Venture Capital and the Semantic Web
June 21, 2010
Note: I had a great conversation with Mark Brooks of Online Personals Watch last month. It turned into an excellent article on the concepts of semantic social networking and dating in the world of pull. I hope you enjoy it.
Dear Venture Capitalists,
I’m in San Francisco this week, speaking at the SemTech conference. I won’t have enough time in my talk for this, but I want to give you a set of guiding principles for investing in the semantic web:
- The word semantic is now as meaningful as the word digital. Everyone has “cloud” and “semantic” in his business plan these days, as though they were required buzzwords. My suggestion is to apply the semantic web acid test. If it doesn’t pass, then it’s not really the semantic web, it’s something else. Remember that just disambiguating a knowledge domain doesn’t help much if the result is your own set of proprietary terms that no one else uses.
- Look for ecosystems that are beginning to emerge. For example, many companies will start building on top of the XBRL infrastructure, now that the SEC has required it. It’s going to become a “lingua franca” of financial data and will go far beyond reporting. Freebase seems to be the DBPedia of choice, so what can you build that adds to what they are already doing?
- Look for data ecosystems that can solve big problems. For example, the Sustainability Consortium has a huge task – they want process information on hundreds of thousands of products sold at Wal-Mart, Best Buy, and other retailers. They want you to learn about carbon footprints, offsets, worker conditions, contaminants, poisons, and other environmental issues associated with producing and delivering products to the end user. This will involve many solutions providers and many customers.
- Empower consumers to aggregate their information and syndicate it as they like. For example, I think there’s a huge opportunity in ratings and reviews. If you want to review a product, why do you have to go to Amazon.com or ePinions.com to do it? Why can’t you write a single review and then have any sites that want it come pick it up? I think there’s much more opportunity in the review space – contact me if you want to talk further.
- Look for pull, rather than push. For example, Twitter is push. It’s microblogging. It’s really good old-fashioned publishing on a very small scale. Almost everything being built on Twitter is push-based. But if you look for tools that help people aggregate interest or find answers on demand, that’s pull. A good example is Recorded Future, funded by IA Venture Partners and Google Ventures, which helps you answer questions about the future. IBM is investing heavily in answering questions in English. There will be plenty more opportunities here in the coming years.
- Empower business owners to leverage their data across silos. Like many businesses, restaurant owners have to go to dozens of web sites and put their information into each database separately. Help them do that with a few clicks.
- Help build the environment that will bring critical mass to the online data locker. There are plenty of pieces of the puzzle, few of which will be profitable individually, but most of which can be profitable if they can grow together. There are many primitive early examples, but we need to keep building the data infrastructure to make it truly useful to consumers.
- Chrome OS – need I say more? Long term, the apps will all live online. Google may own this space, but really, all you’ll need is a browser. An interesting start-up is CloudO, which seems to have enough cash in the bank to last a while. There’s definitely a difference between an OS and a data locker. We will need a simple kind of OS to manage our screens, and Chrome could be it, but there could be other solutions coming.
- Look hard at what ZumoDrive is doing – Apple should buy them.
- Look at formats that don’t have enough leverage or distribution yet, but are close. An example is the next version of the real-estate listing format, RETS. Another example is the CommonApp. Look at FOAF and other MicroFormats that are breaking out. These are fragmented industries just now presenting opportunities to develop tools that all players can use.
- I-cards! Start building i-cards for big companies. The infrastructure is mature but not distributed. Now we need software and cards to help make it a reality. The hardware is easy – it will be BlueTooth on your smart phone. Help build the infrastructure for i-cards and win big.
- Supply chain opportunities abound. Look at PakSense, which now has an economical solution for monitoring temperature. There are already dozens of customers here waiting for good solutions.
- In pharma and life sciences, look at Science Commons – they are building an open data space for drug discovery. These researchers will need new tools that leverage this data infrastructure.
- In products, look at GoodRelations. This company already has traction with some big customers and needs help taking their initial offering into the realm of real solutions.
You can get more ideas by reading my book. And if you hear of a VC firm looking for a venture partner, I am a lightning rod for these kinds of projects.
