Take Chris Dixon's post [1] as an example. He's now a VC. He wants to diminish the stigma around talent acquisitions. Why? Because that's how VCs get paid in the vast majority of cases. Those big wins when a company goes public are pretty rare. Big acquisitions? Also relatively rare. Most are 1x-5x "bailouts" I would guess.
Paul Graham's most recent essay [2] was excellent but remember this site exists as a funnel for YC finding teams and companies to invest in.
So, to address Fred's points:
> 1) the consumer web has matured
This is a strange argument. It wasn't mature 2 years ago? 3? Twitter and Pinterest (which he mentions) did get a "standing start".
> 2) the consumer is moving from desktop/web to mobile/app
The trend in recent years has been for startup costs to be going down. $50,000 can buy you a lot of Web development and hosting these days. Labour costs (engineers) are probably going up. Everything else is much cheaper.
Mobile seems to buck this trend. I imagine the cost of developing a Web site plus apps for Android and iOS is significantly more expensive. Well it must be by definition because you still need the Web site (in most cases). It's partly why people will target one platform first (typically iOS).
> 3) the momentum/late stage investors have moved from consumer to enterprise
This is a symptom and it seems to be the elephant in the room that Fred isn't mentioning: the consumer Web space is crowded.
To draw from PG's essay, enterprise has both the "schlep" and "unsexy" factors going for it and it's an area that, depending your market, can be hard to penetrate but also far easier to get paying customers. It's hard to extract money from consumers except for three things: games, advertising and, to a certain extent, hardware.
I've thought for at least 2-3 years that if I were to start a startup it'd be somewhere in enterprise space. The fact that VC funding is, according to Fred, going there too just confirms that.
> But it is a tougher time for early stage consumer internet companies than I have seen since the 2001-2004 time frame.
This to me was the strangest point of all. 2001-2004 were on the whole terrible. But it's still way cheaper now making bootstrapping just that much more viable than it ever was 10 years ago.
To me this is just more evidence that we're not in a bubble because the VC "market" is acting quite rationally. For every Instagram there are a hundred failures and many more acqui-bailouts. Yet many people--too many people (IMHO)--are working on shit that just doesn't matter ("it's a social network... for cats!" as the cliche goes) in a very crowded space and most are going to be disappointed.
What I believe Fred is doing here is signalling that he (and by extension USV) are interested in non-consumer startups. They don't want to come out and say "we're not interested in consumer startups" as that'll put them at a disadvantage when it comes to funding hot startups/teams.
I agree: enterprise and even infrastructure (particularly cloud-related infrastructure) seem to have stronger opportunities than consumer web (IMHO).