Being in the venture capital industry, I find that sometimes it is worthwhile to take a step back from the day-to-day to take a look at the large impending trends which are just beginning to affect us. With many frequent headline predictions desensitizing our understanding of their relative importance, those in the industry (including myself) sometimes forget to (or can’t) see the forest through the trees.

And so I thought it would be good post to highlight what are some very important uber-trends which starting to emerge in the digital media space. To most readers, they likely may seem obvious, but perhaps serve as a reminder what’s likely in store. And where there is change there is opportunity; the following seven identified trends are perfect opportunities for startups to leverage:

Seven Coming Digital Uber-trends which Are Ripe for Startup Opportunities

1. The digitalization of transportation experience. Our cars are transforming from motorized transportation into digital immersion experiences. With in-dash devices ranging from GPS, to satellite radio, to integrated telephone controllers, the place where many Americans spend much of their day is going digital. Also, other transportation experiences, namely public transportation, is being affected by a digitalization trend – everything from digital signage in subways to infomation touchscreens in taxis is modifying what we do when going from here to there.

2. Internet’s facilitation of green lifestyle. With concern over the environment becoming a progressively more relevant issue, the web provides a natural vehicle for connecting people to resources and services which lessen impact of individuals on environment. We are at the beginning of “The Green Web” which will provide individuals within our society a leveraged way to positively affect the planet.

3. Influence and word-of-mouth marketing facilitated by online social software. Marketers are increasingly concerned about truly engaging with consumers as the effectiveness of traditional advertising erodes. Social software (in its broadest sense) coupled with the principles of word-of-mouth marketing will provide for successfully reaching potential customers via the most trusted source – people they already know.

4. Fundamental shift demographics of internet usage. The demographics of internet utilization are rapidly changing. Baby-boomers are getting older. International traffic and other languages are will be soon dwarfing that of the U.S. and English. Domestically, we have a growing population of youth who have never known life without internet and mobile phone. Couple these and other demographic shifts together and the internet audience of today looks very different in the not-so-distant future.

5. Mobile consumption of information. A day where everyone carries a powerful hand-held device (which includes GPS and significant processing power and memory on a higher-bandwidth network) will allow information to proliferate in a way setting which is just becoming available to a small segment of power-users. Location-relevant information ubiquity is dauntingly exciting.

6. Wide proliferation of video. While in the age of YouTube it may seem trivial to mention, but I believe it can’t be overstated. We’re moving to a world where every web page, every device, every screen will be have some type of video content. The long-tail of video content will be wagging.

7. Digital information becoming increasingly personalized with greater user control and choice. While search as proactive information-seeking reigns today, the notion of passive personalized discovery which is already taking hold will become ever more important with an abundance of information. User control and choice in that process is becoming integral in the content consumption process.

In hindsight, it’s easy to look back at companies that emerged on the wave of past important trends. Successful endeavors have an easier time with the wind against their backs. Fifteen years from now, I would be surprised looking back if many of these above categories don’t have enduring successful companies which were borne out of capitalizing on them.

(Note: This post was inspired by and largely based on internal discussions that entire Venrock team about megatrends in our industry.)

When I first met with the team at Splunk, they were working away on building a system that could accurately track a transaction as it traversed the entire enterprise stack. If the transaction broke somewhere along the way, their software could help IT discover the cause of that failure. While it was clearly a pain point for some businesses, there was no clear customer and the value proposition was a relatively hard one to articulate. But the technology they were building created a whole lot of intelligence built on the fumes of the data center (namely the log files). I was interested in what they were doing, but not interested enough to fund them. One day I got a call from Michael Baum, CEO of Splunk. He told me that they had "figured it out" and that we should meet up. I was certainly game to hear what they had figured out and we got together again a short time later.

So what had Splunk figured out? They had figured out that if they could track, manage and correlate log files across the entire data center in near real time, that they could create the killer IT Search Engine that would allow an end user to see into their enterprise stack in a way never before possible. The Splunk guys showed me a very simple example using Voip data and how one could track all systems that touched a particular extension by simply searching for that extension in the Splunk engine. I was an instant believer -- it was clearly a better way to manage the massive amounts of IT data that exist in enterprises today. I invested in the Series A and the Splunk team got to building the software that they had envisioned.

A short time after investing in Splunk, I was meeting with a group of managers from one of August Capital's biggest Limited Partners (the folks who invest in our fund). I was describing for them what Splunk was planning to build and they asked me "so what's the market size for that?" I quickly answered as best I could -- "I have no idea." Needless to say, this was not the most satisfying answer they had ever received and they stared back at me with a look that suggested perhaps I should come up with a better answer. But the reality was that I didn't have a better answer. Not because it was unclear if there was any market for what Splunk was building. But, more importantly, because once Splunk had built their search engine, it was unclear what market they would go after. I explained to my investors that Splunk had a number of multi-billion dollar markets in which they might play (management, compliance, BI, security, capacity planning, development, etc.) and the only question was which ones they would choose to go after first.

That conversation with my Limited Partners was over two and a half years ago. And since that time, the Splunk team has built precisely what they promised -- a large-scale, high-speed search technology for your data center. But despite the fact that Splunk's software has been downloaded by over 100,000 users and despite the fact that there are now more than 350 paying enterprise customers (including 21st Century Insurance, BEA, British Telecom, Catholic Healthcare West, Chicago Mercantile Exchange, Comcast, Dow Jones, FedEx, Fiserv, GE Consumer Finance, LinkedIn, Mantech, Mozilla.org, NASA, Shopzilla, Telstra, U.S. Department of Energy, U.S. Department of Justice, U.S. Department of State, Vodafone and Yahoo!), I would still have a tough time answering the question posed by my Limited Partner.

Splunk has not built an application. Nor is Splunk merely selling software. Splunk has created a software enabled platform that continues to be extremely broadly applicable. Is Splunk mission critical when it comes to maintaining availability of large scale enterprise systems? Yes. Is Splunk invaluable in the fight to maintain the security of your data center? Yes. Does Splunk uniquely simplify the process of data compliance? Yes. Can Splunk help you dig into your data and analyze it like no other solution? Yes. But, frankly, that's just the tip of the iceberg -- once you are able to query individual pieces of data across your entire data center in real time, the applicability of the platform is limited only by the creativity of its end users. And those end users are driving value back into the platform, creating applications we hadn't thought of before.

So what is the market for Splunk? i still couldn't say for certain. But I can tell you one thing -- it is awfully big. And in the venture business, that's big enough.

So earlier this week I signed up for a Facebook account.

The same day I read Giga Om’s post on his “long standing belief that social networks are going to become mere commodities.“ (He uses the example of Ning adding additional networks on its platform, decreasing the individual value of each individual network, as a proof point.)

On the whole, he is right. The value of a social network is not in the functionality and technology itself. Feature parity should be achieved rather quickly on any new set of innovative aspects that a MySpace, Facebook, or anyone will introduce. Rather, like all media properties (whether digital or otherwise), a social network has value based on:
1. The information contained within it. In this case, the information about the friends and connections in network.
2. The signal value communicated to society about who a user is as a person. In this case, what being on a social network represents to others.

Essentially, what really matters is brand.

What does it mean for someone to be on Facebook? What does it mean to be on MySpace? What does it mean to be on the dozens and dozens other general-interest social networks or vertical ones which are profiled daily on Mashable. In other words, what does it say about you, who you are as a person? The answer to this question is one reason why the essay about “viewing American class divisions through Facebook and MySpace” resonated throughout the blogosphere over the past two weeks.

In the end, each media property means something different to a different set of people. It’s the brand that’s important, not the functionality.

Take an analog analog here… a magazine. Readers of a magazine like Time could care less about the printing press used to make the publication, whether it was inked with the latest technology or an antiquated one. What they do care about is:
1. The information contained within it. In this case, a weekly synopsis of the news.
2. The signal value communicated to society about who they are as a person. In this case a person who has The Economist or Us Weekly on his coffee table is potentially saying something different about who he is as opposed to Time.

I signed up for a Facebook account because:
1. Many people I know and trust and respected are all of a sudden using it, and I assumed that because they find it useful, so would I.
2. It’s reached a tipping point where it potentially no longer is about high school and college students, but rather my peer set.

There’s an interesting meme going through the blogosphere in the past week asking “now that we have social networks are blogs obsolete?” Tony Hung argues that rise of social networking sites doesn’t mean the twilight of blogging is near, but rather that it is a different medium than the social networks, as blogging is “about creating and developing [and publishing] well thought out opinions.”

Along those lines, Nivi just posted a recommendation to everyone to start a vertical blog rather than a personal one. He says a vertical blog is “… for your readers, … focused, … branded [my bold], …[and] attracts a specific audience.” He concludes by writing, “Personal blogs are dead, long live vertical blogs.” And I think he’s right. To me it’s looking increasingly like social networks are platforms for communicating information about yourself and blogs are platforms for communication about a specific topic. The exception, however, is for those who consider their own name/identity a brand and a vertical subject in and of itself. (I don’t, so I personally maintain both vertical blogs of GenuineVC and that of the WebInnovatorsGroup. Now if I could only find the time to also launch a very niche vertical content blog at my domain BostonsBestBurgers.com…)

Again, what matters here again is the brand: what info it represents and what it conveys about the reader.

When I explore a potential VC investment in a consumer-facing online media startup opportunity, one of the questions I ask is: “what is the long-term potential to build a long-term brand?” With any media property, it either needs to have wide mass appeal with an adequate monetization rate or a niche appeal with a very high monetization rate. Whether or not it has a social element to it depends on the audience. But in reality, from here on out, I suspect almost all of new online media will be some type social media.

So, yes, I’ve signed up for Facebook. Now whether I actually continue to use it is another matter… it has to continually satisfy these above two requirements.

It appears that Shameless Self-Promotion Week has become Shameless Self-Promotion Month. Not that I am promoting any more companies than I had originally planned. I am still only talking about those businesses in which I have invested on behalf of August Capital. But, it turns out, it takes more time than I had anticipated to sing the praises of such a fantastic group of companies.

Just this past Friday, Craig Syverson and I recorded the latest installment of VentureCast at University Cafe in downtown Palo Alto. I had recently been discussing with a friend the fact that University Cafe has very much become a part of the startup economy again. Folks like Rajeev Motwani and Ron Conway spend a fair bit of time meeting with companies at University Cafe. Practically any time you're there you can look around a see deals getting done. In fact, shortly before Craig and I started recording VentureCast, the guys at the table next to ours were banging out the details of some sort of financing. Unfortunately, they had finished their negotiations before we started recording, or we might have captured the blow by blow on tape.

A couple years ago I was meeting with an executive from one of my portfolio companies at University Cafe. While we were talking, Rajeev wandered by and told me to come say "hi" before I headed out. Rajeev was talking with a smart group of guys about their new company in the local advertising space. Those folks were the founding team from DoneRight (at the time called Perform Local). I was intrigued by their business, impressed with the team, and a short time later I ended up funding their company.

The CEO of DoneRight was -- and is -- Paul Ryan. Paul is a phenomenal technologist. He had most recently been the CTO at Overture and, thus, had been part of the team that had pioneered the very concept of pay for performance. The idea at DoneRight was to create a pay for performance local advertising network that would allow local service providers to purchase valuable leads through DoneRight. By aggregating demand through on and off-line lead generation techniques, service providers could use DoneRight as their marketing arm, paying only for the leads they received. On behalf of the consumer, DoneRight would screen service providers for professional licenses, BBB complaints and the like, and only accept professionals onto the service that DoneRight was comfortable guarantying. Given this data-intensive, data-driven service, there was no one better to build DoneRight than Paul.

Because local services are . . . well . . . local, DoneRight has been rolling out their network on a city by city basis. With each new city, DoneRight gains more insight into how best to provide consumers with the information they need to make informed buying decisions, while providing service professionals with the channel they need to scale their businesses. The service launched in San Diego, and has rolled out to Denver, Chicago, Houston and Dallas over the course of this year. In 2008, DoneRight will expand considerably, using what they've learned in their first five metropolitan areas to optimize the DoneRight experience on a nationwide basis. To date, over 1,000 home improvement professionals have entered into prepaid performance agreements with DoneRight. While other online services have failed to gain meaningful sales traction with local businesses, DoneRight has been able to sign up its first thousand paying customers in record time, because it is providing real, measurable results for its business customers -- In the short time that it has been doing business in these few metropolitan areas, DoneRight has processed nearly 500,000 consumer requests for referral to a DoneRight certified service professional. And that number will scale dramatically as DoneRight expands nationwide.

DoneRight is another business in which I invested because of my love of data. Ultimately, the lead generation business is a numbers game. How much does it cost to acquire a lead? What will a service provider pay for it? Does it scale? Those were the questions that needed answering. And given Paul Ryan's background, I invested, confident that Paul would be able to produce the necessary infrastructure to answer those questions and create a scalable business. And he has. Better yet, as Paul and the company learn more about lead generation on a local level, they are able to apply that knowledge to each of their metropolitan areas, making each city more efficient and the overall business decidedly more profitable. If you live in San Diego, Denver, Chicago, Houston or Dallas and are looking for a guaranteed service professional, DoneRight.com is the place to go. And if you are living elsewhere, stay tuned. DoneRight will be coming to your neighborhood soon.

I had the pleasure of being in the very first Facebook generation. My college was one of the first 13 to be added to Facebook, and we were all jazzed just to see photos of each other and occasionally get a "poke" -- the implications of which are not clear to this day.

I only have a couple of friends from college who are not on Facebook. The rest are. And I went to a college without a computer science department.

Generally the way new technologies spread, according to Geoffrey Moore's Cross the Chasm, are by starting with early adopters and spreading to the early majority. The early adopters are visionaries and do things simply for the sake of trying a new technology (e.g. being at the leading edge of "social networking"). The early majority are pragmatists who try something when they're sure of it's value (e.g. seeing what your friends are up to). Crossing from one to the other is a huge and often fatal challenge.

LinkedIn took this challenge and started with the early adopter Silicon Valley scene. They started to invite their friends, VCs, lawyers, bankers, etc. until it eventually spread so that many professionals -- even here on the East Coast -- know what it is. Reid said on my show that he doesn't think it's hit its "tipping point", but I believe it's crossed the chasm.

Facebook's another story.

Their first few thousand users included most of the college kids at the original 13 schools allowed in. While college students are more computer literate than many, most of that audience could not be considered early adopters. I had friends on Facebook in those days who didn't know what a blog was.

Facebook didn't start with the traditional early adopters, or if they did they only started with a small subset of them and didn't stay there long.

Moreover, they didn't even allow in the typical Silicon Valley/TechCrunch 53,651 early adopters in until recently (unless they happened to be in college).

Now, after Facebook has launched its API and the tech world has taken notice in a big way of the business opportunity in Facebook, you're starting to see lots of typical early adopters -- tech entrepreneurs and VCs (e.g. Fred, Josh, Roger, Dave, Howard, Andy) -- experiment with Facebook.

What does it mean that the early adopters are giving their two cents only after the early majority (at least among 18-30 year olds) have already adopted?