[iDC] Will you delete your Feedburner account?

Burak Arikan arikan at media.mit.edu
Mon Jun 11 23:30:05 EDT 2007

I think understanding how venture capitals operate would be helpful  
to this discussion.

Marc Andreessen recently started a blog and posted a series of  
articles about how venture capital firms operate and how they  
function in a broader sense. I didn't know that large university  
endowments and philanthropic foundations are the major investors in  
the venture capital cycle.

The truth about venture capitalists, Part 1

The truth about venture capitalists, Part 2

The truth about venture capitalists, Part 3

I also added my comment to the last article. I post it here again  
because i wrote the comment with the motivation i got from the recent  
IDC discussions we have here.

- - -

These three posts are mind opening in many dimensions. In this broad  
spectrum of relationships I am wondering about the connection between  
the users of social web 2.0 services and the venture capitalists who  
help these companies grow.

We recently see more web 2.0 startups backed with venture capitals.  
These social web 2.0 companies' profit is driven by users' immaterial  
labor, from aggregated social connections to uploading videos. Users  
invest time and attention without getting paid. They get free and  
"improved" services. How much the service is improved (aka  
incorporating the collective intelligence) and what is really free  
are controversial. Although the generated value is mutual, it is  
solely evaluated by the service provider. For example, Facebook wants  
to know how am I connected to my friend, so that this can be a value  
for marketing operations. What the service provider earns from these  
connections is never open to users who are aggressively asked to be  
open (share) in such systems.

The startup company exits, the aggregated user data change hands[*],  
and venture capitals make profit. So on the one hand venture capitals  
and their limited partners invest in this process of exploiting  
people's immaterial labor, on the other hand, as these three posts  
say, venture capitals help companies develop technologies for the  
society. I find this paradoxical. I wonder what you think?

- - -


On Jun 11, 2007, at 3:26 AM, Geert Lovink wrote:

>> Changing the rules is easy. Changing Entrepreneurs is easy too:  
>> simply change the customer and the entrepreneur will follow. That  
>> is what Entrepreneurs do: satisfy customer demand. Can you change  
>> customer demand?
> Throughout your postings you confuse users and customers. That's  
> the core problem since 1992 when the Internet opened up. Users are  
> an odd new category, half producers, half consumers, or some mix of  
> them. They do not go to MySpace to buy a product. We all know that.  
> What's not understood here is the element of the social. Of couse  
> the social can be commodified, but as a model of explanation what's  
> actually happening online the economic reading is a poor one.
> And sorry about the confusion between IPO and sell out. With sell  
> out I mean selling your company and getting out completely after a  
> while. This is what mostly happens. Of course Microsoft, Google and  
> Yahoo have gone public but the founders did not sell out and left  
> the scene. Quite the opposite, they are still in control.
>> Conclusion: what we are doing here is debating the rules of the  
>> game. And that is great. Rules should be challenged, broken en  
>> revised all the time. My idea is that you don't need extra rules  
>> (not less either, don't get me wrong) to protect the customer.  
>> They don't want it and they don't need it. They have the biggest  
>> stick to hit any business with: They can simply choose not to be a  
>> customer anymore.
>> This is something that every business-owner, small or big, fears  
>> the most.
> And that's why it is so good to call for a feedburner boycot all  
> together. Let's punish the founders for selling their company to  
> Google. Many feel that Google is rapidly becoming way too powerful.  
> Why support yet another monopolist? Why can't feeburner thrive as  
> an idendepent company? The very logic that there is some natural  
> law that they have to sell out or IPO NOW has to be challenged.  
> This hasty behaviour is silly. The notion that there was no time  
> has been the most ridicuous element of the dotcom religion. If you  
> want to criticize 'hype' you have to start with criticizing the  
> very notion that companies 'have no time'. This only creates  
> imaginary frontiers that do not exist.
> Geert
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