Comments on: Where to invest: Social networking or mobile?

By: Sanjay

Sanjay — Fri, 06 Oct 2006 22:30:30 +0000

Nice Article.
Where can I find information on what ideas and
problems in mobile space are being solved. I am
not looking for any secret receipe … just high level
info about services/products to come in mobile.
Thanks.

By: Steve

Steve — Fri, 06 Oct 2006 18:51:27 +0000

Startup evaluators rely on market size as a key investment issue because overall market demand represents the highest possible revenue potential – and a startup can not expect to own 100% of the market. This article well articulates another input in the equation – how much money (and how may companies) are going after that market. I can say from experience that it is hard enough to start any company and define yourself – two dozen other startups spending millions to get their differentiated message out does not help.

By: Jonathan Klein

Jonathan Klein — Fri, 06 Oct 2006 15:09:02 +0000

I agree that strict quantification of demand and supply in the venture market is extremely difficult to quantify. However, there are some clear factors such as the rapid emergence of a new market and low barriers to entry which signal a likely gold rush. As I alluded to at the end of the post and expand on in my blog http://topblog.toplinestrategy.com, I believe there are still good opportunities in Social Networking, but they will be companies that establish very different models than the early success stories like MySpace.

By: David G.

David G. — Fri, 06 Oct 2006 06:26:47 +0000

Like supply, demand might be too elusive to measure as well for many startups in emerging markets, such as social networking and mobile. As Jonathan’s second reasoning alluded to, factors such as timing, technology, policy, team, and maybe weather all play some some roles in determining the “right” number of startups that should be invested in a given industry. This could be a good example of the VC social networking investment throughput theory.