Today at noon I am giving a talk to the Japan Business Network in New York – an informal get together organized by my brother-in-law, Charles Danziger.   The topic is the fundamental transformation of industries that the Internet will bring about.  I am planning to use the following outline.

Some background on Union Square Ventures
- about $300 million under management across two funds
- invest exclusively in the Internet
- based in New York but national mandate (and some international investments)
- mostly lead first institutional round
- well-known investments include Twitter, Zynga, Etsy, Foursquare

Fundamental USV thesis
- The Internet will change everything
- This will go on for a long time (decades)
- Will provide significant startup and new investment opportunities along the way

First story:  Newspapers
- these were big and mighty businesses
- they existed for a long time (100+ years)
- highly profitable for a long time

Along comes: the Internet

Step 1: Unbundling of economics (online classifieds)
- job classifieds: HotJobs, Monster
- for sale: eBay
- dating: various sites
- all of the above: Craigslist
-> result: major source of profits removed

Step 2: Unbundling of content
- the rise of blogs
- specialist publications
- user generated content
-> result: splitting of audiences

Net result: newspapers everywhere are struggling

Second story: Disrupting the disruptors

Job classifieds: HotJobs, Monster
- 1:1 translation of offline model to online
- listing for a fee
- really just playing on cost advantage

Along comes: Indeed

Vertical search for jobs
- find jobs wherever they are
- can only be done on the Internet
- native revenue model: keyword advertising

Third story: The new news businesses

Blogs
- Blogs have low cost structure
- Many blogs don’t need to make money directly (side project, lead generation, etc)
- Targeting specific audiences
- Highly varying levels of analysis / original thinking / reporting

Aggregators: Techmeme
- Analyze link structure
- Analyze social media / real-time web
- Run software in the cloud – all variable cost
- Small team

Extrapolating
- Not just the news business – all businesses
- Why?

Many other businesses with huge information/content components
- Education
- Healthcare

Education example

What about manufacturing?
- 3D printing
- separation of model making and “printing”
- lot size 1
- mass customization

But goes deeper: fundamental fabric of organizations
- Modern corporation now > 100 years old
- Command and control structure
- Trade-off between motivation and cooperation/information sharing
- Transition to “small pieces, loosely joined” (like architecture of the Internet)

Doesn’t stop there: governments?

We are in for an exciting ride into the future.