Wilson gave a speech last week in Manhattan. In other words, there was no reason to run the story. What's really going on? Wilson himself explains: The Times had this piece in the works for weeks. My theory: Editors there felt it needed to run soon, before the sector Wilson favors — hipsterish Web startups like Twitter and Etsy — suffered some embarrassing disaster.

(Photo by Hiroko Masuike/The New York Times)

It'll be catnip to the bloggers featured on Techmeme, an automated news aggregator which has attracted an obsessive following among tech bloggers, if not actual traffic worth speaking of. Instead of seeking actual pageviews, Techmeme gamers try to collect some ineffable sense of self-importance. And so they'll inevitably start linking to Zemanta-suggested stories out of laziness. Even reporter Anthony Ha admits, "Linking and adding other media can feel like time-consuming distractions when I’m writing VentureBeat posts."

With all the TechMeme pile-on posts drawing from the same pool of Zemanta-planted background links, the feedback loop in tech blogosphere groupthink will be turned up to 11. Honestly, with an algorithm finding your story leads, an algorithm doing your research, and an alogrithm choosing the relevant ads, why do we need human tech bloggers at all?

Twitter is no different from other user-generated content, like Flickr, YouTube, Del.icio.us, Blogger, WordPress, TypePad. Those businesses are good businesses. People who can't wrap their heads around trying to monetize these businesses aren't trying that hard. It would be naive to assume that the management teams of Twitter or FriendFeed or Disqus don't have four or five strategies for monetization in their business plans that they are evaluating.

That youth and inexperience is an asset to many of these startups. We’ve been through why that is before. The founders have low personal burn rates so $25,000 can take them six months. They are largely developers/hackers who know how to build stuff quickly and inexpensively. They create lean, mean, capital efficient companies. They grew up with the web so they have a “native” feel for how web apps and services should work. And of course, they don’t know why they are going to fail so they “just do it”.

Or: "No, honey, that minimal investment doesn't make me look cheap; it's just your exceptionally high burn rate showing." (Photo by Xerostomia)

By which the Twitter investor actually means to say: "Back off, you'll never catch us now!" to the likes of Benchmark's Peter Fenton, who just recently invested in FriendFeed. Competitive posturing aside, Burnham goes on to say what Union Square Ventures is interested investing in next: "Areas where you're actually having an impact on someone's work, someone's life, someone's real-world experience." Sounds great, but how do we Google that?

Victim: NextNewNetworks cofounder Timothy Shea

Victim: Yahoo ad exec Mike Walrath

Victim: Union Square Ventures partner Fred Wilson

She was recently spotted in New York's startup-laden Flatiron and Chelsea neighborhoods, making the rounds. New York VC Fred Wilsion is an unabashed fan, and the two have already invested alongside his Union Square Ventures in Etsy. Might the pair break hearts in both San Francisco and Vancouver by moving to Manhattan instead? As for New York, all I can say is been there, done that. Head back to Canada for Sonnet's sake, guys. American citizenship ain't what it used to be.

It was only a few years ago that Decrem was threw an open bar party on Nob Hill for Flock, and now he's rumored to have tapped Salesforce CEO Mark Benioff for a first round at an $8 million valuation. Pinch Media, for its part, is being backed by Union Square Ventures. And that doesn't even count the $100 million Kleiner Perkins has set aside for an "iFund." What's the prize? $1.2 billion in business that a Piper Jaffrey analyst is estimating the Apple iPhone application store will generate. And that doesn't include the money 111 Minna will make hosting parties for wantrepreneurs to celebrating their good fortune on Sand Hill Road hustling the latest flavor of the month business model. (Photo by Ian McKellar)

Then Wilson and Jerry Colonna founded Flatiron Partners and turned $150 million into $750 million. Says Wilson:

I don't recommend anyone reading this to try it the way I did it. If you choose to get an MBA, get a real job out of business school. Help to build a few businesses in an industry sector you really like. Become an expert in that industry. Then try your hand at venture capital. You'll be much better at it than I was my first ten years in the business.

The scaling shit only bugs nerds. Most people aren't doing enough messaging volume to notice. The people bitching are the ones who would never leave. Actually, whoever invests in Twitter is getting IP rights to something that solves a whole *class* of scaling problems, i.e. not just what's wrong with Twitter. I mean, I assume Twitter is a feature of everything going forward. Either Twitter proper, or that capability. That means everyone who succeeds will encounter this issue. If there's five non-Google companies in the world who've figured this out, I'd be shocked.

Fred Wilson of Union Square Ventures once described Hype Machine as "the best thing to happen to music since the Rolling Stones!" But for a founder like Volodkin, taking nearly all of a $10 million offer must surely seem more attractive than rolling the dice by taking venture capital and trying to get a smaller slice of a larger jackpot. Some VCs have resorted to bribing founders — buying shares outright, rather than just increasing their paper wealth — to dissuade them from selling, as Automattic's investors did with Matt Mullenweg. VCs like to talk about making entrepreneurs wealthy. But they like to arrange things so they hitch a ride to the payday.

My own loyal Tumblr followers — well, 2 out of 45 — say the unnamed price is right. Union Square Ventures partner Fred Wilson agrees, with a caveat. "It makes a ton of sense," he told me. "They are still in the 'make the service great phase' though."

We agree. For all its impressive growth (9,394.1 percent, year over year), Tumblr can still only claim 510,000 visitors according to Compete.com. Flickr has 24.2 million.

Karp tells us he realizes free feature growth can't stop if he wants Tumblr's userbase to continuing growing so fast. Freeloading users will continue to get new features, too, he said. But they're going to be features that in turn help make Tumblr an ad-supported destination for the wider Web. We're guessing more pages like Tumblr's dashboard-like front page, except broken out into specific subject areas like "autos" and "women" so that ads can be more lucratively targeted.

New features that disproportionately raise Tumblr's hosting costs or require support, however, won't come for hipsters who don't give Karp their parents' credit-card number.

I'm pretty sure, however, that's there's one way to get out of paying fees for Karp's new features. Just a guess: Drive enough traffic to the site and Karp will be happy to comp your subscription and maybe more. Julia Allison new Web content company, for example, will be based on the Tumblr platform. And I bet she won't be paying.

Why? Paid subscriptions could probably pay Karp's bills. Fark.com founder Drew Curtis says TotalFark subscriptions bring in hundreds of thousands of dollars each year for his zany headlines site. But Karp's investors, including Union Square Ventures and Spark Capital, will pressure him to find a much larger revenue stream — something that gets its hands on all the money large advertisers aren't spending on the Web. Proctor & Gamble's annual advertising budget, at $1 billion, can buy a lot of airtime, but it can't get trust-funders who only watch The Office when it's embedded on the Web to change their detergent-purchasing habits.

In my mind, the single most important thing is not revenue in a time like this. The most important thing is cost structure. Thomas Cole says "smart companies are battening down the hatches". That's right.