Unsustainable Web 2.0 Momentum – Look For Realistic Options

Caterina of Flickr.com, fame writes, it’s bad time to start a (Web 2.0) company now. In a scenario where everyone starting a company and managing to get funded she writes,

You've got $5 million in the bank, and they do too. Their VCs want them to succeed every bit as much as your VCs want you to succeed. This gets you into a horse race, which no one wants: it's exhausting and expensive". She adds,” Web 2.0 isn't all that – she adds its not a rising tide lifting all boats here & points put that Web 2.0 is not the magic bullet some people seem to think it is either. It ain't the features, it's that AND the business

My Take: These views are similar to what I echoed several weeks back. As I wrote weeks back, its time for a reality check on Web 2.0 movement. Web 2.0 is clearly getting disproportionate coverage in the blogosphere. Web2.0 share in the real world as delivering value to business and society is indeed limited - if we look at the enterprise software – they directly are responsible for making the business machines hum and improve- be it airline scheduling, dispatching crude oil or treasury management or powering the stock exchanges of the world. I sort of agree with the view web 2.0 movement lacks meaning & magic. I am fine with already established players like Amazon & Google getting web2.0 tagged – am also fine with finding a productive niche to thrive in the information value chain. Moving forward like in the e-business space, we need to have the wisdom and mechanisms for cross-integrating/leveraging web 2.0 applications for larger benefits – this calls for standards in development, build & integration blocks – all this would come only out of a solid base of web 2.0 apps that get built beneath – truly a tall order given the fragile nature of several web2.0 entities. In this overcrowded and overhyped market, clearly if one is building a product for just the Web 2.0 community, its likely to be headed nowhere- in a small crowded market, the means to get out of the niche segment looks quite difficult. We can definitely see a petering out of the web 2.0 momentum as we see it now and several entities would disappear – but one hope is that out of this something robust and strong might emerge – but we have cut through the hype. In the enterprise software segment, we are now beginning to see good ideas getting funded and enterprises are getting launched. As Ray Lane recently wrote in respect of enterprise software companies, opportunities exist for companies pursuing the innovate – dominate paradigm. Managing to wim angel and VC funding on selling hype alone won't assure a strong business model - essential to success of every enterprise.Moving forward, I believe in general that good companies with robust business models will always get funded and would swim through tides to make it – cool websites with presentable fonts are not necessarily ones with good business models.