Big Ning Funding

July 10th, 2007

I must say the latest investment round and subsequent valuation of Ning is big news, but not a complete surprise. I checked out Ning a while back and think they’re ahead of the curve – giving users the ability to create their own social network.

But even if you don’t buy into that idea, there are two other reasons why Ning may succeed. One is that Marc Andreessen is a really, really smart guy. I have deduced as much after reading his new blog for only a month. His “Guide to Startups” (start here) has that level of past experience, expertise, and analysis that most entrepreneurs and tech bloggers only fantasize about. He’s picked up blogging very quickly. If part of a startup’s valuation is the management team’s ability to attract attention and execute, Ning has one up right there.

The second reason is whether we’re in a time period when a company should raise a huge amount of money because it’s possible – and then be really frugal with it. Right now, the VCs have the doors open, when during the post Web 1.0 downturn it was the opposite.

Marc Andreessen says as much in his “Guide to Startups, Part 6” where he says raise as much money as you can (“without giving away control of your company or being insane”). Jason Calacanis agrees with this approach. So I’m thinking this huge amount of funding doesn’t mean they’ll spend it like a bunch of drunken Amici’s Pizza loving sock puppets.

I’m wondering if other startups that haven’t taken funding might feel moved to do so in order to keep up with ones that have. Both Mahalo and Ning now have scads of cash that with relatively frugal management, could last them years. And if that’s how a boom leads to a bubble, I guess we’re on our way.

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