Friday, 8 June 2012
VC's, Mashable and how it can go horribly wrong.
What is going on at Mashable? Following Pete Cashmore's 200m usd payday from CNN when they bought the blog in February, changes seem to be well afoot and none of them good.
Firstly the number of Ads has well increased creating a cluttered feel rather than the free, bright, cool style of old. Of course, CNN want their money back ("monetise the content" as they dreadfully say) but packing in the ads will drive traffic away rather than generate more revenue.
Secondly, there seems to me, no more "breaking" news and rather rehashed older stories which are well, badly written. Whatever about the writing, because that is subjective I accept, however the typos aren't and just shouldn't be there. Full stop.
It's even making Techcrunch look like it's cutting edge.
There was a great "coolness" ethos about Mashable that seems slowly to be disappearing and it seems too co-incidental to think that it's not related to the sale to CNN. The CNN site itself, suffers hugely from that "pack em in" philosophy using vod above the fold to create streams and therefore, advertising pre-rolls and therefore, money.
Revenue over substance. Short term gain for a long term loss.
To me, this illustrates the issues around VC's and big time traditional investors who scramble to get into Social (thereby, creating a money bubble). They pay high valuations and don't know what to do later. Acquisitions can make sense but if the cultural fit isn't right, they won't and no more so than in this space. And especially if the young turks who started it, take the money and run.
VC's and investors, can destroy your business rather than help it. They're interested in a return on capital solely.
I am 1000% with the digital founders who take the cheques - like P Cashmore - absolutely but there's something worrying about investors ultimately destroying the vibe. Because when they do, they'll destroy it for all. It will just become another "market". Exactly the damage that the Facebook IPO has done to Zynga, LinkedIn and all other businesses in the space. And the glee that smart suited businesspeople tell you about Social not being "all it's cracked up to be, like Facebook".
At the Facebook IPO one investor proudly spouted off to his other VC pals, how he turned 250,000 into 200m. And he did exactly what for Facebook? Loaned them money that he was able to convince others to give him to invest? Hardly inspiring. Hardly creating anything except wealth for a chosen few who had it in the first place. Money follows money.
It's becoming a mad world.
But also.... be VC aware.
If you take the cheque, be prepared to say goodbye to the baby.