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Is the Sky Really Falling?

Chicken Little
There’s a lot of the end-of-Web 2.0 bandwagon-jumping happening in the wake of Sequoia holding a meeting earlier this week with its portfolio CEOs, and Seesmic announcing yesterday it will lay off seven of its employees, or one third of its staff.

Yes, the global economic landscape is volatile and there are dark clouds of uncertainly looming but everyone seems to be jumping to conclusions without offering much perspective. TechCrunch, which has built an empire profiling Web 2.0 startups, calls Seemsic’s move the start of the “UnParty”. (TC is an investor in Seesmic.)

First, it makes complete sense for Sequoia to gather its CEOs to give them a lay of the land. As a major investor with a vested interest in their success, giving them an overview of what’s happening and suggestions for how to survive tough times is a sensible move. As well, the opportunity for their CEOs to get together to network and compare notes can only be a good thing.

As for Seesmic, it’s restructuring is being seen as a harbinger of things to come. While many online companies will have no choice but to tighten their belts to reduce burn, Seesmic’s staff reduction arguably has everything to do with the slow pick up of video comments.

Everyone talks about having conversations within social media but it’s happening using text, not video, which has not resonated with many consumers.

Seesmic is struggling because it’s product isn’t solving a problem or meeting a growing need. With $6-million of financing completed in June, Seesmic is betting is can ride out the economic storm and, more important, survive long enough for video comments to gain traction – if, in fact, that ever happens.

Update: The chatter about what’s happening within the tech world continues to rage on. Fred Wilson adds some solid perspective, while Michael Arrington addresses some of the “criticism” aimed at the VCs getting pragmatic about what’s going on.

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  • http://www.loiclemeur.com Loic

    You are right the video comments on blogs are disappointing, but you are only looking at a small part of the video conversation and therefore making a false failure statement.

    Seesmic had 500 000 videos posted and the number of videos posted monthly doubled since its launch in May, it is growing month after month as well as the traffic on the site.

    It does not mean I have a business model and it will be enough to have one, but declaring video comments do not work is not accurate. They do not work (I hope yet) on blogs they grow fast elsewhere.

  • http://www.markevanstech.com Mark Evans

    Loic,

    Thanks for the comment and insight. Time will tell whether the concept and the model resonate with users, and what you’re doing with being as streamlined as possible is buying more time, which makes complete sense.

    Mark

  • http://www.thisisgoingtobebig.com Charlie

    “It does not mean I have a business model…” = Fail.

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  • http://www.markevanstech.com Mark Evans

    @ Charlie: I think startups without a business model are going to find financing in this new environment difficult, if not impossible.

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  • http://www.thisisgoingtobebig.com Charlie

    @Mark Startups without a business model should always find financing difficult. :)

  • http://www.thisisgoingtobebig.com Charlie

    PS… You should install Disqus. I only came back here looking for Loic’s quote… I wouldn’t have noticed you writing back, but Disqus actually lets you know when someone replied to you.

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  • http://www.markevanstech.com Mark Evans

    @ Charlie: Tried to install Disqus but it doesn’t seem to want to work with my theme. I couldn’t import the existing comments into Disqus. I tried both versions of Disqus.