Want to know what web 2.0 superstar business to start? Here’s some criteria:
- Gives or saves me time and/or money
- Is an online equivalent of an offline phenomenon. The social revolution and FB platform is largely built upon building the online equivalent of something we already do (or WANT to do if it were socially acceptable) in real life.
- A new technology adjusting an existing solution. Farecast builds on Kayak, Sidestep which built on Expedia, Orbitz, Travelocity. Like.com builds on comparison search engines. Good CS and Engineering research institutions are good places to look here. Two Stanford CS PhDs a few years back had a pretty good technology too.
- Fill a niche that current providers don’t. To some extent, a niche social network can exist if it solely serves its community and serves it significantly better than the rest. Content sites can be successful when they provide valuable resources: CNET, Glam Publishing, Sugar, TheKnot. To build a big business, it needs to be a sizable niche. You want to be able to either expand into other niches or further exploit the niche you are in.
- Opens up a technology. Linux, MySQL. Of the current startup hot shots, I would say Ning can be wildly successful because of this theme. (Ning is also one of those cases of such talented management that it will be successful almost no matter what.)
- Gives back to the community. Successful exits in MySQL, success of Mozilla/Firefox and their ability to take on new initiatives such as Weave (aggregating all your user/personal information across all your desktops), usefulness and investment in Freebase/Metaweb as a big bet on the semantic web dream.
This is a pretty wide net. There are plenty of opportunities here. Personally, this is what I would like to see and use. You’d be surprised how many businesses don’t pass any of these tests.
But here’s the kicker: not every business fitting above is a good business. If you want to find a good business, you’ll have to stick to the basics: margins, volume, competitive space, growth in sector. There is a difference between interesting and a good business.
What if you have all of the above? Well, execute, spread your idea and acquire users. Easy enough ;-).
Deciding where to dedicate your time is an important one. Choose wisely. Have fun!