Why the Smart VCs Are Boarding their Jets

http://www.techcrunch.com/2009/02/20/why-the-smart-vcs-are-boarding-their-jets/

by transburgh • 17 years ago

31 40 17 years ago

vaksel2• 17 years ago

because there is more opportunity oveseas now. India and China will each have more internet users than USA within a few years

dpeq• 17 years ago

This does not necessarily imply innovation happens there.

vaksel2• 17 years ago

thats the point, those countries are just starting out. You can just copy paste proven ideas from the states and make millions.

Like Mint? Angry that you missed the boat? Good news! Invest overseas in the same type of company, and watch it grow to become a market leader by having a monopoly. And you have a guaranteed exit lined up, when Mint enters your market and decides to buy you out.

Sure the core innovation will still come from the states, but the first innovator is rarely the guy who profits from the idea.

krschultz• 17 years ago

The basic crux of the article is that VC != technology investors, and that money spent in emerging markets on relatively commodity businesses can yield returns similiar to those seen in the 90s with tech businesses here, while here tech businesses are maturing and not returning the same as they used to.

I think this is a good thing for the world overall, the more people that come up to the middle class, the more people that will have disposable income to spend on products. I just think that there are plenty of promising ideas here to invest in as well if they start looking past Web 2.0 in favor of more concrete businesses.

old-gregg7• 17 years ago

Very nice to hear: "good thing for the world overall", how cute. However, quality of life basically translates into resources/population ratio within a country and that's a zero-sum game. The planet at the current level of technology couldn't even provide for all existing Chinese to suddenly start living like people in US/EU do, yet their populations, especially if measured in number of households, much more relevant than just counting heads, keeps growing.

And no amount of Internet innovation will solve the problem of diminishing clean water, oil, ocean fish, disappearing forests, soil erosion and increasingly bad air quality. Right now 1st world countries are basically "exporting" these problems to developing nations, eventually these issues will be averaged out: eventually China won't be so poor to accept our non-recyclable electronic garbage anymore, what then?

pg2• 17 years ago

Any increase in someone's quality of life comes at someone else's expense.

Historically that has not been the case. Historically quality of life improvements have come from technological discoveries (e.g. penicillin) and social evolution (e.g. of the middle class). Who loses if penicillin is discovered? Who loses if some former serfs decide to become artisans instead?

The single biggest improvement in quality of life for most humans over most of history has probably come from improved hygienic practices. How does that come at someone's else's expense?

I also disagree with your specific claim that "Internet innovation" can't improve physical world problems. Would you claim books don't help solve the problem of clean water? Not literally, obviously; you can't use books to make clean water, except by ripping out pages and using them as water filters. But think how much harder it would be to solve the problem if books didn't exist. And the Internet is an innovation on the scale of printing.

smanek4• 17 years ago

The basic tenet of capitalism is that trade is not zero-sum: it actually creates wealth.

If I have I pay you $10 for a service that costs you $5 to provide, you've actually created $5 of wealth out of thin air. I end up with a service that I value more than $10 so I come out ahead, and you end up with money that you value more than the marginal cost of providing me that service so you come out ahead.

As a simple check, the average person (in the world) today is better off than the average person 50, 100, or 1,000 years ago. Even though are population has increased significantly, our wealth has increased even more.

Why the Smart VCs Are Boarding their Jets

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