Makin' (Losin') Money on the Web

by Kurt Cagle

Lloyd Budd, author of the "A Fool's Wisdom" blog, a colleague and former coworker, recently wrote a comment on my Long Tail posting recently, generally complementary (Thanks!) but taking exception to my statement:

This has meant that it is becoming increasingly difficult for software shops to make money, even though the economic difficulties of years past have largely eased.

On the heels of that, I saw another essay on the web, Paul Graham's The Venture Capitalist's Squeeze in which the author argued that its becoming increasingly difficult for VC fund managers to invest in IT startups because the cost of such startups is so low now on the marketing, hardware, and production side that the amount that most fund managers wish to invest is far larger than these companies need or increasingly want.
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So what do you think of the dynamics of the long tail? Is Kurt right or is he full of it?


2005-11-11 17:09:55
You’re probably thinking of Paul Graham’s “The Venture Capital Squeeze”: