More Video From paidContent 2012

I'm not feeling well today so instead of fun friday or feature friday, I'm going to post another video from the paidContent 2012 conference. When Mathew Ingram and I got off the stage, the paidContent folks asked us to continue our conversation for a bit longer for the camera back stage.

In this video, we talked about the media investments my prior firm, Flatiron Partners, made in the late 90s and what I learned from them and also the "artist direct" model and what it means for the folks who currently make a living working with artists in the traditional model.


Comments (Archived):

  1. David_Ragone

    Always nice to hear that someone learned from mistakes and is focusing in his/her wheelhouse. Knowing tech, there’s plenty of investments to be had in tech. That’s definitely a great place for you to be working, and I’m sure founders you work with feel the value you are able to add regularly.Thanks for posting the video – hope you feel better soon!

  2. John Best

    Thanks for the video, and I hope you feel better soon.I appreciate the frankness of the admission about Flatiron investing in “anything internet” during that early goldrush-like new digital frontier period. Taking that experience into consideration, and the issues around scaling content direct from producers, would it ever be the case that USV would look to bring someone with that kind of expertise to add to your portfolio? Or is it the case that for the foreseeable future that’s an area you’re not looking to expand into (again)?NB – I’m not necessarily expecting an answer – focus on corpore sano, we can wait for mens sana. 🙂

    1. fredwilson

      i certainly hope we don’t expand into areas we are not already qualified to invest in

      1. John Best

        I was wondering how much that qualification was mutable, I know how important the composition of the portfolio is to you. That you place that importance is enough of an answer!Thanks.

  3. JimHirshfield

    Feel better.

    1. falicon

      I endorse this sentiment.

    2. ShanaC

      Get chicken soup! And tea!

  4. William Mougayar

    You have great chemistry with @mathewi btw.You said: “I’ve never been in the media business.” You’re a blogger, you have a captivated audience. That’s pretty close to a media business.

    1. awaldstein

      Can I quibble with this?TechCrunch/Huffpro are in the media business cause they monitize traffic. One-2-many eyeballs model.avc even the lowly are blogs but monitization isn’t traffic that you sell against. This is an engagement model many-2-many or even few-2-many.Different strokes I think. That’s not media to me.

      1. William Mougayar

        OK from a strict traffic revenue perspective, but not from an audience point of view. The “audience” or readers is what media companies rely on. Blogs have readers. You monetize differently via your consulting. Fred has a little revenue he donates to charity. Maybe the common denominator is the content being produced and the eyeballs that read it. That has “media” in it.

        1. kidmercury

          siding with william in this beef. also, fred has acknowledged that his blog helps him be a VC. gonna go out on a limb here and say USV isn’t on its deathbed financially; if this is true then the blog could conceivably be regarded as strong from a monetization perspective. and that’s in addition to the charity money.

        2. awaldstein

          To both you and @kidmercury:disqusI agree but by this definition everything from porn to car sites to affiliate referrals are media.Business is simply gathering interested people and monetizing their attention. What you gather them around is your product.So…then everything has a media component.What am I missing?

          1. JamesHRH

            @william @kidmercury- a medium is anything that sits between people but allows them to communicate (tin cans & string is a medium). A media business monetizes the time spent with a media property.

          2. leigh

            Agree with you Marshall 🙂

          3. kidmercury

            seems like we all have different definitions of media. my definition: if the main type of people you hire are people who write, take pictures, and make sounds, you’re in the media business. monetization can take many forms, and in fact i think monetization of media businesses and monetization of software businesses will be largely the same.

          4. awaldstein

            Got it.Then a car site that sells through editorial where they write about cars, take pics and video but actually sell cars is in the media biz.I think the example above is in the car business but a car magazine that sells ads is in the media biz.I look at monetization as the determinant.Appreciate your time to explain.

          5. Kasi Viswanathan Agilandam

            Yep. Medium of expression and Media business is taken for a ride i guess.I also am not able to comprehend what @wmoug:disqus and @kidmercury:disqus are pushing.You take your car on business trip from NY to Boston and on the way you open your windows to enjoy some scene and fresh air.You take your car … open the windows go around enjoying the spring and the wind on long-weekend.

        3. Kasi Viswanathan Agilandam

          Either i am not able to comprehend OR I think you are confused between Medium of expression (writing and speaking) and Media business.Every eyeballs that read it has a media in it!!! and that is Media business for you?What do you say about big ad by Pepsi or Coco Cola on the way to your airport … it also has few eyeballs rolling … so they are into media business is it?Blogging is not media business … but there are blogs which are into media business.A guy speaking with a microphone and speaker to gather crowd to OWS is like blogging (with voice media) … the guy on the radio station talking about this instance where someone is trying to gather a crowd to OWS is a media business.

          1. leigh

            i actually think your differentiation on the difference between the two types of media is dead on (specially audience vs. tribe) —

      2. ShanaC

        Then what is the second group and how do you monetize?

        1. awaldstein

          Not sure I understand the question Shana. Can you clarify please?

          1. ShanaC

            the many to many model – how does that really look in detail, and then how do you monetize it.

          2. awaldstein

            Blogs at their best are many-to-many or few-to-many models. Conversational and comment based.Many ways to monetize from media to lead gen to information gathering Huge topic as big as business itself.

    2. Kasi Viswanathan Agilandam

      There is a thin line … blog is like personal media. Media is about audience and blog is about tribe … the size is different and intentions are different.

  5. Cam MacRae

    Flash seems to get worse with each successive release – this video doesn’t progress past a black screen. Pity, because the last video was fantastic.

    1. Guest

      Flash is still releasing new versions? I thought that all went bye bye when HTML5 came out?

      1. Cam MacRae

        Prompted me for a “critical” upgrade a few days ago. Well worth having to close all my browsers :/

      2. testtest

        checkout the video link above EWS

      3. testtest…user support at 80% for HTML5 video. could be the same as flash next year based on past growth

    2. William Mougayar

      This is weird. This time, I got a black screen on the Mac, but I was able to play it on the iPhone. It was the exact opposite last time.

      1. Cam MacRae

        Oh! I didn’t even think to try the iPhone because… FLASH.

  6. Conrad Ross Schulman

    “futures market for what people want” this is a very interesting concept because it’s removing the equity aspect entirely from the VC funding process. For the first time, the consumers are both consumers and investors. The success of the funding is based on product-demand. Now that is disruptive!

    1. fredwilson

      yes it is

    2. Kasi Viswanathan Agilandam

      That is where the overlap of Amway thingy coming in … probably i am not getting the actual benefit through my Homer Simpson’s brain.

    3. ShanaC

      How would you develop this market – as odd as it sounds, futures markets seem to be predictions about the past as much as the future.

    4. Richard

      There are a few wholes to the futures analogy. see my comments below if interested.

    5. William Mougayar

      But has there been VC-led follow-ons for companies that got started on Kickstarter?I think Kickstarter could have a separate stream focused on crowd-funding companies VC-style, and if they linked up seamlessly with Angel List, that would be even more disruptive.

  7. Guest

    The crowdfunding thing is very exciting. It’s great to see that people can invest directly in startups. I wonder how that will impact 401Ks. Will people start pulling out of those so they can have better control by investing directly in startups where they can be involved with driving the growth of a company?

    1. Brandon Marker

      SDIRAs are being used to participate. The main consideration, obviously, is the risky nature of the investment. Only a small % should be used. It will be interesting to see how the SEC will patrol this part of the JOBS act, and every other, ha.

  8. Ben LeBlanc

    I like the analogy of Kickstarter to a futures market. It’s fascinating what can happen with this ‘artist direct’ model. Makes me think of how many great ideas and talents were quashed back in the day by the major music labels and movie studios. I bet we missed out on some great stuff.

    1. Richard

      Actually, for many reasons the futures analogy somewhat flawed. Futures contracts are designed to either hedge/insure a in the future (an airline going long oil futures) or to allow for speculation about the future price of a commodity. Futures sounds like it makes sense, but Kickstarter is something different.

      1. Cam MacRae

        Not to mention that the seller is by definition short – not exactly what you want to see from an entrepreneur you’re investing in!

      2. Ben LeBlanc

        Sure, it’s not a perfect analogy, but it still has merits. Futures are great for hedging and insuring, but that’s not their sole purpose. If you need a certain good at a specific time in the future and you think that price will go up, you can buy a contract to lock in a price today.

  9. Matt A. Myers

    Feel better. Oil of oregano with juice three times per day and lots of rest for you! 🙂

    1. ShanaC

      hmm, what is this about oil of oregano?

      1. Matt A. Myers

        It’s a natural anti-viral, anti-bacterial, anti-parasitic, anti-fungal. It works real good. 😉

  10. Kirsten Lambertsen

    You two seem to have a great rapport. That was very enjoyable to watch. Took me down memory lane mentioning GeoCities (I was at XOOM).

  11. kidmercury

    a few thoughts:1. hope you feel better. if this continues perhaps we can replace fun friday with sad friday? something to think about.2. dear world, please solve the transcript problem. i’d like for transcripts to magically appear so i don’t have to watch the video. has to be easy for all parties involved.3. i’m a big believer in media businesses. they are the gas stations of the internet: opportunities for recurring customers, low startup cost, only need a few employees, if designed properly they are conducive to recurring micro-transactions, and the way you scale is by growing one at a time that are positioned in nearby neighborhoods. i’m trying to convince my indian family members of this but they see neither the opportunity nor the joke. i remain undeterred.4. YES! you totally nailed the new model for venture capital; crowdfunding + network effects with portfolio. i’m glad you see it fred, please do it. i’m ready to sign you a check for several HUNDRED dollars!!!! lol

    1. CJ

      Hey Kid, can you elaborate on #3. I feel like I’m missing something.

      1. kidmercury

        gladly! think of how a blog works:1. only a few employees2. they sell ads, affiliate revenue, digital downloads, private forums/elite membership.3. blogs are great for recurring visitors. the same people come daily. as such, the same people are being monetized repeatedly. 4. it’s easiest to scale when you move to a related vertical. for instance, gigaom writes about startup stuff but also about cleantech. both cleantech and startup stuff have similar sources of capital and have VC funds that operate in both sectors. so, this enables them to leverage their contacts more, and possibly their whole network think of how gas stations work:1. only need a few employees to run them2. they mainly sell gas, but they also sell junk food and newspapers. so there are a few revenue streams. 3. great for recurring visitors. people go to the same gas station over and over again. 4. i have a cousin who owns a bunch of gas stations. he has the same delivery guy drop off all the junk food to all his stations. since he buys in bulk from the same delivery guy, he gets a better deal. this means higher margins for him and lower costs for customers, which ultimately means more revenue and more profits. i think he makes more on junk food than on selling gas.basically, i think gas stations and blogs are both businesses where it is all about monetizing a small group of recurring visitors. i think the market caps will also be similar; my cousin, while he’s doing well, isn’t exactly bringing in facebook-style market capitalization (many zeroes shy, even as facebook share price continues to tank). i think the same will be true for most pro bloggers.

        1. LE

          “3. great for recurring visitors. people go to the same gas station over and over again. “First I love real life examples like this.But I don’t really see a big connection between the two businesses. A gas station is a great immigrant business. Takes street smarts as opposed to formal education. (Like a c-store or liquor store etc.).It’s fairly straightforward to value a gas station (and in fact I just forked and looked into that after reading what you wrote.) So it sells for a multiple of earnings basically.A gas station is predictable stream of revenue. I mean you have your traffic and unless some major road is being built which will siphon off that traffic or there is road construction (both can be checked before purchase in town records and by consulting the appropriate people), or some big hurricane that closes the town, I would think that your stream is somewhat secure. And of course you could always hedge for things like oil pricing and/or economic issues that would cause demand to fluctuate.A gas station also has cash coming in. And typically much of that can and will go under the table. Everything that comes in a blog is reportable income.The labor that runs a gas station is of course of a different caliber than needed to operate a blog.And the customers are not leaving for the next shiny ball.Keep in mind that one of the big advantages old media had (newspapers) was the barrier to entry as well as distribution. (My ex wife operated a coupon book and a major advantage she had was that she locked up distribution at the major college bookstore and kept it by flirting with the manager. When she bought the business that was the thing we evaluated that blocked others from easily stealing her advertisers). A gas station has this type of barrier to entry. While not impossible to see a new one open up you would have to agree that it would be fairly easy for a new blog to open up or a current blog to loose readership.

          1. LE

            @kidmercury:disqusI said “And of course you could always hedge for things like oil pricing and/or economic issues that would cause demand to fluctuate.”I actually think this is an opportunity for you. To provide hedging services to people who don’t currently use or understand how to hedge risks in their small business. Not everyone has a staff like an airline to hedge fuel prices. An internet site that directly allows a small business owner to hedge economic risks and directly markets to those people seems like a viable idea.

          2. kidmercury

            i think blogs will have stable revenue streams. for isntance i bet revenue from TC, gigaom, etc are fairly stable. i also think there are community effects that lock in users to get them coming back again and again. for instance what are the odds that fred loses all his readers tomorrow. i bet he could even do a blog post cursing us all and telling us to never come back and he would still have people coming back just out of habit and to talk to the regulars they usually talk to.

          3. LE

            Well one thing you have to realize is that people are creatures of habit and there is the time factor as well. We’re not talking about being able to do multiple things because it’s not a money issue it’s a time issue.I’ve mentioned before how I was told by a Starbucks manager that when the renovate a location they try to avoid at all costs closing the location for X time period. Because what they have found is that people will then find another place in the morning and break the habit of getting their coffee or breakfast sandwich.An example is my behavior. I go to Starbucks every day and take out my drink. But I used to sit in the AM at Starbucks everyday without fail with the laptop. Something caused me to break that habit and I no longer do that.Back to blogs. What I read on the net is what I read. One day Fred mentioned HN and I started to read that. The time I spend on HN is time I don’t spend elsewhere. So someone lost my pageviews, right?(TC I rarely read anymore since Arrington left.)

          4. CJ

            Accumulating…reputation, I think that’s the right word, is hard fought and hard lost. It takes more than competition to do it. Competition won’t sway me away from techcrunch, but what did sway me away was losing their reputation. In this case it was because their reputation went when all their bloggers left.

        2. CJ

          Makes total sense now. I think you’re spot on too.

    2. andyidsinga

      [re #2] or just add a 2x or 3x button so it can be watched faster 🙂 …kind of like what they do with audio in the voxer app…. love that feature!

    3. fredwilson

      I am taking it easy today. Feeling a bit better. Thanks

  12. Andy

    Anything that cuts out the fat is for the best. I’m a huge fan of individuals like Louis C.K. going directly to the public with their acts.

  13. Tom Labus

    A weekly show at least for you two!!!Go to the beach!

  14. andyidsinga

    very cool – especially the parts about artist direct.

  15. laurie kalmanson

    the internet made media pretty much’s exactly the opposite of how it used to olden days, the competition for audience was a limited set.

  16. JamesHRH


  17. ShanaC

    How do you deal with the media at scale problem (hyperlocal issue) I mean, I do think had a point in aggregation, but I don’ think their definition of local was a good one.

  18. invisible man

    Fred: Sorry you are not feeling well. After looking at your daily routine I would suggest you get more rest. If I was your doctor I’d be yelling at you for waking up at 5am! Also, one day a week should be reserved for rest. (Not suggesting you have this – I wouldn’t know) but, as a bartender you may have heard about Beriberi – sometimes hard liquor can produce a thiamine (vitamin B1) deficiency. People can’t sleep well so they get tired and crabby… But, whatever is ailing you – hope get well soon!!!Here’s an interesting link about writing but people also use it to help them get a better nights sleep.

    1. fredwilson

      Thanks for your comments. I am not much for hard liquor. I do like beer and wine

      1. Carl Rahn Griffith

        Speedy recovery.

  19. Andrew Hoydich

    from 6:10 and on is truth being told and is incredibly inspirational. it’s easy to get used to something one way and to do things to stop it from changing, but once you enter that mindset you immediately process information differently. If you can find the right balance of association/disassociation then you become a free spirit not bound to any idea but able to aid and influence the direction of ideas that you see value in.feel better Fred!

    1. fredwilson


  20. bsoist

    Get some rest and feel better. Thanks for the video.

  21. Alex Hammer

    I hope you’re feeling better soon. You’re the best.

  22. Alex Hammer

    It’s fascinating the Kickstarter VC model you are talking about. A little here, a little there, serving as curator, etc.

  23. Robert Thuston

    Good stuff. Carlotta Perez’s thinking is becoming realized.[Change: it’s Ronald Coase who has “The Nature of the Firm” theory, which rings a bell with this interview]

  24. Guest

    I don’t get your meaning. Would you explain?

  25. Guest

    Never mind. I did a search and there is a place called Noodletown in NY.