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The VC Web Chart - Network of the Networkers

September 21, 2006 on 4:45 pm | In Company Analysis, General |

An aha moment I would like to share (I live for this!). At the end of the LinkSViewer citation on Guy Kawasaki’s blog, he presciently linked to The Web VC Chart written by Alex Iskold and edited by Richard MacManus. So I got to thinking, “How can we look at this chart in another way?” Because I am mostly interested in Social Networking and Bookmarking, I mapped 7 companies from this column together (Digg, Engage, Facebook, Friendster, Gaia, Kaboodle, and LinkedIn). I filtered this map for post-2001 founded Internet company links and removed pendants (one-tie links).

Relational Map (Click on to view full size):

Initial Observation: Note how the key players form in the center of the map (ironically around LinkedIn) and that 8 other WebVC companies (not in the Social Networking and Bookmarking category) form linkages within the network.

Discussion: From this map I can ascertain four general findings:

(1) How these companies are connected provides additional information as to who the key players are in the network – this reflects the elite investors, board members, and managers in the Web VC space, which speaks to who stands to gain the most if it reaches critical mass and becomes profitable;

(2) The network map between all Social Networking and Bookmarking companies is interconnected (reachable, as we say in network lingo) – this means that the “networkers” are well-connected to each other (especially the individual investors), which speaks to the inherent power and longevity of the social networking space;

(3) The indirect company links formed in the network result in eight other WebVC Table companies (Oodle, Wink, Edgeio, Wikia, Feedster, Odeo, Six Apart, and Browster), even though they were listed in different column categories – this means that the Web VC space is well-connected as a whole, which speaks to the inherent power and longevity of the entire Web VC space;

(4) What is not in the map is of interest as well. Because of the lack of other post-2001-founded Internet companies in the network (save MetaWeb Technologies and StrongMail Systems), the network is relatively isolated from other funding – this reflects a pocket of capital that may not be as well-connected to other post-2001-founded Internet investments, which implies (on the flip side) that the risks are higher, although from findings (1)-(3) the key players seem to be “in it together” as a self-contained group.

Certainly, interpretations will vary. I am extremely interested in what others have to say. Any other findings are also welcomed. There are some more specific details from the maps that would induce discussion on this topic – I leave this to those who are more “in the know.”