Competition Web 2.0 style

Filed in archive Venture Capital on April 19, 2006

David Hornick at VentureBlog discovers that suddenly Augusta's Web 2.0 investments have 33 competitors in their sector - on average!

"To give you a sense of the interesting challenge venture capitalists face when investing in new media companies today, one need look no further than this list itself. At August Capital, we have funded 4 of the companies on the list: LiveJournal, Technorati, Trumba, and VideoEgg. Considering only those companies that made the list, on average, our four portfolio companies face 33 -- yes, that's right, 33 -- competitors in their respective verticals. That is mind blowing. And this list does not even include Yahoo, Google, Microsoft, IAC, Fox, Vivendi, Ebay and Amazon, all of which are likely competitors of each and every company on the Web 2.0 list. As the venture community continues to look at Web 2.0 companies in the coming months and years, this list is an invaluable piece of perspective ."

It's not just a challenge for Venture Capitalists - also for entrepreneurs:

* Should you start a business or better not because of all the competition?
* Will you ever convince an investor that the sector can digest Web 2.0 company number 34?
* How do you brand yourself with so little uniqueness?
* Should you be competing for scarce Ruby on Rails developers?
* Are you ready for the blame game - who had which feature when first and who copied from whom?

While money seems loose - what can you get out of it in the end?

Thanks SiliconBeat for the hint!