VCs' blogs do not appear to drive web traffic to their funds

Thursday, February 4, 2010

A classmate of mine from HBS, Rob Go put up an interesting post yesterday about the relationship between venture capitalists’ website traffic and blog traffic. In short, he found that there was very little correlation between the two. I thought a graph might clarify the data:

It appears that most VCs are tightly clustered around 10,000 hits/month to their websites (Sequoia and First Round Capital standing as outliers, but excluding those, the standard deviation was ~2,000 hits). What Rob (and I) found surprising was that while blog traffic varied widely, it didn’t appear to affect website traffic.[1] If we assume that website traffic is a loose proxy for entrepreneurs’ interest in a fund (as opposed to blog traffic, which seems to indicate interest in the person writing), that seems to indicate that blogs may be building independent brands for the entrepreneurs, but it doesn’t (from this data) appear to be increasing deal flow.[2]

This really isn’t enough data to draw a conclusion, but it does raise the question for me: “If not increasing interest in their fund, what value do VCs’ blogs deliver?”

1. The best fit trendlines are all negative (i.e., a negative correlation between website and blog traffic), and statistically insignificant (R-squared<.1). This remains true even when removing the sites with zero blog traffic or when removing the website traffic outliers.
2. Yes, website traffic is a *very* loose proxy. Yes, the blogs could be delivering value by helping entrepreneurs focus on the funds more suited to them, lowering website traffic, but increasing lead quality. But, website traffic still seems like a very preliminary step in investigating a fund; I’m surprised there isn’t a stronger correlation.


#32 February 4, 2010 at 2:50 PM  

You might get a better sense of the value of blog traffic if you controlled for VC returns. Given that you probably can't get return data easily, you may at least be able to get fund size from something like CrunchBase.

Sequoia and First Round may be getting a ton of attention because of the past success of their partners. Fund size or fund returns wouldn't really strip that out, but it may be a start.

I feel like a blog must be effective at establishing a VCs brand in the absence of a lengthy track record.

Steve P. Davis February 4, 2010 at 3:05 PM  

I agree - a more rigorous regression that includes age of fund, past returns (more specifically, good publicity around past returns), and perhaps one more catch-all for publicity (like # of famous funded companies) would likely reveal more.

But, even if adding those things gives greater predictive value, it would seem that writing a blog just gets you up to "recognized." Fred Wilson has an *enormous* number of followers, but that doesn't translate into more traffic for Union Square Ventures. I'd expect an outlier value like his to show some effect. I've got to doubt that blog traffic would have much of an effect even taking into account other factors.

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