A couple of weeks ago I attended an OpenCoffee club, an ingeniously simple weekly get together founded by seed investor, entrepreneur and all round star of the London VC scene, Saul Klein.
“It’s not about pressurised matchmaking or pitching – it’s just about hanging out in the same place as people who are interested in enterprise and technology and seeing what happens,” says Klein, having been inspired by the level of informality he’d seen in Silicon Valley. The event has been a dramatic success and is now replicated in more than 80 cities around the world.
There’s plenty to praise about its London incarnation, currently held on Thursdays at 5th View Bar in the Piccadilly Waterstones. Despite a genuinely informal atmosphere, there are deadly serious VCs, angels and fledgling internet entrepreneurs to be found at every meeting. Personally, I found it great fun to watch the eyes of seasoned investors and budding entrepreneurs glaze over when I told them I was a journalist; informal it may be, but even if investors and entrepreneurs don’t want to make a match, they’ll at least want to flirt with each other without a hack getting in the way.
Amongst the bright ideas – and there are notable examples of disruptive start-ups that have networked their way to an early round of funding through contacts built at OpenCoffee – and the creative buzz, I felt that too many of the ideas were alarmingly familiar. The general atmosphere reminded of the flurry of media coverage late last year that suggested we were in the midst of a second dotcom bubble.
The experts will tell you that this time it’s different. Now, there’s an ecosystem of technology providers, advertisers and online marketers to support the current wave of ideas. That’s true, but it doesn’t mean the market is strong enough to support a proliferation of ‘me too’ business models.
Everyone’s ‘going social’ and have been for some time. It worries me that the offerings are becoming too niche and rely too heavily on the sustained viability of giants like Facebook. Much has been made of the 5% drop in users that the site experienced between December and January, its first ever fall. I doubt that Zuckerberg is overly concerned, but perhaps the current crop of social network entrepreneurs should be.
The elephant in the room is the fact that no one has established an effective way of monotizing the enormous traction that these networks have. If your offering is niche, or relies on an incumbent like Facebook or MySpace for its survival, it could indicate a serious problem and almost certainly suggests a lack of imagination.
As legendary investor Sir Ronald Cohen wrote in his book on entrepreneurship, “everyone can see the first bounce of the ball. It is the second bounce that is uncertain”. Taking advantage of uncertainty is the entrepreneur's challenge, and there’s no doubt that there’s plenty of mileage left in the current web boom. Just don’t tell me about your social network.