1301

The buzz on curation... can VCs capitalize?

The sheer volume of Web content makes it clear that content without curation is simply noise

Technology trends and news by Steve Rosenbaum
April 6, 2011 | Comments
Short URL: http://vator.tv/n/18e5

Yuri Milner,  the VC whose Russian Digital Sky Technologies (DST) group has put money into Facebook,  Zynga and Groupon, was quoted at the Abu Dhabi Media Summit as saying, Curation is the next big thing. 

Said Milner: "The question is, 'How do you select what's relevant for you?' And my guess is that it's probably going to be 50% driven by your network and 50% driven by algorithms."

Upon hearing Milner's prophetic words, thousands of PowerPoint decks were reworked overnight to find a way to edge the word "Curation" into executive summaries.

An understandable impulse. But perhaps premature. 

What Yuri meant, and what venture is now scouring the incubators and business plan competitions for, is a way to manage the madness that is promiscuous production of data.

But first, let's look back at the history of why venture has been allergic to content.  

In order for investors to be able to put a small number of dollars in - and get an outsized return out - businesses need to be able to grow very large with relatively little human intervention.

The portfolio theory of investing requires that the hits are big, and the misses are manageable.

Content hasn't ever fit into this equation. Studios tried to balance hits and misses, but the spiky nature of hits and the relatively large cost of failures has made hollywood a game that only those with money to lose could afford to play. VC's never liked those odds.

Now, along comes curation with an entirely different economic bargain.

Curation is the mixing, and re-mixing of content to create things that are partially or wholly new.

Quickly, venture took notice. Why? Because now content wasn't about 'creation' it was about finding,  sorting, filtering, contextualizing.  Sure, there was a human element to curation. But the venture economic could kick in, in ways it never could. Audiences and revenue could grow, and margins could grow while the costs of curation remained relatively fixed.

There are some early wins already. Huffington Post's $315 million exit to AOL was like a starting bell for venture sized returns.

So where are VC's looking in the curation space?

There are three categories that have the potential to attract venture dollars.

Curation software. There are already a large number of software solutions looking to act as curation solutions.  Many of them curate the growing twitter content stream,  while others look to offer users a way to search multiple social networks,  and produce a single curated content output.  Venture would do well to look for a service that breaks out ahead of the pack - and bet the market leader.           

Curated content platforms. Sites like SBNation, a collection of over 290 individual communities, each with coverage and conversation led by fans.  There's no doubt that the larger of these communities themselves will catch the eye of the Venture community.  (Comcast Interactive Capital (CIC) and Accel Partners are in SBNation).  Their move in to tech with the annoucment of a deal with the former editors of Engadget is a sign of things to come.

Platform Services. The rapidly growing nature of web content makes it critically important that curation and publishing platforms are SaaS offerings that have access to scale and support.  This means that while some folks will try to build curation platforms, the large majority of content oriented entrepreneurs will choose to build on existing or emerging curation platform offerings.

Curation has come of age. The sheer volume of Web content, and the increasing demand of both content consumers and Web advertisers makes it clear that content without curation is simply noise. 

There is huge value that will be created as the web shifts from content created for search to curation built to find and contextualize.

Stay tuned for big wins in this space. 

(Editor's note: For more on the topic of curation, check out Steve's book: Curation Nation)


Related news


blog comments powered by Disqus