There are changes afoot in the venture capital industry, and my friend Rick Segal seems to have a plan or at least some ideas to adjust with the times. In a cryptic post  today, he quasi-explains the problem: "This world (editor's note: I assume he's talking about the VC business) has some issues that need to get fixed. Everything from being nice (no referrals) to defining the customer (you, the start up), we have lots of issues. Add this to the changes happening on the Web, the big guys using the HR department to handle buying small companies (hire em and ‘buy the company’ via big sign-on bonus), we’ve got trouble brewing." He then talks about creating news and the application of cluetrain and hughtrain "to the art of getting good ideas into sustainable forms that create the because of effect". To be honest, I have no clue what Rick's talking about but given he has consulted with Robert Scoble, Doc Searls, Chris Pirillo and Hugh Macleod, I assume there it's a big idea that needs some time to evolve and emerge. One thought - and it's one that came from a recent discussion - is whether the VC is even needed within the Web 2.0 environment. If you can develop and distribute a new application/service with little capital, what roles do VCs get to play if they can't bring money to the table? Maybe this is what Rick is working on. In any event, he suggests we read this post by Doc Searls and wait for more details. Very, very interesting.....
Update: The New York Times has a story today on VCs who blog, and how their need keep quiet about potential deals and interesting start-ups means they tend to write a lot about things other than venture capital. I wonder what Segal has to say about the article given he's probably one of the most frank - and focused - VC bloggers out there. This isn't to suggest I don't enjoy Fred Wilson's music selections but you never know what you're going to get.

In four days, Google will release its much-anticipated Q4 results. I have no doubt many people within the high-tech world will take a deep breath breath just before 4 p.m. when the Q4 numbers will be unveiled. In my mind, the key question is whether Google results that fail to meet expectations and/or a disappointing forecast for 2006 would necessarily be a bad thing. Maybe it would be a positive development given the enthusiasm about Google and Web 2.0 is bordering on irrational exurberance. You have investors willing to pay a huge premium for Google shares, analysts postulating about the stock hitting $2000, and VCs pouring millions of dollars into start-ups with no business models other than maybe selling out to Google, Microsoft or Yahoo (Yahoo may be acquiring Digg.com for $35-million). Maybe what the high-tech world may need is some less-than-stellar Google results to give people a much-needed slap in the face. The conditions today are eerily similar to the dot-com boom, and I believe ripe for a crash. Henry Blodget has some intriguing thoughts about Google in an aptly-titled post: "Hey Google Gamblers! Belly Up to the Q4 Craps Table". While I wouldn't call Blodget a bear on Google, he's certainly pragmatic about its valuation and metrics at a time when most investors are throwing fundamentals to the wind. (I agree with a comment that Blodget is also being opportunistic because he'll look like a genius if Google shares tank.) There is simply too much riding on Google's continued financial and stock momentum so any disappointment next week will likely cause the market to go into a tailspin. But this, in fact, may be a good thing to recalibrate investor and analysts (other than Gomez & Co.'s Philip Remek), as well as Web 2.0 entrepreneurs looking for a buy-out rather than focusing on building a viable business.
Update: News.com has an interesting story looking at how Sergey Brin and Larry Page each sold $160-million of stock last month. As well, the company is apparently testing with the interface of its search engine page. Here a mock-up.

It wasn't quite a Om Malik-like blogger/entrepreneur extravaganza or a Michael Arrington BBQ but it was nevertheless good getting together with a group of Toronto bloggers last night for drinks and dinner at The Paddock. The group included Mathew Ingram, Rob Hyndman, Tyler Hamilton and Michael McDerment. Needless to say, there was a lot of animated discussion about blogging, the recent Sam Bulte controversy and other topics of little interest to the hipsters at The Paddock. We came away from our three hour discussion that more has to be done to encourage bloggers and people within the Web 2.0 community to get together - whether it's through informal social events or organized meetings. There is a lot going on in Toronto but there needs to be more of a community developed. We've got some ideas so stay tuned!