"Everyone wants to be Johnny Appleseed," an executive at one of NY's biggest VC firms told The Observer earlier this week, punning on early stage investments, also known as seed funding. "The mentality is, you're going to strike out a lot, so you better have a few companies that pay off huge."

Fred Wilson took to his blog this morning to argue that it's bad business to invest in a ton of companies, expecting most will fail and some will generate huge returns.

Startup returns are not bimodal. They exhibit more of a power law curve. There will certainly be one or two venture deals every year that generate 100x or more. And there will certainly be quite a few total busts. But there are a lot of outcomes in the middle of those two. And you can make a great return investing in startups without being in the 100x deal.

Wilson published this chart of Union Square Ventures' current returns on their 2004 fund to illustrate this point. Over the past 15 years, he argues, he's made a name for himself without investing in a single huge winner.

Wilson's advice to newer VCs is to avoid the trap of trying to invest in every deal, because invetably you'll miss some and make a lot of bad bets in the process. "I've spent my entire career playing the middle ground of this curve."

Of course Wilson, who invested early in growing giants like Twitter and Zynga, doesn't mind admitting he sees a few home runs in the the future. "With the exception of Geocities, which my partner Jerry led at Flatiron, I have never seen a 100x return. I suspect our first Union Square Ventures fund will change that."

bpopper [at] observer.com | @benpopper

Why have you not submitted an article or photo gallery to Seed (select all that apply)?

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Indeed, fear of rejection is daunting! We have experienced it on numerous occasions, although none Seed-related. But might a sufficiently compelling motivation overcome such anxiety?

What kind of recognition/incentive would interest you most? (select one)

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-  Recognitions/incentives aren't as important to me

We wish we could say that recognitions/incentives aren't "as important" to us, but we do like a good rating system.

I refer here to the anonymous Iranian upon whom, last week, was bestowed a George Polk Award, one of journalism’s top honors, for the video he or she captured of a female protester as she died from a sniper’s bullet during last year’s Green Revolution. The woman, Neda Agha-Soltan, instantly became a national martyr and international cause célèbre. The identity of the individual who immortalized her death—described in the citation as “a brave bystander with a cell-phone camera”—is still unknown, but there’s no reason to think he/she was anything other than a civilian.

The selection was received as a statement—about the democratization that needs to happen in Iran, yes, but also about the democratization and decentralization that’s already happening in the news business. At the risk of giving too much credit to a bunch of awards-committee grandees, there’s an important lesson here. In the latter half of the last century, journalism mutated from a relatively prestige-free trade into a hoity-toity profession that, like medicine and law, involves graduate degrees and six-figure salaries. But journalism is not a profession, or even a trade, really. It’s an act. And anyone who performs that act is, at that moment, a journalist.

>>RELATED: TIMES, HUFFPO EXPAND UNPAID WORKFORCE

This recognition comes as the journalistic establishment slides beneath the water line, taking with it the six-figure jobs necessary to pay off all those J-school loans. And the people benefiting from this aren’t just the amateurs. It’s no coincidence that in the same week Neda’s videographer got his due, the Pulitzer Prize committee reportedly agreed to accept a submission from The National Enquirer for its reporting on John Edwards’ extramarital monkeyshines. Tabloid reporters are historically the untouchables of the journalistic caste system, too sullied by the trash-sifting work they do to move anywhere but down the food chain. But that was in the old days, when the logo on your business card meant a damn.

In essence, the market for acts of journalism has gone from a cartel-based system to something approximating free enterprise, where it’s the value of the goods themselves that matters, not the reputation of the vendor. That, in itself, is a great thing. But it has some unnerving implications. Start-ups like Demand Media and Associated Content are taking the free-market ethos to its logical conclusion, producing content based on algorithms that calculate consumer demand and sourcing the production to a far-flung network of low-paid freelancers. (AOL, my primary employer, has a venture called Seed that operates on similar principles.) To say that professional journalists are skeptical that such “robo-content” can ever replace the work of experienced full-timers is a vast understatement. But plenty of smart people think otherwise. Betsy Morgan, the former CEO of the Huffington Post, tells me she believes the new-breed content farmers could do to legacy media companies what the Japanese did to American automakers in the 1980s, undermining their economics forever. “Demand is well positioned to migrate up market with their content as Toyota did with their car models,” Morgan says. “That’s where things could get interesting for the established brands.”

As someone who’s still using his old-media salary to pay off school loans, I hope Morgan’s wrong. But I wouldn’t bet on it.

Jeff Bercovici is the media columnist for AOL’s Daily Finance.

More from Jeff Bercovici:

A.D.D. Men

Tablets from Above

Back in December, he said in an interview that his new employer was "just as much a journalistic organization as The New York Times"; now, he's trying to recruit his former Times colleagues. It seems Seed--the freelance content farm driven by search trends--is in need of "a few good editors."

Wrote Hansell in an email that Gawker obtained:

I'm about to start hiring for two roles.

Seed Editors. These people will work with me to develop ideas for Seed assignments, work with AOL editors, and help review articles as they are submitted. Experience working with a wide range of freelance writers and stringers is important. So is a combination of high editorial standards and the creativity to use new technology and new procedures to creative innovative journalism.

Seed Editorial Assistant. This is a spectacular job for someone just starting out in jounalism who wants to be in the middle of reinventing the field. I need someone filled with ideas and curiosity, with writing and editing skill, fluent in the Internet, comfortable with numbers and spreadsheets, to help expand Seed and the new sites we build using it. AOL, with 80 sites and a growing staff of 500 full time journalists is among the best places for someone to build a career for the future.

With the alternative of building "a career for the future" out of unpaid labor, maybe this is true?

In any case: "This is only the beginning of what I hope will be a lot of opportunities for very creative people," Hansell writes.

This week's Bloomberg BusinessWeek has a piece on AOL's "newsroom of the future."

The newsroom of the future looks like this:

Tacked to the newsroom walls in AOL's downtown Manhattan headquarters are pages and pages of Web traffic data. The numbers tell the growing number of journalists who work there how well their articles are performing and--thanks to the ads that appear alongside them--who's paying the bills.

We foresee no difficulty in attracting very creative people to such an environment.