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.
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.