Curation: Is a bubble forming?

As the subject of curation takes off Venture Capitalists are funding more “curation” startups which could likely lead to a bubble in this sector.

VCs are beginning to talk publicly about “curation” which means they are telling startups what type of companies they are looking to fund in the hopes that someone will create those companies.

For example, Fred Wilson, the New York-based VC recently wrote about curation:

“I’m a big fan of curation in these services. Twitter has lists. Etsy has favorites. Tumblr has tag pages. These are all variations of curation in services that have a lot of noise in them.”

Steve Rosenbaum, author and founder of Magnify, a curation service, recently pointed out that Yuri Milner, the superstar Russian investor, told the Wall Street Journal:

“I think the next big theme is basically curation.”

It’s becoming a wise strategy to add “curation” to your pitch deck.

But “curation” can be applied in a wide number of ways. It seems that anything that involves some human interaction via a share, ratings, or like button could be classified as curation.

Wilson’s examples of curation are basic features that can be easily to virtually any web service. This means that there are plenty of startups that could just as easily reposition themselves as “curation” companies to attract future funding.

Clearly, curation has to be about something more than simple lists or clicks. For example, Facebook “likes” by my social network aren’t very useful because they are too general and don’t provide much context.

The successful curation startups will be the ones that provide context and are able to deal with everything that you can find on the web, not just tweets blog posts, or video.

So is there a danger of a bubble forming in terms of a coming flood of curation startups?

Yes, but the danger is all on the VC side, for users it’s all gravy — there will be a cornucopia of curation services and choice is always a good thing.

But as in all of these markets, there is a lot to be said for the first mover advantage especially if you have built a large user community. Building communities is tough, it takes time. There are no shortcuts.

And that’s the biggest challenge facing new curation startups: users. Yes, you might get great exposure when you launch and snag thousands of sign ups but next week you are old news — what do you do then? How do you keep users coming back to your service?

You need to invest beyond your development team. You need to invest in targeting the right users in the hopes that they will spread the word organically. You need evangelists, and you need a marketing strategy that moves beyond the early adopter techies because that’s a frighteningly small and a frighteningly fickle group — always ready to move onto the next trendy service.

Your curation service has to be relevant to a broad, non-geek crowd otherwise it will fail.

But that kind of marketing isn’t cheap. The noise level across all media is huge and it’s becoming ever harder to keep punching through the noise and reaching people.

Edelman, the US PR firm, recently conducted a survey as part of its Edelman Barometer report, which found that people need to hear a marketing message five to nine times — and from different sources — before they take notice.

This raises the stakes considerably for any startup, not just those entering the curation space.

The VCs had better start factoring in considerable marketing costs instead of thinking that social media marketing has made marketing (almost) free.