A blog post by Fred Wilson, undoubtedly the king of early stage consumer web investing (Twitter, Tumblr, Etsy, Foursqaure, Zynga and Kickstarter), has many folks wringing their hands about consumer Internet investments and extolling the virtues of enterprise or more business focused companies. (It is only a matter of time, before it becomes a fad too, but let’s leave it for another day.)
I am just a little surprised that it has taken people this long to realize that doing a startup in this day and age is a massive problem. It is not just about the money — it is the increased attention diffusion which is a problem. I have been talking about this for a long time. Last year, I wrote about the lack of second chances on the modern, post-mobile Internet.
The economics of attention is much more ruthless and unforgiving than the real economic underpinning of a product. Just as it is hard for a movie to recover from a bad opening weekend, today’s “apps” lose if they don’t make a good first impression.
Today with the increased competition and attention diffusion, it is becoming much harder to be a consumer web startups. And in order to win, the founders need to make all the right bets, all the time, or else they will find themselves on road to nowhere. And that is why I thought that doing a startup in today’s environment was much tougher than most people realize. In December 2011, I told the attendees of Hackfwd in Berlin the same thing. Here is a video of that talk and also, my presentation, that is now on Slideshare.