What 2 of the best Venture capitalists are saying on the future of the Internet ?

http://www.youtube.com/watch?v=nBvuirDPHKA&feature=player_embedded

Last week, 2 of the best Tech VC (venture capitalist) gave their perspective on the Internet for the Web 2.0 Techcrunch summit.  John Doerr of Kleiner Perkins, the man behind the success of Netscape, Facebook and Google just to name a few; and Fred Wilson of Union Square Ventures who made the deal of Zynga made very interesting remarks on the future of the Internet.

For Wilson, we are in the middle of a second Internet stock market bubble.  I agree with him, but I think we are at the beginning (see post http://infocomanalysis.blogspot.com/2010/10/are-we-entering-in-second-internet.html). For Doerr we are just in a boom period of a third waves of value creation and innovation about Internet.  For Wilson, tech VC firms are seeing a lot of firms which copy the strategy of others.  Thus, there are a lot right now of "Me too" business models.  For instance, a lot of firms try to copy the success of  Groupon in local daily social networks deals.  It is similar to what happened in telephony in the 1990's where CLECS (Competitive Local Exchanges Carriers) had almost all the same strategy and business models.  The vast majority went in bankruptcy following the burst of the 2000 tech stock bubble.

According to Wilson only 10% of firms in a VC portfolio should go public, the best ones only.  The rest  should try to sell  to others firms.

For Doerr, the Silicon Valley is still the place where important Internet platforms still emerge and grow.  For him, it has never been a better time to start a tech firm than today.  Valuations are high and VC money is largely available.

For Wilson, a very hot sector right now is the combination between mobile and social networks.  One can think of the potential of Twitter and Groupon for instance in this sector.  He adds that Android will become the dominant platform on mobile because of its open standard platform versus Apple and Research in Motion (RIM and its Blackberry).  Application developpers can create more easily value on this platform.  Wilson proposes that Apple is like the "cable providers" business model of mobile Internet.

Doerr suggests that Facebook, is the strongest firm on execution of the Internet with Google, Apple, and Amazon.

Wilson suggests that Facebook did not create much innovation.  Furthermore, the only complementor of its platform, which created a lot of value is Zynga. He also suggests that Google is the best tech acquirer since a decade.

John Doerr had the final word.  He cited Colin Powell who said: "Innovation without execution is hallucination".

Louis Rhéaume
Infocom Intelligence
louis@infocomintelligence.com