Blogging as a Source of Profits

Scott Kirsner asks in the Boston Globe yesterday whether

venture capitalists should blog. The general feeling is that the ones who

do blog can’t imagine not blogging: it’s a great way of finding ideas,

and ideas of course are the lifeblood of the VC industry.

The VCs who don’t blog, by contrast, seem to be stuck in a zero-sum world where

information is more valuable if it isn’t shared. But there’s one other interesting


Charley Lax, managing general partner of Grand Banks Capital in Newton Centre,

says the limited partners who put their money into venture capital funds think

blogging is "stupid. They want you to be working on your portfolio companies

and looking for the next great deal."

This is something which is going to change only veeerrry slowly. I am an avid

consumer of blogs, and there are many blogs which I trust and admire on certain

subjects much more than any major media outlet. In fact, I think it’s fair to

say that for pretty much any subject, if you look hard enough, you’ll

be able to find a blog which covers it with more informed intelligence than

any newspaper. But among people who don’t read blogs for a living, the reputation

of blog is still pretty dreadful: they’re often known primarily as partisan

players at the dirty edges of political campaigns, or else as simple gossip


Venture capitalists, of course, are paid to be ahead of the curve, so it’s

maybe not surprising that its among their ranks that we find the first individuals

who are making real money from blogging – not by investing in blogs, not

by selling advertising on blogs, but simply by blogging themselves and using

that information flow as a source of profit.

It’ll be very interesting to me to see which executive will rise above the

popular prejudice and be the next person to proudly blog. Most corporate blogs

are bland to the point of unreadability, especially if they emanate from a public

company, so I suspect that the next person to consider his or her blog a major

contributor to corporate profitability will be an entrepeneur or the CEO of

a privately-owned company. But I can’t wait for that kind of blog to become

much more commonplace, especially outside the technology industry, where it’s

most needed.

In fact, there is a good example of exactly such a blog in my blogroll to the

right: The Big Picture, by Barry

Ritholtz. Barry is a very busy hedge-fund manager, and I suspect that he uses

his blog as an opportunity to think through and discover potentially profitable

investment ideas. Barry? Would you say that your fund is more profitable as

a result of your blogging?

(Via Fred

Wilson, of course.)

This entry was posted in technology. Bookmark the permalink.