The sheer volume of Web content makes it clear that content without curation is simply noise
Yuri Milner, the VC whose Russian Digital Sky Technologies (DST) group has put money into Facebook, Zynga and Groupon, was quoted at the Abu Dhabi Media Summit as saying, Curation is the next big thing.
Said Milner: "The question is, 'How do you select what's relevant for you?' And my guess is that it's probably going to be 50% driven by your network and 50% driven by algorithms."
Upon hearing Milner's prophetic words, thousands of PowerPoint decks were reworked overnight to find a way to edge the word "Curation" into executive summaries.
An understandable impulse. But perhaps premature.
What Yuri meant, and what venture is now scouring the incubators and business plan competitions for, is a way to manage the madness that is promiscuous production of data.
But first, let's look back at the history of why venture has been allergic to content.
In order for investors to be able to put a small number of dollars in -- and get an outsized return out -- businesses need to be able to grow very large with relatively little human intervention.
The portfolio theory of investing requires that the hits are big, and the misses are manageable.
Content hasn't ever fit into this equation. Studios tried to balance hits and misses, but the spiky nature of hits and the relatively large cost of failures has made hollywood a game that only those with money to lose could afford to play. VCs never liked those odds.
Now, along comes curation with an entirely different economic bargain.
Curation is the mixing, and re-mixing of content to create things that are partially or wholly new.
Quickly, venture took notice. Why? Because now content wasn't about 'creation' it was about finding, sorting, filtering, contextualizing. Sure, there was a human element to curation. But the venture economic could kick in, in ways it never could. Audiences and revenue could grow, and margins could grow while the costs of curation remained relatively fixed.
There are some early wins already. Huffington Post's $315 million exit to AOL was like a starting bell for venture sized returns.
So where are VC's looking in the curation space?
There are three categories that have the potential to attract venture dollars.
- Curation software. There are already a large number of software solutions looking to act as curation solutions. Many of them curate the growing twitter content stream, while others look to offer users a way to search multiple social networks, and produce a single curated content output. Venture would do well to look for a service that breaks out ahead of the pack - and bet the market leader.
Curation has come of age. The sheer volume of Web content, and the increasing demand of both content consumers and Web advertisers makes it clear that content without curation is simply noise.
There is huge value that will be created as the web shifts from content created for search to curation built to find and contextualize.
Stay tuned for big wins in this space.
(Originally published in Vator News)