Tom Evslin elaborates on this emerging topic/ idea:

"To oversimplify what he is saying, VC Rick Segal blogs that a VC used to provide both a Rolodex full of contacts which the entrepreneur himself or herself doesn't have but badly needs and the boatload of cash required to execute on an idea. Now, Rick says, the blogosphere is the Rolodex through which customers, supporters, and investors can be mobilized and new technology including free and software and services for almost any purpose as well as very cheap hardware often reduce the money required to what an entrepreneur can float on her or his credit card.

"Show me the powerpoint" has become "show me the service." "Tell me who your potential users are" has become "tell me who your early adopters are." Companies who are at this milestone are not only ready for funding; they are also potential acquisition candidates. So VCs have to compete from the getgo with offers to simply acquire the company.

But, if one company can get to early adopter status on just sweat equity, so can one hundred others. Scaling is always harder than we entrepreneurs think it'll be (and more expensive). The first employees, benefits, and legal stuff cost a lot more than you think they will - and, even worse, take a lot of your time. Mary will tell you that I have always underestimated the marketing dollars needed to get a good idea - even a very good idea - into the marketplace. Sure, the Web has enabled many more creative ways to market, but it's done that for your competitors as well. This is an arms race. Arms still cost money."

No doubt the VC industry has to adjust to the changes in marketing and social networking. But no doubtas well - as VC money is one of the best ways to buy time. My prediction is that time to market and time to reach a critical market share will become shorter and shorter. This pressure will add in future - there is no way back.

## Jeff Nolan adds his commentary to the issue. A must read.