Is a Second Winter Inevitable for Search Vendors Who Need Cash?
March 15, 2016
I read “Valley VCs Sit on Cash, Forcing Startups to Dial Back Ambition.” I am not sure how one turns a knob on ambition. I think in terms of common sense. The write up suggests:
For most firms this is a pause, a reset, not a meltdown.
Very metaphorical. I think this passage in the write up chops the niblets off the cob so we can see the core of the matter:
Once driven by fear of missing out on the next Uber or Airbnb, formerly frenzied venture investors have turned circumspect, waiting to see how far the tech market will fall.
Forget the unicorns. Think in terms of the outfits which get funded at more modest levels. These outfits are similar to Attivio, BA Insight, and Coveo, among others. Generating revenues is expensive and difficult. Paying for bug fixes and enhanced technology are expensive and don’t follow a predictable schedule.
My hunch is that some of the search and content processing vendors will find that instead of spring arriving, another winter is coming.
What are the options? Selling out, closing the doors, and partnering. Let’s not overlook marketing using wild and crazy buzzwords. Anaphora, anyone?
Stephen E Arnold, March 15, 2016
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