The prevailing wisdom among Web 2.0 bloggers and venture capitalists seems to be that companies truly worthy of being funded and blogged about have to be purple cows. Namely, companies and products that are so exciting and evocative they have zero need for marketing budgets (see iPhone for details).
The Cult of the Purple Cow
I get the Purple Cow idea, I really do. But I wonder if there is possibly an overacceptance of the Purple Cow philosophy in the Web 2.0 herd. In fact, I’d argue that 98% of companies in a healthy economic ecosystem are not purple cows. Take a look at the most successful companies in America – the Fortune 500. How many of these are Purple Cows? Apple and Google spring to mind. I find Southwest Airlines fairly compelling, and maybe Disney.
But what about the richest companies? Does Exxon need a pastel logo and slick API to get us to buy their gasoline? Are bloggers irrestibly drawn to write about top 10 companies like Wallmart, ConocoPhillips, or Citigroup? How did these companies possibly become the richest corporations in America without being Purple Cows? It flies in the face of Web 2.0 wisdom.
Case in Point
My sister works for a very profitable B2B web application in Silicon Valley. They’ve developed technology to allow items to be tracked around the globe, using the internet. Their stock has doubled in the past year and they make more money than most other web 2.0 companies. But I have never heard them blogged about in the web 2.0 space because they service industrial companies and their business is not considered glamorous.
In the quest for the next home run company, I hope that Venture Capitalists do not inhale too deeply from the Purple Cow pipe. While there is power in cool brands like Flickr and Digg, there is also tremendous power in the less glamorous tools that fuel the internet economy.
I can accept the fact that the blogging herd only blogs about Purple Cows. But I sincerely hope the Venture Capital world doesn’t begin to follow this trend as well. They will miss out on good opportunities.