Venture Capital for Blogging
According to an article on TechCrunch from last night, venture capital funding for bloggers is being handed out like LSD-laced candy on a San Francisco Halloween night. Millions of dollars are going to boosting the valuations of blogs that are, not surprisingly, largely about the tech industry. Mike's suggesting that bloggers taking these
drugs funds are selling themselves short and limiting potentially more valuable opportunities in the future. Instead he proposes a dream team scenario, where TechCrunch teams up with favorite bloggers to build a mega business staged to become the next CNET. Mike's wrong - blogger's who blog about tech and tech business should take the money and run. The space is already over-crowded with smart people who are limited to making me too posts and analyzing the analysis of other bloggers because there simply isn't enough news to go around.
The real problem here is venture capital throwing money at the wrong types of blogs. The blogs getting money are the ones VCs understand - tech and investing blogs. if they want the 10x multiple to pay off, they need to look outside the tech-ecochamber at blogs that are different. Smart money would bet on the same topics that are huge on television (notice tech on television is a joke). Lifestyle topics like gardening, travel, home repair, and food are where a huge percentage of advertising dollars are spent both online and off. These are also areas of wide appeal to 10 of millions of people. If venture capital wants massive ROI, they should be worshiping at the feet of the best bloggers in lifestyle topics, not taking the boring bet on tech. Think Conde Nast not Ziff Davis. Think HGTV and DIY not G4 and CNBC.