Blog Renamed: Infectious Greed 2.0

Having been accused in a comment of running a “Web 2.0 Week“ here at Infectious Greed, I thought it best to just rename the site: Infectious Greed 2.0. I’m kidding.

More seriously, the ideas underlying any supposed change are what’s interesting, not the amped-up conversation itself. The whole dog-star-dog cycle of “Old Thing Sucks / New Thing Rules / Old (New) Thing Sucks” gets awfully high school-ish if you have been around tech investing for a while.

So why does it happen like clockwork every darn time? I wish I knew, and I wish both the predictable hypesters (you know who you are) and the predictable skeptics (you know who you are too) would go lie down for a while. Watching them wander around with no apparent idea of the part that they’re playing in an infinitely repeating tech market drama reminds me of a multi-dimensional Tom Stoppard play (“Rosencrantz and Gildenstern Get Hyped”).

The real question, at least the one that interests me is this one. Can you make money from this stuff? Yes, and there are three ways:

1) Build a hype-y 2.0 company that is fully buzzword compliant and sell it before the “Best Before” data. Happily, at least to me, that date has arguably passed.

2) Recognize that building a profitable company around conversations, open source, syndication, and blogs is really, really tough, so go and build a great & profitable tech company in some other area of consumer or enterprise software. Cool, do it and tell me. It could be investable.

3) Build a company that grows quickly and profitably by cheaply exploiting the rapidly increasing number of interconnected people and data sources online. Is that Web 2.0? I have no idea and I don’t care, but it could be investable.


  1. Forget 2.0
    Instead, how about
    3 – for being an innovative leader
    3.1 – like speakers – suggesting high end coverage yet bottom line balance and substance
    3.14 – to reflect that mysterious number that relates and ties things together
    That’s it! Infectious Greed PI. Ironically, its only 2.0 letters away from PK. Grab it before some other cretin does. Cheers

  2. I have to say that this post is spot-on! Enterprise software is still king. Consolidation of vendors will, ultimately, lead to more shelf-ware and therefore more enterprise software sales. It seems like the hype-y 2.0 companies are fighting for the same customers, early adopter-types that are trying to start the next hype-y 2.0 company. Really strange circle indeed. Hell, at least the last boom come bust had some freaky but kinda original ideas. Where is the

  3. The Great Web and Web 2.0

    If we learned anything from “Web 1.0” (no, this term wasn’t ‘Web 1.0’ until recently, sort of like how World War I was originally just ‘The Great War’), it was the demolition of the Field of Dreams mentality &…

  4. Michael Robinson says:

    Paul: “The whole dog-star-dog cycle of “Old Thing Sucks / New Thing Rules / Old (New) Thing Sucks” gets awfully high school-ish if you have been around tech investing for a while. So why does it happen like clockwork every darn time?”
    I think at least 80% of the answer can be found in this commendably honest blog entry from Peter Rip:
    There is an entire industry built around servicing the VC ego-competence gap. As Peter illustrates, it’s a seductive and intoxicating experience to sit on a tall pile of cash and decide every day who among a large crowd of eager applicants gets a piece and who doesn’t. On the other hand (as we’ve discussed elsewhere), most VC’s don’t have the technology in their blood and bones enough to be able to make an accurate independent judgement of the value and prospects of any given investable piece of intellectual property.
    Over the years, VC’s have developed strategies to bridge the ego-competence gap (to put it indelicately, to allow themselves to feel like they know what they’re doing). Some of these strategies are relatively healthy, such as focusing on the strength of the team, as opposed to the details of the technology. Some of these strategies are relatively unhealthy, particularly such “wisdom of crowds” strategies as “buzzword compliance” and making an investment in a “hot new” area because some subset of competing funds is making investments in that area.
    Because “buzz” is a key part of “wisdom of crowds” investing, a market has arisen to supply the demand. Publications, conferences, gurus, etc. However, as with most markets, the quality of the product is only as good as is necessary to satisfy the consumers. Which is to say, the people who decide whether the buzz is plausible are the same people who rely on the buzz to determine whether an investment is plausible. It’s a dog chasing it’s own tail.
    And that’s why it happens like clockwork every darn time.
    When I’ve been between full-time gigs, I’ve occasionally made money doing technical due diligence. What I’ve found is that by the time a deal gets around to due diligence, everybody wants the deal to happen, and the people paying for the work are generally uninterested at that point in having all the skeletons dragged out of the closets and all the bodies dug up.
    I expect the hype cycle to persist as long as that’s the way investing is done.