I just read Dave Winer’s essay on the future of the venture capital industry.

Ditto. Great insight. One thing before I start thinking, I always thought it was bizarre that entrepreneurs couldn’t get funded when they needed it (when the economy sucked and they needed a little revenue to get them through the rough patch). Anyway…

…then I started thinking. Yeah, I know, that’s dangerous.

What are the “ventures” the entrepreneurs actually need?

See, in the 1980s, they needed money. Why? Cause the growth was in computers and other electronics goods. I worked on an assembly line at Hewlett Packard one summer in the early 1980s. Why did these (and smaller startups like Apple or Atari back in the early 80s) need money? Cause building physical machines costs money. Assembly lines. People. Materials. There was a high marginal cost of goods.

But today’s world isn’t money constrained. You don’t need much money to build software or services.

Today’s world is mostly an audience aggregation one. At least that’s where the money is. Think about it. What does Google do? Gather audiences! How about Yahoo’s Flickr? Or Microsoft’s Live.com? (More on that in the next post about guitarist Robert Fripp, don’t miss that one).

So, if money isn’t in short supply (it’s not, which is why being a venture capitalist right now is actually very tough work) what is? Here’s some ideas of “ventures” that we need:

1) Venture USERS. How do you build a Flickr? Get half a million users. But how do you get there? After all, there are hundreds of services vying for our attention right now. So, anyone who can provide a network of users is going to be valued. Got a network of users that listen to you? You’ll be sought after.

2) Venture Search Juicers. If you are an audience starved startup how do you exist if you aren’t in the first page of Google results for what you want to be known for? So, how do you get there? You gotta get people who have search engine juice to link to you. You need “Venture SJ’s” (for search juicers) to be in your network. You think you can just get a few bloggers to link to you? That’s increasingly going to be difficult. Wanna come and look at my “blog this” folder? It has 2321 items in it. So, how you gonna get noticed in that kind of world?

3) Venture advertising. You’re in the audience aggregation business now, remember? How do you get an audience? Well, you won’t get one if no one has heard of you. So, if you can advertise services (say, if you’re particularly talented in front of a video camera, like, Amanda Congdon of Rocketboom) you’ll be sought after.

4) Venture offices and IT. If you’re a geek who can build cool things in Ruby on Rails what’s the last thing you want to worry about? Having an office in which to work and all that entails (stocking the frige, answering the email and phones, paying the bills). Got a way to bring those services to a number of startups for less than anyone else? (I saw such an operation working in a house on Sand Hill Road) Then you’ll be sought after.

5) Venture deep technical help. Let’s be honest. The skills to get a prototype service up and working are far different than making it work for 10 million users. Building UI’s in Ruby on Rails is a lot easier than building a server farm that can handle exponentially-growing loads. So, can you build a network where you share one tech team among a group of startups? Then you’ll add value to the whole network and be sought after. I saw just this happening at startups in Silicon Valley where one deeply-skilled tech guy was shared among three or four startups.

6) Venture marketing. Hey, every entrepreneur needs a logo, business cards, stickers and swag to hand out at shows, and other things. But, you don’t need a full-time graphic artist. So, the new Venture capitalist who has a graphic designer shared among his or her network will add value and be sought after. At Microsoft I’m really a “venture marketer.” Every team doesn’t need a guy who can get 100,000 views on a video shot with a camcorder. So, I’m shared among many teams. Same skill is gonna be needed at every startup (but only an hour at a time).

7) Venture ideas. I’ve hung around the industry now to realize that there are a few people who generate far better and far more ideas than anyone else. Microsoft has one of those guys. His name is Eric Horvitz. He owns the most patents at Microsoft and I believe he has about twice the number of the person who is in the #2 spot. Now, you probably couldn’t afford him full time (I’m sure that other multi-billion-dollar companies even regularly bid against us for his time) but you might be able to, say, rent Dave Winer or Steve Wozniak or, even, Matt Mullenweg, to come out and give you some ideas for a day. So, “venture IG’s” (Idea Generators) will be sought after.

Venture PR. I remember the days when startups would need to hire a PR company for something like $15,000 per month (and that was for a low-cost set of services, some services would run many times higher than that and often required handing over some of your equity to get really great services). But, in today’s world of blogs the skills needed aren’t as big. You need someone who can deal with the new PR (even the big companies are realizing this, Nokia has a program to send phones out to bloggers so they can try them out). Get a new set of PR skills which can help you build an audience fast and you’ll be sought after.

9) Venture testers. You just spent four years at Carnegie Mellon coming up with a great robotic or speech recognition idea. But now you need testers and other people to help you finish off your project. The network that can help you with those will be sought after.

10) Venture management. You’re two kids from Stanford. You’ve built a team of 20 geeks. Some in SF, some in London or Cork, some in China. But just keeping 20 people working together is not your core skill and it’s making you unhappy. So, you need some really great managers to help you out. The network that can help you will be sought after.

11) Venture evangelists. Hey, I’ll be honest, when I see something that excites me I want to have a piece of the company. It makes me even more evangelistic if I know my own bucks are on the line. Ahh, sorry, Dave Winer already made that point. So, I guess I should have stopped at 10 “ventures” that are needed.

You got any others? If you’re an entrepreneur, which ones are you willing to give up some equity to get?

Hey, Brady, what’s up with inviting anti-Microsoft folks into Search Champs? Folks like Ted Leung who is working on the open source Chandler calendaring application. Or Emily Chang?

Oh, I think Emily Chang covers it pretty well on her post (and she has a list of all the Search Champs, darn interesting blog reading there).

I love this new trend of listening to people who’ve fired us (or who are trying to compete with us). There’s more post-search-champs-meeting talk on Memorandum.

Oh, I like Ted and his family a lot. He’s one of the nicest guys I’ve met. Damn smart, too. I wish I could hire him.

Turns out in the past hour I’ve met strategists from eBay, Yahoo, Amazon. They are here to see the small ideas. Some of them are pretty cool.

Here’s my favorites of what I saw at the Entrepreneur 27 event that just concluded at Stanford University.

Flagr. Take a cell phone. With a camera preferably. Walk into a sushi restaurant. Take a picture of the front, of the menu. Of the food. Write a little review. Send it to Flagr. It puts it on top of a Google map. Very cool. Limited window to make money, though. This is too big an idea to be ignored by Google/Yahoo/Microsoft for long. In the meantime Flagr is it. Here’s a photo of the Flagr team with TechCrunch’s Michael Arrington.

Skobee. No, this isn’t named after me. Heh. But, let’s say you want to find something to do tonight. So you email your five friends asking what’s up. That all causes a flurry of email. But, while that flurry of email is going on Skobee is listening in and is keeping track of what you’re talking about and builds a site for you automatically (and, if you’re clueless, it helps you find something fun to do).

Billmonk. When Buzz and Doc and I shared a room Buzz picked up the hotel room and he said “you owe me some money when you get your expenses back.” Turns out Doc owes him money too. How do you keep track of situations like that? Billmonk. And you can do it from your cell phone. Text 60×3 to Billmonk and it’ll automatically create an entry that says your friends owe you $20 each.

LicketyShip. When Robert Pazornik, co-founder of LicketyShip was hanging out with his buddies in Yale they wondered why they couldn’t apply small-idea thinking to the shipping business. FedEx and UPS had done the big idea (moving boxes around by shipping through a hub). But they were at their local computer store one day wondering why they couldn’t move a box of toner down the street in a few hours. LicketyShip is their answer. They found that in certain areas they can use existing courier networks and a smart database of their locations to ship packages across town in less than two hours. The eBay and Amazon strategians were first to visit their table, they have an impressive small idea.

Box.net. Ever want to email a 200MB video file to someone? I have. Yeah, I’m an edge case but there are other reasons you’ll need online storage. Backup. Moving servers. And such. Box.net is the answer. They have a cool gadget for the Google online page (I’m trying to get them to build one for Live.com) too so you can play with your server-based files while you check the weather.

I met Michael Arrington of TechCrunch there too. He says he’ll have a review up shortly of the event (update, it’s up). I said “I’ll stay here and beat you.”

I love the valley!

So, I’m hanging out with Patrick this weekend. Just got done interviewing the MSNTV team who built the cool Media-Center controlling gadget that was shown earlier this week at the Search Champs meeting (got lots of kudos). How did I start the meeting? “I thought it was against Microsoft rules to work on weekends?” Another good channnel9 video in the bag.

Anyway, now we’re hanging out at Stanford University where a bunch of young entrepreneurs are showing off their small ideas at the Entrepreneur 27 tech symposium. Aaron Levie, CEO of Box.net (an online storage service) is up in front of the room (some pictures will be up shortly on my Flickr feed).

Want to be the first on the block to try a new technology or Web service? This is a great place to start.

I love little meetings like this. It’s why Silicon Valley continues to bring the world more than its fair share of new ideas and new businesses. Will one of these companies get big? We’ll see.

One of them already is. Noah Kagen of Facebook is here.

You can tell it’s Patrick and me. Patrick has a white computer. I have a black Tablet PC.

Dave Luebbert brought his Mac to the geek dinner we held on Thursday night (about 40 people showed up). Why did he do that? So he could compose a song right in front of me during the geek dinner.

Hey, yesterday was Mozart’s birthday so this is fitting.

Anyway, what is SongTrellis. It’s a program that looks like a sheet of music. Dave was able to use it to draw out notes and play them back. Or, he could have the computer come up with some notes of its own and he could play them back, delete them if not appropriate, try again. Manually manipulate them. I could see how, if in the hands of someone with musical talent, this could be used to build music very quickly.

Yet another digital lifestyle story. Sorry, this one is for the Mac only. But then if you knew Dave you’d know that to be the case (he was on the first Word for Macintosh teams at Microsoft and has since left Microsoft to work on stuff like SongTrellis).

Very cool app! I’m gonna get Patrick (my 12-year-old son) to try it out. In free beta now, but he expects to charge less than $100 for the completed software.

Oh, and Patrick says thanks to the Mac/Office team who sent him a copy of Mac Office and Virtual PC for his Mac. He’s sitting on the couch right now playing with Windows on his Mac. Ahh, maybe he’ll come back around to the dark side of the force!

It’s funny, but this is the second time I’ve arranged a dinner for Jim Allchin that I haven’t been able to attend. The dinner was last night and I hear it was a real interesting one.

Why? Cause I got a diverse set of people in to meet with Jim. Not just fanboys. Well, not unless you call a developer of the open source browser Flock a Microsoft fanboy. Or, if you call Mena Trott, founder of Six Apart (which is hosted on Linux) a Microsoft fanboy. Heh, that’s pretty funny!

Beth Goza of Linden Labs was there. Tara Hunt of Riya. John Tokash of Homestead Technologies. Tony Gentile of Healthline. And Phillip Torrone of Make Magazine.

John Tokash’s report is here.
Tara Hunt’s report is here.
Thomas Hawk’s report is here. Great photos too (Thomas is quite talented with his camera, I love his blog lately mostly because of his photos).

How did I pick these people? They are people I’d want to have dinner with myself! I think it’s funny that Tara felt out of place at the beginning. I hear she gave Allchin a good dose of her thoughts on DRM. Sounds exactly why she was invited! (I knew she’d do that, cause she has always been interesting to talk with when I’ve met her).

Nice to see the new MSN Spaces. I’ll ask Maryam what she thinks. Dare Obasanjo (who works on that team) links to the relevant details.

Most people don’t know who Dare’s dad is, by the way. His dad is the president of Nigeria. The other day Dare’s dad joked around with Bill Gates at Davos.

Microsoft’s new VP of HR, Lisa Brummel is on Channel 9 (Jennifer Ritzinger and Charles Torre interview her). She is just the coolest person. That’s what leadership looks like. Take on the tough issues head on. My coworkers have gone to her “listening tour” and have come away impressed. She asked bloggers to “be productive” when criticizing. Totally agree. Yesterday I was talking with some Search Champs about corporate blogging (they are trying to figure out how to improve their own companies). I told them that they should take risks, but always have a goal in mind that you can communicate to other people. Many of the people fired for blogging, when I’ve talked with them afterward, had no good reason to mouth off. No goal that they were trying to push the company toward.

I was talking with David Anderson (our Agile blogger) and Martin Geddes (who writes the awesome Telepocalypse blog about the telecom industry — they both used to work for Sprint together) about changes they tried to implement at Sprint and how tough that was. Martin now is a consultant and we talked about the problems Microsoft is facing and how we’d like to use our blogs to help change.

Me? I’m refocusing on small things internally (small teams that are kicking ass) and pointing outward to cool stuff elsewhere. I’ve noticed that is the behavior that most helps my goal. What’s my goal? I’m a geek and want cool new technologies that make my life better.

For example, early this morning I woke up and talked with Adomo CEO Jeff Snider and SVP Andy Feit. They have a really interesting phone system for corporations. Most people when I show them the features we have at Microsoft say “I wish my company had those.” Things like when you call our main switchboard number you can just say my name and you’ll get put right through to me without waiting for a human to pick up. Or, if you hit my voice mail box it records your voice mail and sends that to me as email (which I can then get on my phone). Really cool stuff. Anyway, Adomo does the same thing for companies. They sell a box that you put in your telecom closet that gives you all those features and more.

Is Memeorandum making us stupider? That’s the point that Bubblegeneration makes today.

I think there’s something to that. But my thing is that I notice my life is being split up into many more tiny little slices than before. First of all my email load is just going nuts. More than 200 per day that I ANSWER (and many times that that I read, but don’t require an answer). Plus, feeds. Plus Digg. Plus plus plus plus.

So, I don’t spend much time on one thing. Overall I’m getting more knowledge and breadth, but on a granular level I’m not mastering anything. That trend scares me.

But, I’m getting back at all of you. Here’s some quick hits.

Microsoft just announced financials. Here’s a Reuters’ article. I always watch the financials of the company I work for. That’s something that Jim Fawcette taught all of his employees to do (even taught us what EBITDA is). That’s one thing I always appreciated about how he ran the business.

We just put up a video about Server 2003 R2 and Longhorn Server. I learned a lot about server technology in the interview.

This morning I attended the Search Champs meeting again where Gary Flake and Microsoft announced Live Labs. Richard MacManus has the details. He says “Microsoft is entering into a fascinating Internet-driven software era and - to my eyes - they are meeting the challenges head-on.” Gary Flake rocks, though. I wanna interview him about his speech. More from Frederico Oliveira (he has links to Gary’s slides). Memeorandum is tracking conversation on the new Live Labs.

The Search Champs did a podcast last night about the privacy and grilled Microsoft search team members some more and talked about what they learned during the day. Joshua Porter of the bokardo blog has all the links and details. Hot issue. Transparency in action. More to come! There’s a lot more on the “Search Champs” page on Technorati. Even more blogs are being tracked by Memeorandum on this issue.

I LLLLLOOOOOOVVVVVVEEEEEE the new Technorati home page. Very nice!

Digg is NOT being acquired (that’s on Kevin Rose’s blog, he is the founder of Digg so is worth listening to). I’m so glad I missed on this round of blog rumors. A few of the search champs told me they were sick of hearing rumors on blogs.

Over on Memeorandum (heh) I see that Mike Nash of Microsoft’s security team is putting his neck on the line over on Slashdot and people are noticing that. I love it!

Note to Doc Searls, Rick Segal keeps showing up in my life too. He was at Naked Conversations launch party on Saturday night. His ideas ARE revolutionary. Will VC ever be the same? We’ll find out this year.

Aside: Michael Lehman told me tomorrow he’s turning off his network connection tomorrow just to get work done. That just might be what it takes. I just spent two days with the search champs.

If you have asked me to check something out in the past month, I’m sorry I haven’t gotten to it yet. Hopefully soon!

Anyway, why the post title? Cause I feel stupid after hanging out with the Search Champs and with the MSN brains this week. They have a ton of stuff coming. Suprising stuff, actually. It’s been a long time since MSN has suprised me and I’m happy that they are doing it again.

Plus, over in Chris Pirillo’s mailing list we were joking that we need an “idiotCamp” for the rest of us who are just trying to keep up with the world. Lots of fun.

As to Memeorandum. It’s my favorite site and is getting better and better every week. Lots more sources lately and more length too. If that’s stupid, I want more stupid! Bring it on Gabe!

On Thursday night David Harper of Wireless Ink will be in town. So, I asked him if he’d be interested in coming to a geek dinner since a lot of Search Champs are in town too. He did and so it’s on. 6 p.m. on Thursday night. At the Crossroads in Bellevue.

David is the brains behind WINKsite. Here’s more about David on Charlie Schick’s blog.

Come on Yahoo. Steve Rubel is right. There is so much left to do it isn’t even funny and if a company discovers a better way to do search they can take share away from Google (which, yes, does have a monopoly share of the search market). I can’t find a ton of stuff on Google, though, the job simply is NOT done! Google hasn’t even tried to do good blog search yet, for instance. Technorati/Feedster/Pubsub kick Google’s ass, which is really sad cause all three aren’t very good at bringing you the best bloggers.

I’m sure this will be a topic at the Search Champs meeting we’re having this week (starting tonight). I’ll be there and will report more on what I hear.

More on this on Memeorandum. A lot more.

By the way, I would be willing to bet that Yahoo’s CFO gave a quote that’s now being used out of context.

I really don’t care about search market share. If I did I would have bet on Alta Vista. I didn’t. I went with Google because Google had better search.

Tomorrow? I guess Yahoo isn’t confident. Might be why Gary Flake, one of Yahoo’s top search minds came to work at Microsoft.