Matt Marshall is a smart guy, but he is retailing a myth in a Mercury News column today. Matt says that venture folks travel in packs, which is true, and that they are now packing into consumer electronics electronics startups, which is false.
His evidence? VC investments in companies like Entropic (video over coax), Amimon (wireless high-def video transmission), and Cradle (video transmission). While all of those companies admittedly have received hefty recent venture investments, calling them consumer-facing is like calling parts suppliers to Toyota consumer-facing — the products into which their components are installed eventually ends up with consumers too.
Venture investors are not doing consumer electronics companies, if by that you mean investing in products sold directly to consumers. While it may yet happen in the rapidly changing world of venture capital — I had a fascinating lunch on this larger subject yesterday with a VC eminence grise — but VC investing in consumer electornics is vanishingly small.