Venture Capital Becoming Irrelevant to the Web?

I recently got my first venture capital investment request for this blog, which, of course, I turned down. Nothing wrong with VC, of course, other than it isn't a good fit for niche publishing. I generally hate meta blogging stuff, but these 3 quotes are generally all saying the same thing from slightly different angles, which is quite important when you consider the backgrounds of the different sources.

From a VC blog: The Economy of Abundance

The Economy of Abundance allows business owners to defer choices to the end users. What better way to find out what consumers want than to give them everything and see what they actually buy. That is the paradigm of abundance. Why get your news programmed by CNN.com when you can have your news bubble up from the collective wisdom of end users at Newsvine or Reddit? Why get your television programmed by CBS when you can leverage the collective wisdom of the web to find great shows like Lonelygirl15 or Ask a Ninja? No longer will the success or failure of content be dictated solely by the Economy of Scarcity (e.g. Walmart). Rather, it will be dictated by the will of the consumers, as empowered by the Economy of Abundance.

From an entrepreneur who grew a huge business without funding: My Vision of where the web is going.

I think that VC’s will start to wake up and realize that Ajax is a feature and not a product, at the same time how are 100-1000 or so VC funded companies going to compete with a couple of hundred thousand webmasters who have created sites wanting a piece of the action? Many of these webmasters would be perfectly happy with $100/month. But if even if 1 in a 1000 of those adsense driven sites is very successful your entire industry could be screwed. Just look at online dating.

From the owner of a leading tech publishing company: Search Startups Are Dead, Long Live Search Startups

In my talks on Web 2.0, I always end with the point that "a platform beats an application every time." We're entering the platform phase of Web 2.0, in which first generation applications are going to turn into platforms, followed by a stage in which the leaders use that platform strength to outperform their application rivals, eventually closing them out of the market. And that platform is not enforced by control over proprietary APIs, as it was in the Windows era, but by the operational infrastructure, and perhaps even more importantly, by the massive databases (with network effects creating increasing returns for the database leaders) that are at the heart of Web 2.0 platforms.

Platforms like Amazon's S3, Google AdSense, and Google's Custom Search Engine allow passionate people to keep costs low, automate business models, and fund the growth of accidental business models.

As...

• networks get more and more efficient

• people share optimization tips
• amatures, professionals, content, and ads blend together, and
• the web gets faster and faster at spreading good ideas (I am even creating a review network based on that)

the need for venture capital goes down daily for those who can create good passion based ideas. You are not going to build a Google without some funding, but as long as you consider your cost structure from the start you do not need to try to act like Google.

Each additional passion driven amature website makes search more relevant and cuts the publishing market into more pieces. Traditional media companies had to rely on their region based monopoly market position to have a large profit margin, but given the distributed nature of the web is the traditional business financing structure going to even remain relevant in many markets?