Neu VC

Put up a website. Took down the robots.txt today. Thought I'd tell you all first.

Now before you inform me--as Josh Reich did when I asked him to take an early look--that I should get a new designer, I'll let you know that I designed it myself. With help from my five year old.

Between being an investor and being an entrepreneur, the grass is always greener. I meet plenty of entrepreneurs who want to be VCs. I always ask them why. I love helping people start companies, but it's not the same as starting a company yourself.  That said, I think I add more value investing that I do founding, so investing is what I plan to do for the next fifty years of my professional life (or as long as anyone will let me, whichever comes first.)

While I have resisted describing myself as an 'it' rather than a person, it's definitely still true that people attribute more permanence to an entity than an individual. Thus Neu Venture Capital, where 'we' invest. We is just me (ever since Softbank hired my awesome intern away from me by offering him actual money to do the work rather than just scintillating conversation.) Consider it the royal We, without the royal part. The Neu came from a conversation with a friend in which she insisted that my children preface everything they like with a subtle 'neu.' I scoffed at this until one morning when my youngest informed me that the White House was where President Neubama lives. I will not require all future investments to prefix their company name with neu, but I won't promise it won't influence my decision either.

I looked at a lot of VC sites while figuring out how I wanted it to look, and the one thing that was an absolute requirement was something I learned from my Omnicom days: the operating companies are what it's all about. So the home page--in fact the only page--is the companies I've invested in. There is a box of information about me (with my real picture, not my avatar: bonus!) and an entirely uninformative box about what I am looking to invest in (I'll work on it) but it's primarily about the companies I've invested in. I'm good with that in lots of ways. But mainly because if you're known by the company you keep, I'm in great company.

The client does not care if you are intellectually stimulated, Kendall, they just want the goddamned sales curve to start moving up

Every revolution has its reactionaries. I was going to respond to Kendall Allen's article The Math State, but didn't, for a few reasons: it wasn't convincing enough to need a response, I've stated my answer to the objection elsewhere, and Joe Zawadzki is a better writer than I am.

I want to note, though, that when I accepted an offer to work at Omnicom, some 15 years ago, I was handed a copy of Peppers and Rogers.  This was the future, I was told, One to One Marketing. Some six years later the Economist wrote that "the marketing department is the last part of the modern corporation to resist automation." It's interesting that after so many years of wishing for it, the industry starts to object as soon as it becomes plausible.

This new math state is not new. It is a stage in a journey that some of us have been taking for more than a decade and one that will take another decade to reach its apotheosis. For those who don't like it, I'll trundle out the old Rosser Reeves quote that everyone in the agency world says they believe but that few really do:

What do you want out of me? Fine writing? Do you want masterpieces? Do you want glowing things that can be framed by copywriters? Or do you want to see the goddamned sales curve stop moving down and start moving up? 

- Reality in Advertising, R. Reeves, 1961.

Almost a license to print money

Advertising, in time, proved almost a license to print money, and the effects on broadcasting of the revenue model it introduced can scarcely be overstated. It gave AT&T, and later the rest of the industry, an irresistible incentive not just to broadcast more but to control and centralize the medium. To see why, compare the older model: When revenues came from the sale of radio sets, it was desirable to have as many people broadcasting as possible--nonprofits, churches, and other noncommercial entities. The more broadcasters, the more inducement for the consumer to buy a radio, and the more income for the industry. But once advertisements were introduced, radio became a zero-sum game for the attention of its listeners. Each station wanted the largest possible audience listening to its programming and its advertisements. In this way advertising made rivals of onetime friends, commercial and nonprofit radio.

This is Tim Wu in The Master Switch*, describing the beginnings of commercial radio broadcasting.  When AT&T (who was competing with RCA to dominate radio broadcasting) started using its 'long lines' to carry programs to transmitters across the country, they discovered that advertising to a mass audience was far more profitable--and could support professionally produced, higher quality content--than any other business model available to them. This, in turn, lead the industry to successfully lobby the government to allow only a few, high-power 'clear channel' broadcasters (instead of allowing many lower-power ones.)

It's interesting to see how advertising, because it pays for attention, a resource too easily divisible, caused media to agglomerate. The media industry, in protecting itself from competition, has to limit the number and variety of voices that are heard.  Mass media is, by its nature, homogeneous media.

Two things:

1. Mass media, as it is today, is not the only way things can, or should, be. There was a vibrant radio culture before it became a mass medium, with a more democratic voice.

2. Our adtech allows advertisers to reach small audiences. The advertiser no longer needs mass media. Mass media will, however, fight to maintain their current market position. In almost all of the other media this book chronicles, the government was eventually enlisted to regulate out weaker players. The fight over net neutrality was one of these efforts, but certainly not the last.

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* Required reading. This is the first book in twenty years that, as soon as I finished it, I started reading again. A history of the rise, consolidation and disruption of the telephone, radio, motion picture, and television industries, it elucidates the history that can inform scenarios of the possible future of our industry better than any other analysis. It's a good read, too, with wonderful descriptions of the people behind the inventions and companies and how the culture of their times influenced them.