Remember when the Internet was a platform for economic growth? In the latest battle around Net Neutrality, the FCC’s Open Internet policies were rejected in Federal Court. There already are, and will be hundreds of articles discussing yesterday’s events. In fact, there are so many articles, it’s difficult to author original thinking.
Here’s a perspective on how this might impact Thinktiv. First, we’ve always said we are a new and different kind of venture firm, because we invest significant amounts of talent and services in a select subset of the companies we work with each year. Second, here’s some data about our business. We see about 200 deals a year. These deals represent conversations we have with early stage entrepreneurs looking for financial capital or for access to a talent solution that will give them a competitive advantage. We ultimately choose to work with 30-35 of these companies and we invest in 6-8.
Now, without going back through our entire archive of 2013 deal flow, I am going to estimate that roughly 30-40% of the entrepreneurs we spoke with were building businesses that relied on or demanded that the Internet was an open platform where the content they were creating or curating could be distributed across the ‘pipes’ and to end users.
Let’s fast forward to the picture of the Internet that was clearly painted yesterday. These ‘pipes’ that carry this ‘content’ are now at risk of being owned and controlled by large companies who can effectively block emerging and competitive services. The Internet is now a Vegas nightclub filled with rooms only the ‘cool kids’ can access. This may mean that the hot new startup that takes sports highlights from the past week from your favorite teams and combines them with highlights from the past of similar plays simply can’t send you your weekly personalized ‘Sports Center.’ Why? Because Disney (ESPN) owns that part of the pipe, and they say no. The result? That hot new startup simply doesn’t exist, because who in their right mind would build it or fund it?
This is the point, we see 50-60 businesses a year just like this and we choose to work with some of them. In this new world order, those ideas have no distribution platform, no engine for growth and so ultimately, we simply won’t see them. It’s extremely sad.
Should the final chapter of the Net Neutrality discussion end similarly to yesterday’s ruling, I hope the corporate opponents of Net Neutrality realize they’ve just birthed a poltergeist that will terrorize them for decades to come, entrepreneurs with a focus on disrupting content control and sponsored pipes. Entrepreneurs have proven time and time again, ‘they find a way.’ Said in layman’s terms: Look. The. Fuck. Out.