This idea that the social media bubble is "quietly deflating" because venture capital money has gone elsewhere has not taken much account of why venture capitalists invest in certain companies. From 2010 to 2012 social-related start-ups got 6 percent of VC funding, while this year that has dropped to 2 percent. To Bloomberg Businessweek's Joshua Brustein, that indicates the end of the social media craze. But, that theory treats the interests of venture capitalists as real, substantial shifts in the economy, when really they have more to do with buzzwords at conferences than anything else.
To attempt to illustrate that point, we looked at how South by Southwest Interactive panel titles in all their buzzwordy goodness correlate with this trend in venture capital spending on social. The height of the social media craze came back in 2011, according to Brustein, during the "social media money boom." That also happens to match up with the use of social-related terms in panel names at South by Southwest, as our graph below shows.
As you can see, the percentage of panel names with words like "Twitter," "Facebook," and "Social" was much higher in 2011 than this year, which might explain the drop in VC funds—a trend the media also noticed, declaring 2013 the year that the terrible SoMoLo (social, mobile, local) era finally ended. Similarly, as start-up funding has continued apace, so have the panels about start-ups.