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By Root 812 0

know in this, the Googliest industry. He was one of the first VCs to blog. When he started, his competitors thought he was nuts. Venture capital was a secretive business. You didn’t want adversaries to know what you were thinking or the trends, companies, and people you were tracking. The goal was to get there first; it’s a race. But Wilson benefited from revealing his thinking publicly. It helped him hone his ideas and attracted deals—one third of his investments come from the blog and online conversation, he says. Because of his publicness, Wilson developed a reputation online and a wider network of acquaintances who could help him do his work. When I saw him, he was about to head off for a month in Europe, where he wanted to find businesses at the far reaches—Slovenia, for example. He mentioned his trip at the end of a blog post and instantly had 100 people all over Europe wanting to meet him. As he traveled, I followed his meetings via Twitter updates.

“Being public and searchable and findable,” he said, “is an important piece of it—owning the first page of your Google search, getting the brand of Fred Wilson out there.” When you search Google for Fred Wilson, the first result is his blog (at avc.com); the second and fourth are pages with his bio; the fifth is his Wikipedia entry; the sixth is his Tumblr blog (on a platform created by a company he invested in); the ninth is his Twitter feed (another of his investments). There are other Fred Wilsons on the page: an artist who has had PBS documentaries made about him and a band by the same name. But according to Google, I was talking with the Fred Wilson.

On his blog, Wilson gets to try out ideas and products using these new platforms and tools. He has driven readers crazy cluttering his blog page with too many cool new widgets. But then he invested in many of those tools. Wilson’s attitude about his blog and investing resembles mine about my blog and media: We learn, experiment, extend our reputations, and meet people. He uses his blog to help run his business; he found his latest associate through a blog post. He advises other companies to hire “net natives” who understand the new world because they live in it—and there’s no better place to find them than on the net. Wilson inspired many of his competitors—mostly those who invest in the web, not in other big-iron arenas such as biotech and technology infrastructure—to start blogging. Now a score of prominent VC bloggers write posts explaining to entrepreneurs how to pitch VCs and how to run companies.

This ethic of sharing carries over to the companies in Union Square’s portfolio. Wilson told me that one of his investments, Clickable, a search-engine marketing company, joins discussions on other sites just to answer questions that often have nothing to do with the company. They don’t necessarily promote Clickable. They share knowledge like good citizens of the gift economy. “Their trail is their brand,” he said. He told me about the head of another start-up who relishes getting into conversations—even with users who are angry when his service gets overloaded—because he learns so much about what users want.

Web 2.0 platforms—open and inexpensive software and services that make it easy and cheap to start new sites, services, products, and companies—present both opportunities and challenges for investors. The law that says small is the new big can make life hard when you are accustomed to making big bets, as VCs do—because they also want big returns. Today, a lot of new companies simply don’t need VCs’ money and when they do, they need less. If VCs have to invest in smaller increments in more companies, it is harder for them to manage their portfolios, which increases the cost and risk of investing. Never thought you’d feel sorry for a VC, did you?

Consider Outside.in, a company started by author, journalist, and entrepreneur Steven Johnson. Outside.in organizes local blog posts and their conversations around places and topics. It makes ingenious use of Google Maps, free databases, and other open-source software. Johnson