I think it's crazy to assert that VCs are dead because companies like UrbanSpoon and Xobni, both of which required little more than time and some basic infrastructure to start, are not good candidates for VCs.
Companies once backed by VCs - Google, Intel, Cisco, etc. - make up a significant chunk of the American GDP. In all of those cases, it is obvious that they required significant up-front investments in infrastructure to break even. For example, Google required a vast server farm to index the web. Cisco and Intel required resources to manufacture and sell complex physical products.
Consumer-facing products that do trivial things that spread mostly by word-of-mouth - like recommend a restaurant in your area or search your email - are not good candidates for multi-million dollar, early-stage VC funding. They are too easy to bootstrap, and I think the impression many would-be entrepreneurs have that they need to raise oodles in venture cap is a holdover from the dotcom era they missed out on.
In these cases, Y Combinator and the rest are much better options if you do need enough cash in the meantime to, for example, provide enough Ramen to feed your team of 3 college students.
I tried to be really clear on this that I am talking about online startups.
But I think you missed the point: It takes a lot of money (VC or otherwise) to create companies that go public, but it doesn't take much to create a great product.
Google is a perfect example: they didn't need significant up-front investments to create their first search engine - they ran it out of Stanford on borrowed computers. They built a product and had users way before they raised a ton of money.
That's a point I absolutely agree with. However, your hyperbolic introduction (which admittedly isn't coming from your fingertips, but nonetheless one you say you agree with) seems to be arguing that VCs are dead PERIOD, which I don't buy at all. :-)
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I think it's crazy to assert that VCs are dead because companies like UrbanSpoon and Xobni, both of which required little more than time and some basic infrastructure to start, are not good candidates for VCs.
Companies once backed by VCs - Google, Intel, Cisco, etc. - make up a significant chunk of the American GDP. In all of those cases, it is obvious that they required significant up-front investments in infrastructure to break even. For example, Google required a vast server farm to index the web. Cisco and Intel required resources to manufacture and sell complex physical products.
Consumer-facing products that do trivial things that spread mostly by word-of-mouth - like recommend a restaurant in your area or search your email - are not good candidates for multi-million dollar, early-stage VC funding. They are too easy to bootstrap, and I think the impression many would-be entrepreneurs have that they need to raise oodles in venture cap is a holdover from the dotcom era they missed out on.
In these cases, Y Combinator and the rest are much better options if you do need enough cash in the meantime to, for example, provide enough Ramen to feed your team of 3 college students.
I tried to be really clear on this that I am talking about online startups.
But I think you missed the point: It takes a lot of money (VC or otherwise) to create companies that go public, but it doesn't take much to create a great product.
Google is a perfect example: they didn't need significant up-front investments to create their first search engine - they ran it out of Stanford on borrowed computers. They built a product and had users way before they raised a ton of money.
That's a point I absolutely agree with. However, your hyperbolic introduction (which admittedly isn't coming from your fingertips, but nonetheless one you say you agree with) seems to be arguing that VCs are dead PERIOD, which I don't buy at all. :-)