A VC in Vacationland

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A major issue facing web-enabled software start-ups is whether to target users or sellers as the primary source of revenue.  Well, the gods have spoken to Google on this issue.

It's the users, stupid.  Google has shut down its expensive ($200+ million investment)  adventure into aggregating unsold radio and newspaper ad inventory and selling it on line.  The whole grisly story behind the radio debacle is slowly emerging as Google shutters the web site and sells the IP off to a large media company to try and make a go of it themselves (Rupert, up for another adventure?).

We have already seen this story play itself out on the main stage during the early part of this century.  The venture financing of on-line "marketplaces" , seeking to aggregate sellers across many industries to offer their wares to users was a huge and expensive bust.  Apparently, Google thought that it was immune to history on this one.

For all entrepreneurs looking to monetize their SAAS business, remember that providing good value to users who will pay to access that value is the best way to grow revenue–and also attract premier sellers to your site. Few VC's are funding ad or seller based revenue business models at the moment.

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