Worth reading piece by Gilman Louie at Alsop Louie on what he calls the “Web 2.0” myth. While I mostly agree, I think it’s also somewhat over-general in a rapidly-changing media market, not to mention having a whiff of post-YouTube apologia to it. Would he feel the same way in Sequoia’s place?
We see a lot of Web 2.0 pitches from young entrepreneurs. The basic pitch: for an investment of $2 to $5 million, they can build a company that Google, Yahoo or Microsoft will buy. And, in under two years, we
can get 5-10 times our money back. How could you not like that?!
We donâ€™t. We always decline to participate in deals like that. We think this is a kind of disease, often caught by these youngsters in business school. They are looking to cash in on Web 2.0 fever and flip their companies quickly for a nice tidy sum.
These entrepreneurs confuse a feature for a company.