But the thing that is particularly exciting about new services in the developing world is that they may come with fundamentally new business models. And, it turns out, new business models are even more disruptive than new technologies. Microsoft can copy Netscape. But copying the Linux business model is harder. Chase can copy Venmo’s app, but copying Venmo’s business model is harder.
So I am excited to watch this second mobile revolution unfold. It may be an opportunity for US-based VCs like me. But more likely it will be an opportunity for VCs and early stage investors who have had the courage and foresight to set up shop in these emerging locations. The investors who had the courage and foresight to set up shop in China in the late 90s and early 00s have been rewarded fabulously for that. If you ask me where the next big whitespace for VC is, I would point to the developing world. It doesn’t come without its risks and roadblocks, but it feels to me that it has enormous potential.
- Fred Wilson
Finally someone who says it the way I see it. One of the many reasons I am passionate about the emerging economies is the immense potential of new business models that the West isn't exploring because they don't have the same constraints. It isn't lost on me, as Fred says above, that most of the smart investors are turning their eyes to this part of the world; as one example witness 500 Startups' new 500 Kulfi fund. Expect to see much more of this in the next couple of years.