50 ms·

Why isn't there more investment in new media startups?

10 points by jedwhite 17y ago

jedwhite 17y ago
Anyone out there trying to get a new media startup off the ground and raise money for it? I'm working on a tech startup and there seems to be a lot of interest in early stage tech. But new media doesn't appear to have the same appeal.
- pclark 17y ago
  media producing startups have massive content creation overheads. My startup is an aggregator: do you mean media creators?
  - jedwhite 17y ago
    No, although content creators would be one type of "media-first" rather than "tech-first" business I think. I think there will be an entirely new class of "curation" style businesses that are driven by media ahead of technology.
dazwal 17y ago
VCs don't like content businesses.
trib 17y ago
My view, as an outsider who has never raised money for a startup, but that watches the industry with a level of professional interest is that media startups aren't an obvious sell for investors. Why? Content. They need users and content to sell. So, Flickr is obvious, but random new content based startup, not so much. With tech startups, it's different - there's potential for value add to the bigger fish. An obvious sell-by date.
- jedwhite 17y ago
  I think you're right about the sell-by date too.
joshu 17y ago
As an occasional angel, I tend to avoid media production - it doesn't scale as well as one might like. While it's not as flat as consulting (one hour's work gets sold once) the maximum leverage on one hour's work is a multiplier based on the distribution.
- Frocer 17y ago
  So, basically it's hard to make a quick buck? But looking at history, while media-centric companies take a longer time to mature, don't they also typically have much bigger exit? Also, what's your take on user-generated media vs. editorial?
  - joshu 17y ago
    I am allocating dollars to the things that are most likely to pay out. Standard portfolio allocation exercise. The problem is that it's hard to get any payout at all if the growth doesn't fit certain parameters. It doesn't mean these aren't good business to be in. It's just hard to want to make a very illiquid investment. I'm not sure that UGC and editorial control are in opposition. As my background might imply, I'm fond of user curation... (We need a better term than "user")
brandnewlow 17y ago
Because the "tech startups" can lift the best bits of content from the "media startups" under cover of "fair use" without having to pay any of the costs. As long as the law fosters, encourages and protects selective content-theft, it's senseless to back a business that intends to create new content. Why back a team of creators when you can back 2 guys who can write a program that can lift the best information from their stories as well as everyone else's stories at near-zero cost? I doubt VCs dislike media startups so much as they dislike making obviously bad decisions. If we lived in a legal environment that said the guys behind Reddit had to pay royalties to the stories they linked to, things would be very, very different.
deleted 17y ago
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10 points by jedwhite 17y ago

Anyone out there trying to get a new media startup off the ground and raise money for it? I'm working on a tech startup and there seems to be a lot of interest in early stage tech. But new media doesn't appear to have the same appeal.

pclark 17y ago
media producing startups have massive content creation overheads. My startup is an aggregator: do you mean media creators?
- jedwhite 17y ago
  No, although content creators would be one type of "media-first" rather than "tech-first" business I think. I think there will be an entirely new class of "curation" style businesses that are driven by media ahead of technology.

dazwal 17y ago

VCs don't like content businesses.

trib 17y ago

My view, as an outsider who has never raised money for a startup, but that watches the industry with a level of professional interest is that media startups aren't an obvious sell for investors. Why? Content. They need users and content to sell. So, Flickr is obvious, but random new content based startup, not so much. With tech startups, it's different - there's potential for value add to the bigger fish. An obvious sell-by date.

jedwhite 17y ago
I think you're right about the sell-by date too.

joshu 17y ago

As an occasional angel, I tend to avoid media production - it doesn't scale as well as one might like. While it's not as flat as consulting (one hour's work gets sold once) the maximum leverage on one hour's work is a multiplier based on the distribution.

Frocer 17y ago
So, basically it's hard to make a quick buck? But looking at history, while media-centric companies take a longer time to mature, don't they also typically have much bigger exit? Also, what's your take on user-generated media vs. editorial?
- joshu 17y ago
  I am allocating dollars to the things that are most likely to pay out. Standard portfolio allocation exercise. The problem is that it's hard to get any payout at all if the growth doesn't fit certain parameters. It doesn't mean these aren't good business to be in. It's just hard to want to make a very illiquid investment. I'm not sure that UGC and editorial control are in opposition. As my background might imply, I'm fond of user curation... (We need a better term than "user")

brandnewlow 17y ago

Because the "tech startups" can lift the best bits of content from the "media startups" under cover of "fair use" without having to pay any of the costs. As long as the law fosters, encourages and protects selective content-theft, it's senseless to back a business that intends to create new content. Why back a team of creators when you can back 2 guys who can write a program that can lift the best information from their stories as well as everyone else's stories at near-zero cost? I doubt VCs dislike media startups so much as they dislike making obviously bad decisions. If we lived in a legal environment that said the guys behind Reddit had to pay royalties to the stories they linked to, things would be very, very different.

deleted 17y ago

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