December 2013 Archives

Social Media Analysis is my attempt at a sort of online industry trade journal covering the companies that work with social media data. Last year, I started a recap of the financial transactions in the business, so let's catch up with 2013.

2013 Saw More, Bigger Investments in Social Media Analysis
First, where the investment money went. And boy, did it go, more than $465 million. The champion fundraiser this year—by far—was HootSuite, with $165 million added to its runway.

The Year in M&A (and an IPO), Social Media Analysis 2013
Once all those companies are funded, some of them get acquired. One even went public. The big theme seems to be consolidation, as buyers picked up companies with complementary technology, products and people. At this rate, we should finish concentrating the industry by about 2080.

SMA would be better with more content, but I need help if it's going to get it. I have ideas for new sections, including opinion columns, product reviews, how-to articles and more. Anyone interested in becoming a contributor?

I'm going to do something old-school and blog about a couple of blog posts today. Consider it a break from the latest outragefest on the 'book. Instead, let's share bright ideas about large-impact innovation and how we've been looking for it in the wrong places. It's what happens when two posts, posted months apart, cross my desktop in the same morning.

First up: Jerzy Gangi's post from August, Why Silicon Valley Funds Instagrams, not Hyperloops, runs down the reasons that venture-funded startups keep launching relatively easy web-based software applications. It's worth a read. The short version is, that's what the investment system is looking for, and [insert Willie Sutton quote here].

Next is "Killer Apps" Evolve, Vinnie Mirchandani previewing Chunka Mui and Paul Carroll’s new book, The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups. Google's self-driving cars are one example (built with investment from both corporate and government sources).

We shouldn't be surprised that startups and investors play by the rules of the game. Innovation and addressing the big issues of our time, however, are not the game they're playing.

The M&A market can be characterized as a giant distributed R&D department for major corporations.
— Jerzy Gangi

Remember corporate R&D? Bell Labs, PARC, Lockheed's Skunk Works? Big companies exist to take on projects and markets that are too big for small companies, and part of what they do is large-scale innovation. Whether they invent in their own labs or build from acquired startups, big changes that take place in the physical world will happen only when somebody puts serious capital behind them.

It's interesting that the old-school sources of innovation—university, government and corporate labs—are still out there, and despite long-term reductions, they're still at work. If we're looking for the world-changing innovations, maybe we just need to put more effort into learning about them and their projects.

About Nathan Gilliatt

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  • Voracious learner and explorer. Analyst tracking technologies and markets in intelligence, analytics and social media. Advisor to buyers, sellers and investors. Writing my next book.
  • Principal, Social Target
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