Anthea Stratigos – February 22, 2016
Love this post, How We Got off the Addiction to Venture Capital and Created Our Own Way to Profits, by Rafat Ali, longtime colleague and friend of our firm. I’ve known Rafat since the early days of starting his first company and love now what Skift is up to too. That he jettisoned the addiction to venture capital is a huge testimony to his talent, his truth, and the fact that businesses can run with heart and sometimes be richer and ‘bigger’ for it. Sometimes old fashioned values in media hold – build a great brand, do great work, and expect profits as a sign of a real business. Outsell’s research shows we’re heading into another tech cycle downdraft. Valuations are dropping, there is once again the realization that not all companies can be unicorns, and VC portfolios so committed to the edtech, martech, adtech, agtech, blah-blah tech boom that simply can’t be sustained. The facts stand – there are not enough buyer budgets to go around and the pace of change doesn’t happen at the pace the digerati would have us believe. We’ll probably make it through an election year but things are softening and it doesn’t take a Ph.D. in economics to read the tea leaves. Here in Silicon Valley, there’s a bit of a pall on the party and some firms depending on the venture drug are going to face a day of reckoning. With every recession, comes a new tech cycle, when this next recession comes (and it will), we’ll see industries indelibly changed and most likely the block chain and IoT coming full swing into the next tech hype cycle. This valley moves in natural cycles and has since the early 80’s. Rafat’s done an amazing job setting his sights on what matters, venture capital and tech cycles be damned. This is a must read for all companies in media and information services. Our industry needs more Rafat’s.