The two sides of social media…or is it?

I think I may have fallen off of the proverbial deep-end. It seems that the more that is going on these days with the Internet stems from social media. You have new startups emerging each day and to me they seem to be all centered around user-generated content or probably more associated with social media. Everytime you turn around, you see a new app appearing online and now no one ever pays attention to the non-media side. I guess this goes back to the web 2.0 phenomena that everyone wants to be a part of. A few years ago it was all about web design and development, then it’s e-mail marketing, followed soon after by online advertising. The next evolutionary process is no real surprise then.

But going back to the topic at hand…with social media, there are two sides. Everything related to creating a web presence lies with the entrepreneurs and they’re the ones who created the apps we use in our everyday lives: YouTube, Twitter, WhyGoSolo, Facebook, etc. For the regular folks in the world, we don’t care about what happens in the back-end and only care that we have access to the alpha and beta releases before everyone else just so we can blog about it here. But for the entrepreneurs, there is one other side to the social equation.

To successfully have a market online, entrepreneurs are essentially like businesspeople. Wait, let me take that back. They ARE businesspeople. And while they have the masses eagerly awaiting the product and the media, these folks are in need of funding to help in their prosperity. That’s the other side…the venture capitalists. Folks like Ann Bernard, Loic Le Meur, and Facebook creator Mark Zuckerberg all need folks like Guy Kawasaki to help fund their business and it’s often a hit or miss. Or, it’s that there are more entrepreneurs than there are venture capitalists. But once the funding is in place, it’s a race to the finish to get your product out and wind up making millions to cash in the bank.

Am I totally off base here? Are there only two sides to the equation in order to get your application situated and stable to be promoted to the masses? Is it even considered necessary? I’m sure that capital is highly important to get things rolling, but obviously things can’t be the same across the board. Did Guy Kawasaki need funding to produce Alltop? What about Seesmic? Twitter? WhyGoSolo? Is this a fixed equation?