Boston VCs Grok Social Media—So Can We Please Not Tell That Facebook Story Anymore?

5/12/09Follow @bbuderi

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allow others to create custom Facebook apps such as quizzes and virtual gift-makers. LOLapps’ co-founder and chairman Ariel Poler (formerly of StumbleUpon, among other companies), was a Dog Patch denizen—and Polaris was the sole investor last September in the company’s $4.5 million Series A round. With some 44 million people using LOLapps’ Facebook applications, “We believe they are actually the largest Facebook apps company,” says Hirshland.

Hopes for Boston

What about Boston? Sabet’s theory is that when Boston VCs got into the consumer Internet during the Internet bubble, “they jumped in late and they got killed.” Many, he believes, said ‘never again.’ That, in turn, created a spiral where for a long time a lot of entrepreneurs felt that many Boston VCs weren’t interested in consumer Internet companies, creating a situation where they either moved to the West Coast or morphed their idea to something that was more infrastructure related.

Now, with a new crop of Boston area VCs “investing hundreds of millions of dollars a year in this space,” Sabet says he doesn’t think that attitude is as prevalent. Which led me to ask him whether he thinks more local social networking/new media entrepreneurs will be encouraged to start companies here—and keep them in New England.

“God, I hope so,” was his reply. “But we have some work to do.” (More on that last comment in a bit.)

That same hopeful sentiment came from Hirshland, who says there are definitely more entrepreneurs attuned to social media now in New England than in the past. “The vast majority are in their 20s, who just grew up on the Web,” he says. When they come out of local universities, “they’re not necessarily going to a telecom infrastructure company or an enterprise software company, or fill in the blank.”

Hirshland says that their success will feed upon itself. The Valley, he says, “had Yahoo and Google and eBay and Paypal,” and after a few years at those companies, key employees had made money and “wanted to try their own thing, just creating a whole wave of entrepreneurs.”

Similarly, in New England, he says, “What we need is for a couple of those [startups] to really take and become business and companies, and spawn the next generation…and that’s what I think we’ve been lacking.”

So now, back to that point from Sabet about having work to do to strengthen New England’s hand in all this. Both men, it turns out, are willing to take some extra steps to help social media entrepreneurs along. For instance, Hirshland says Polaris would be open to the idea of creating … Next Page »

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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  • Luca

    That would be Fred Wilson of Union Square Ventures, not Fred Williams of Union Square Bank.

  • http://www.xconomy.com/author/bbuderi/ Robert Buderi

    Very sorry–fixed, thanks

  • http://www.dailygrommet.com/ Jules Pieri

    I am happy for any progress on advancing the Boston locus for social media and consumer internet enterprises. The list in the article is a good start but it’s still relatively anemic, considering that half of it is more social media infracture, and not consumer facing. At the end of the day, we are all consumers (politicians, policy makers, investors, employees, and entrepreneurs) and the best way to grab mindshare for social media innovation is to create meaningful consumer facing businesses. To build the kind of experiences to which people become deeply attached.

    Although it is not social media-based, Zipcar is one of our best local consumer internet examples. I like CarbonRally too, as a very young example of local social media-fueled innovating company too. Care.com and RunMyErr come to mind as well. We have to broaden our definition of social media to include the innovative use of those behaviors, tools, and technologies. Not just the creation of platforms and infrastructure/analytics around social media.

    Anyway we need more, more, more in Boston, and much of the onus and opportunity lies within the investor community–to get out of its comfort zone. So few investors have really done consumer and social media in their careers. It’s understandably hard for them to trust even deeply experienced teams in these areas…it’s such a scary black box to investors. Success in consumer facing-enterprises can’t be driven entirely with dials and levers–it takes insight and confidence too. Social media does, however, offer amazing customer engagement and acquisition tools to make consumer businesses profitably scale in very new ways. That’s the real opportunity in social media.

  • Jules Pieri

    Oops…typed too fast. Meant to type RunMyErrand.com I erred.