Startups jump the shark (and get their own TV show!)

Internet Boom v2.0 might be coming to a close, as consumer- and entertainment-focused startups complain about VC funding drying up. And now there's that TV show. Heaven help us all, that show.

BravoTV Screenshot by Chris Matyszczyk/CNET

In April, Facebook said it would buy the young but fast-growing, photo-sharing service Instagram for a jaw-dropping $1 billion. By early December, consumer and entertainment startups were complaining they were having a hard time finding early-stage funding. So what happened? It would be easy to blame Bravo's nausea-inducing reality TV show for the reversal of startup fortunes, but the reality is something a little less Hollywood: Lack of good ideas, economic fears, and poor returns from many of the startups that have already been funded.

In other words, an investment cycle obsessively focused on consumer-tech startups may have finally run its course. But that doesn't mean startups are suddenly passe. The venture capital community is doubling down on its investments in less-glittery companies trying to solve the problems of big data, cloud computing, and open-source software. Just don't expect Bravo to delve into the details of open-source efforts like Hadoop and Drupal.

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About the author

Jim Kerstetter has been writing about the high-tech industry since the 1990s. He has been a senior editor at PC Week and a Silicon Valley correspondent at BusinessWeek. He is now senior executive editor at CNET News. He moved back to Boston because he missed the Red Sox. E-mail Jim.


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