subtile usability and feature aspects.
      - potatolicious 18y ago
        The Chinese facebook (xiaonei.com) is another good example of this - it started as a complete facebook ripoff, but has now gained more momentum than facebook has in that country, and is evolving its own feature set. This goes to support the point that, for the next while at least, "me too" business models WILL work in developing nations.
- deleted 18y ago
  [deleted]

krschultz 18y ago

The basic crux of the article is that VC != technology investors, and that money spent in emerging markets on relatively commodity businesses can yield returns similiar to those seen in the 90s with tech businesses here, while here tech businesses are maturing and not returning the same as they used to. I think this is a good thing for the world overall, the more people that come up to the middle class, the more people that will have disposable income to spend on products. I just think that there are plenty of promising ideas here to invest in as well if they start looking past Web 2.0 in favor of more concrete businesses.

old-gregg 18y ago
Very nice to hear: "good thing for the world overall", how cute. However, quality of life basically translates into resources/population ratio within a country and that's a zero-sum game. The planet at the current level of technology couldn't even provide for all existing Chinese to suddenly start living like people in US/EU do, yet their populations, especially if measured in number of households, much more relevant than just counting heads, keeps growing. And no amount of Internet innovation will solve the problem of diminishing clean water, oil, ocean fish, disappearing forests, soil erosion and increasingly bad air quality. Right now 1st world countries are basically "exporting" these problems to developing nations, eventually these issues will be averaged out: eventually China won't be so poor to accept our non-recyclable electronic garbage anymore, what then?
- pg 18y ago
  Any increase in someone's quality of life comes at someone else's expense. Historically that has not been the case. Historically quality of life improvements have come from technological discoveries (e.g. penicillin) and social evolution (e.g. of the middle class). Who loses if penicillin is discovered? Who loses if some former serfs decide to become artisans instead? The single biggest improvement in quality of life for most humans over most of history has probably come from improved hygienic practices. How does that come at someone's else's expense? I also disagree with your specific claim that "Internet innovation" can't improve physical world problems. Would you claim books don't help solve the problem of clean water? Not literally, obviously; you can't use books to make clean water, except by ripping out pages and using them as water filters. But think how much harder it would be to solve the problem if books didn't exist. And the Internet is an innovation on the scale of printing.