MySpace and the VC Competence Trap

Good stuff from Umair on the VC competence trap and how he thinks it has made investors afraid of MySpace:

Why the VC
disconnect? My answer: investing in enterprise software and semiconductors is
distinctly not like investing in media and other culture industries. In fact, I
would argue that VCs are in a competence trap – it’s exactly those things that
made them successful at investing in software and chips that make them very unsuccessful at investing in culture.

No question there is some truth to this. Certainly there is a general sense of nervousness about MySpace among many/most venture folks. They chuckle about it, shuffle their feet, and generally act embarrassed, conceding that they’ve spent even less time there than I have. It usually is then passed off as a fad, or a one-off, depending on the mood.

[Update] Here is Danah Boyd on “Why Youth Heart MySpace”. [via BoingBoing]


  1. Michael Robinson says:

    Is there an argument that it is not a one-off?
    I think the evidence is fairly overwhelming that it is.
    As for being a fad, my guess is it will just get stale and commercial and self-justifying, in much the way that MTV did back at the end of the 80’s, but I doubt it’s going to go away anytime soon. It just won’t be any fun anymore.
    Don’t forget, video killed the radio star. MySpace isn’t going back into the bottle.