The Value of Small

One comment I made during my presentation at the Eureka! business plan contest this past December was that “You don’t have to create a Yahoo! to be a successful entrepreneur. There are other paths to follow.”

A few months later, I’m starting to see this idea in different forms, all making the same point: You don’t have to work with world domination in mind. Several recent articles I’ve read have addressed this issue: The first article is from Clay Shirky about situated software and the second discusses Boing Boing. Give them a read and draw your own conclusions.

The Music Industry is getting even greedier…

According to an article in the Wall Street Journal, “All five of the major music companies are discussing ways to boost the price of single-song downloads on hot releases — to anywhere from $1.25 to as much as $2.49.”

Part of the large percentage of music sales on CD is the retailer’s cut. Apple is making razor thin margins selling music, while the music studios are maintaining their margins. Now, they want to increase prices? (not Apple, mind you.)

Ok, let’s assume this is fair. I’m all for supporting artists. So, how do they propose to do this?

“One option under consideration is bundling hit songs with less-desirable tracks.”

That’s exactly why buying a single online is a good idea- you get to separate the wheat from the chaff. Artists should not be rewarded for producing mediocre work. If it’s good, I’ll buy it. If it stinks, I’ll get the single. Bundling as a countermeasure for poor music is revolting and the main reason people prefer to “steal” a single instead of paying $17.95 for one good song and 12 filler tracks.

Here’s another insightful quote: “Revenues in the music industry have been dragging in recent years, in part because of the rise of illegal downloading services.” Plus around a 20% drop in new music released. They kind of forgot to mention that part.

This is amazing. I think I’m going to start illegally acquiring all of my music, and then send the artist a check ranging from $1-$10. Just cut the music industry right out of the picture (like Prince is doing). The music industry makes me that sick…

Hopefully computerized music production will turn the Music Industry on its head shortly. The infrastructure is too large and expensive to support. Take a look at Free Culture by Lawrence Lessig, and read the part about book publishers in London back in the 18th century. Today’s music industry is just as twisted.

VC in the Spotlight

Economist_vcapitalVenture Capital seems to be in the spotlight again. This weeks The Economist has a Special Feature on Venture Capital. This month’s Wired also has The Roots of Bust 2.0, which addresses the overhang out there.

And if the projected numbers are right, the UK is about to be awash in early-stage funding as well. Some concern has already been expressed that there will be too much money chasing too few opportunities. But, in an ever more mature market, it stands to reason that finding truly good investments will be difficult.

This mirrors the broader market, where even Warren Buffett freely admits that it is becoming significantly more difficult to find undervalued companies. Perhaps this means European, or UK, Venture Capital is maturing after having gone through growing pains during the past 4 years.