Ok, so I’m a mercenary!

Everyone is asking me why I don’t post to the blog more often. Sigh! Five key reasons:

#5: I couldn’t figure out how to use TypePad

#4: All this time I thought that “blog” was a mathematical function

#3: I am a wee bit of a skeptic (there, I said it!)

#2: I am sooooo busy – a beleaguered working mom (two beautiful girls – 7 and 4)             

And the #1 reason --- drum roll --- no one was paying me to do it!

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Email provider lands funding?

A little over a month ago VC firm Greylock Partners led a funding round raising $15 million for Constant Contact, an email marketing vendor that targets small businesses and nonprofit organizations.   Huh?  Why would Greylock invest a sizable chunk of change in a space that is becoming increasingly commoditized and has low switching costs and barriers to entry?  Greylock is an extremely smart VC, right?  I mean they successfully invested in Doubleclick, Epsilon, and Red Hat among others.

My theory is this - Greylock invested in Constant Contact because -
• Small business is a hugely underserved market and small businesses are traditionally technology adoption laggards.
• Sinking disproportionate amounts of money in a market that traditionally grows organically allows them to “buy” accounts and build “value” rapidly.
• Email is just the first in a whole slew of services that the $15 million can build, package and provide small businesses.
• Once Constant Contact gains sufficient momentum it becomes a great merger or acquisition target yielding a nice return on investment for the VCs (Greylock!) who backed it.

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