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Fred Wilson on Venture Capitalism

Venture Capitalism has caught its second wind, says Fred Wilson.

Pickup this months Business 2.0 for a great feature on esteemed VC Fred Wilson.

Regulars of Catablast! know we link to Fred often.

Fred is enlightening and right on the dot.

com.

Which he claims was resuscitated in 2003.

So while the US was waging war on Afghanistan, entrepreneurs back East were molding radical ideas into viable business plans.

And into the arms of Fred's new VC firm --Union Square Ventures -- they went.

But this time around, Fred was a bit more prudent with who he decided to chaperone.

Unlike his previous firm -- FlatIron -- where hundreds of millions were raised in a blink of an eye, before USV was formed, Fred and Co fell into an existential swoon, mulling over what it meant to be a internet-dependent consumer in the 21st century.

...he and Burnham spent nine months reading academic works (including economist Carlota Perez's Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages), analyzing case studies, writing think pieces. "We did it to convince ourselves that it made sense to raise a fund," Wilson tells me. "We needed to be sure there was still a role for venture capital."

They developed what Wilson calls a "thesis" about where the industry is headed. "The reality is that core technology investing -- everything from chips to enterprise software to communications equipment, all the stuff that big companies buy -- has been on the wane for five to 10 years," Wilson says. "So what's the next wave? The next wave is what we're calling applied technology. The Internet is a computing platform built on top of core technology. Applied technology is what gets built on top of that: It's Web services."

Aps ontop of aps layering another set of aps.

This is going to be huge.

I guess it already is.

If I understand Fred correctly, this time around it is not so much about dynamic new products, but about integrated services that redefine the plethora of end-user friendly products already out there.

The internet, which converges media, marketing, and financial industries into a seamless whole, dictates everything we do.

Consumer choices, social networking, the knoweldge process -- the internet has jurisdiction over all of these.

So Fred, hats off to you.

Break on through to the other side.

posted by Catablast! Media Group @ 7:46 AM