VCs and the Wisdom of the Crowds
Dave Winer released one of his famous mind bombs a couple of weeks ago, and the blogosphere has rightfully been abuzz about how VCs can be the next target for Christensen-style disruption. Many have remarked how VCs are needed much because startups require less capital and VC-rolodexes are less crucial in the internet/web/blog era. Others have noted that there have been publicly traded investment vehicles like meVC or even CMGI in the dotcom era.
However, I’m surprised that there hasn’t been much discussion about what I think is the most important insight Dave Winer has made: VCs are ultimately paid to analyze and identify startup’s with the biggest payoff. However, can users in aggregate (alaWisdom of the Crowds) be better predictors of which startups will do better?
I think it’s a very worthwhile avenue to investigate. Without boring (pun intended) into legal and regulatory details, perhaps it’s worth starting up a Digg-style website to rate Web2.0 companies?