Fred Wilson: The Next Internet Opportunity Is in Social Upheaval

The next big opportunity after investing in applications is in social upheavals and revolutions, said Union Square Venture’s Fred Wilson today. He said after the infrastructure of the Internet and the applications have been established, the next step is revolutions personified by Wikileaks, BitCoin, the Arab Spring, the hacking attack on PlayStation Network (s sne) and other changes.
Wilson said in predicting the future, it’s best to look at the past and how innovations evolved. He drew parallels between the next step in the Internet to the dawn of the automobile era, where the cars and roads gave rise to applications such as fast food and the suburbs, which eventually gave way to anti-establishment upheaval.
“If you look at what’s happening next, you see huge societal upheaval, you see basically societal revolutions, [afterward,] you see … Levittowns, McDonalds (s mcd), strip malls … you had the ’60s sexual revolution, feminism, anti-war establishment. That’s what’s next for the Internet,” Wilson said.
Wilson said it’s unclear how investors can even participate or fund these ideas, but that’s where the Internet is moving now. But it doesn’t necessarily mean funding new companies, Wilson said. “When you look at Twitter, you see that Twitter doesn’t just benefit from (social revolution) but facilitates that. Those ideas that are almost anti-establishment are where you see the biggest opportunities,” he said.
It’s an interesting idea, and supremely ironic to have a discussion on how to capitalize off of a social revolution that may in some ways be a reaction to the inequalities generated by some versions of capitalism. From a practical viewpoint some of the tools of upheaval and revolution are on questionable legal ground. But as Wilson noted, the current stage of frothiness is raising valuations, prompting the venture fund to pass on some current opportunities. He said valuations are up 25 to 50 percent across the board, making it hard to invest in the same way Union Square did in the past.
“We have to move with the market, but there comes a point that the market moves beyond our comfort zone for a particular transaction, and we won’t move on that,” Wilson said.