At the opposite end of the spectrum, Subcontract.com, an hr-xml demo site, is one of my favorite portents of the "Rule" as it affects IT professional staffing. Subcontract listed 6,103 vendor members before it went dark. That’s six thousand global vendor selling essentially the same professional staffing services and supporting executives, boards of directors, facilities, etc. for a sector which is essentially "one big database" of automated job and candidate matching ( which is what hr-xml standards strive to enable ). The actual bottleneck in this process is the refusal of the service purchaser to adopt extensively detailed, standardized ( hr-xml flavored ) job descriptions; I refer to the difficulties caused in IT by the persistant refusal of purchasers to adopt streamling technologies as the business case for the need for a "Microsoft Certified Client" designation ( or insert your favorite vendor alliance program token here ) so that IT vendors industry-wide can know who the most efficient onboarding clients are without having to relive the SOP nightmares.
In parallel, the speed which often occurs with open source software development is, in part, because it eliminates the unnecessary corporate hierarchy, retaining only its online "code repository" function ( cvs, subversion, etc. ). A wiki full of task assignments, agreed upon deliverables and dates, and an occasional conference call or face to face — and Robert’s your Relative. If you haven’t had a chance to listen thru other related implications of the "Rule" in the Tofflers’ latest, "Revolutionary Wealth," I’d strongly advise you to do so…soon.</ed.note>
So, we focus on a different metric. We look at the number of firms that have made a new investment in the last 12 months. To us, if you have not found at least one new deal in that time, there is a high probability you have indeed been "shaken-out" and are simply playing out the cards in their hand.
In 2000, there were 1156 different venture firms that made at least one new deal. In 2006, there were only 597. This is more like a 50% drop, not just 15%! We think that is the big, so far unwritten, story. The US venture industry has been cut in half. That certainly qualifies as a major shake-out.