You’re not a VC, you’re a media company that buys equity in startups
I’ve been thinking about a TechCrunch article, published a couple of weeks ago, entitled Chief community officer is the new CMO. The reality fuelling these arguments is increasingly pronounced: it gets easier by the day to monetise communities on, and because of, the internet. The web started with niche communities; now, it enables anyone to build the same.
Why anguish over a marketing function and strategy when you can turn your customers into… enthusiasts, acquisition channels, owners. The long tail from a thousand true fans (Wired’s Kevin Kelly’s marketing insight) provides sufficient revenue for a creator to thrive.
How can businesses achieves this?
This, for me, is the true case for content: if you want to collate people and hold onto them, write about stuff that they’re interested in, that’s useful and engaging. Build them a media platform.
By extension, you can go further: become the media company for your community.
If you’re a VC (to run with an example), be useful and insightful to founders. Showcase your value-add by helping them with theirs. The best VCs are true partners to their founders, cheering through the good times, counselling through the bad.
Every topic from fundraising to sale-closing, product strategy to executive hiring; they are mental sparring partners, and practical aides. Plenty of VCs will recognise themselves and their firms here. But if you write it down, you will evolve the VC–founder relationship from a 1:1 to a 1:many. Thinking like a media company is how you scale. And, at the same time, reach new audiences, help a greater number of people and do more deals.
It was the printing press that engendered (as early as the sixteenth century) the first newspapers. It took a hundred years for the first recognisable newspapers — with headlines, columns, dates — to appear, and another century before The Times invoked new typography technology and established editorial standards.
This is exciting. Despite our generally sprightlier pace of innovation, we’re clearly in the foothills of media. (The consumer internet is the same age as me, which isn’t very old.)
The creator economy will augment capitalism, making it easier than ever for value to flow to individuals. For any institution or enterprise, the opportunity is to grow faster and bigger by extending the relationship with customers and would-be customers (or founders!). In time, across our intangible world, businesses will be founded first as media companies, and then sell the other stuff.
P.S. My headline is disingenuous: depending on the macro landscape and how easy money is, sometimes VCs are buying equity in startups, sometimes they are selling cash in exchange for equity :)