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.