Amid the buildup to the Facebook IPO, serial entrepreneur Steve Blank was sounding an ominous warning to anyone who would listen.
The headline is provocative, but the meat of the article is much more grounded in reality. I don't think it is social media, per se. That may have run its course, mobile is clearly what's on the rise. While there will be a lot of absorbing the last trend into the first (just as social media on its rise had a lot of "Social Media for X"), what creates value and opportunities in mobile ultimately is still being decided, while social media is a much more known quantity at this stage.
Mr. Blank's primary point, that all the VC money chasing after quickie returns from tech startups, is very important and relevant no matter what the current tech startup fad is. Most tech startups have absurdly low barriers to entry and a lottery ticket appeal for a small chance at huge returns. While investors are rolling the dice on these startups instead of investing in arguably more important, more expensive to get rolling industries, the model is not working.
I think opening up angel investing to a larger pool is a potential solution to this problem. The obvious candidates for funding from a lot of smaller investments are the companies that don't need tons of capital - which right now are tech startups. If angel investors are willing to roll the dice (which they have been, taking away the early investment opportunities and changing the VC investment landscape) it eats into the VC fund's competitive advantage in those industries.
Maybe, just maybe, they will have to go back to investing in industries which need funding for actual research and to overcome the large barriers to entry.
Another possibility is that those VC firms that establish top reputations could use their negotiation leverage to get longer time horizons for their funds.
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