I’ve worked with a lot of tech start-ups; many had ill-defined paths to revenue. Some had no path at all. I share Om Malik’s skepticism (see here and here) towards the soundness of all that VC money deposited in the bank accounts of developers of “Widgets, Facebook Applications, OpenSocial Web 2.0 gee gaws.”
Of course, a lot of start-ups require a large amount of capital to fund product development, marketing, etc. But developers of these ‘demi-apps’ don’t necessarily need much funding to get going or thrive. Furthermore, social networking facilitates a level of user engagement that – to me anyway – presents a much more tantalizing opportunity for funding than VCs.
See this article in the June issue of The Atlantic about Senator Obama’s “Amazing Money Machine.” With the passion that some users have for widgets, and with the technology to build and leverage strong networks of like-minded people, doesn’t it make more sense for these companies to try to tap into their users for funding?
There’s been a lot of moaning and groaning about Twitter outages recently (not a widget I know, but bear with me). From what I see on CrunchBase the company has raised $5.4 million. With their user base, however, and the obvious passion that user base has for the service, maybe the ‘Obama money machine’ might help solve the problems.
To be sure, tech start-ups don’t necessarily have the appeal of a candidate for the presidency of the United States, but who says they need to raise $50 million a month?