Question
Why is e-commerce such a hot area in venture capital now?
Answer
For once I have a much shorter answer than most.
E-Commerce is hot because investors smell blood.
As in big-retail blood. As in spilled by swarms of local-brand small businesses thanks to the Groupons, Squares and Etsys of the world. Those SMBs that can swim with the sharks can form locust swarms/piranha schools that can take down big retail, already weakened by the recession and resorting to desperate measures such as pushing Black Friday right into turkey digestion time,
I thinkit was Peter Thiel who recently said it in the most specific way: he's looking for platforms that can aggregate small businesses. Much harder than aggregating consumer eyeballs or Fortune 500 client rosters, but if you can pull it off, you can join in the bloodletting.
I have no investment money to spare, but I am trying to place my own in-kind bets in the e-enabled SMB sector.
And an aside: stop calling it e-commerce. That's a dated term from when Internet enabled sales were just a plus market, garnish on the brick-and-mortar retail pie. Now it's not e-commerce. It's not even social commerce. It is just plain unadorned "commerce" -- the heart and soul of capitalism.
E-Commerce is hot because investors smell blood.
As in big-retail blood. As in spilled by swarms of local-brand small businesses thanks to the Groupons, Squares and Etsys of the world. Those SMBs that can swim with the sharks can form locust swarms/piranha schools that can take down big retail, already weakened by the recession and resorting to desperate measures such as pushing Black Friday right into turkey digestion time,
I thinkit was Peter Thiel who recently said it in the most specific way: he's looking for platforms that can aggregate small businesses. Much harder than aggregating consumer eyeballs or Fortune 500 client rosters, but if you can pull it off, you can join in the bloodletting.
I have no investment money to spare, but I am trying to place my own in-kind bets in the e-enabled SMB sector.
And an aside: stop calling it e-commerce. That's a dated term from when Internet enabled sales were just a plus market, garnish on the brick-and-mortar retail pie. Now it's not e-commerce. It's not even social commerce. It is just plain unadorned "commerce" -- the heart and soul of capitalism.