"Social (capital-S) is the fuel of Web 2.0, the so-called “participatory web” (as if ‘the web’ hasn’t always been participatory); it is a critical source of free labor, on which most social media business models depend. When so-called ‘friends’ converse or share content through social media platforms, they support a system that incentivizes other users to log in and participate as well. Each reciprocated and initiated piece of interaction prompts a user’s ‘friends’ to log in and respond, and thereby funnels free labor into an ever-expanding and potentially self-perpetuating supply of value-adding, business-sustaining new content. Critically, these Social interactions also generate the digital traces that make up social media’s Big Data, which many argue is the real product that social media companies produce."
Early homeruns such as these gave the rookie firm an aura that suggested it could do no wrong. And institutional investors stung by a decade of mediocre venture returns were ready to buy the Andreessen Horowitz story. By the time it raised the most recent $1.5 billion fund, Andreessen Horowitz was able to command an almost-unprecedented 30 percent “carry,” according to one of Andreessen Horowitz’s limited partners. (The 30 percent is a maximum on a sliding scale). A venture fund’s “carry,” or “carried interest,” is the share of a fund’s profits the partners get to keep for themselves after they return the initial capital invested, and it is typically only 20 percent. A 30 percent carry is almost obscene. Or rather it would be if the six main partners at Andreessen Horowitz hadn’t recently pledged half of their future venture income to charity. For them, it is not about greed. It is about defying convention.
(via The Andreessen Horowitz Effect | Techonomy)
"Last year, a Silicon Valley investor said: “A pregnant founder/CEO is going to fail her company.” As he contemplated an investment in a company run by a woman pregnant with twins, he thought: “How in the hell is this founder going to lead a team, build a company and change the world for these businesses carrying a kid around for the next few months and then caring for the kids after?"
it would be helpful to escape the echo chamber of Silicon Valley and relocate to New York. Today New York has plenty of startup infrastructure in terms of funding and engineers, but it also has millions of creators and experts and consumers in fields beyond tech.
Dropbox and Github, which you mention as shining examples of ad-alternatives, are great companies that solve real, widespread problems and have real, sustainable business models. But I’m afraid “too many ads on Twitter” or “a slightly too restrictive developer API” are not actual, widely-held problems, and that Kickstarter-type donations aren’t a sustainable business model for a massively scaled social network.
"Digg was an innovator in one important way: It showed the way with an innovative ad system that was truly native to the experience. For all of Digg’s mistakes, it got the ad part mostly correct. Rather than splash the site with IAB units, Digg chose to make its own ads in 2009, determining that the ads themselves should be promoted content from the site. Advertisers were challenged to adapt to Digg’s community, contributing content that they could then pay to have surfaced more prominently. Users could comment on advertiser posts, promote them and bury them. The more an advertisement was Dugg, the less the advertiser had to pay, rewarding those with good content."
"If you’re a woman or a minority (and I have to make the distinction because women now make up the majority of college graduates in this country), it’s much harder to speak up when something occurs to make you feel uncomfortable. Were I in the same situation, I’d be worried that I’d be seen as “oversensitive” or “thin-skinned.” And with good reason."