Web 2.0: Dynamics Are Still Misunderstood

30 01 2008

Just read an interesting article in early 2007 about Web 2.0 – Great Investments Required. So much good stuff out there. He follows up the conversation with Changing Ingredients for Web 2.0 Success.

It’s a relatively rehashed argument, so I’ll try not to reiterate each and every salient point. Costs of startups driven down, but clutter means differentiation is increasingly difficult. And there are many good points that are still relevant today. A slow burn, slow grow is also OK. At the same time, you might need to raise money to blow out of the fog of Web 2.0 startups. Mr. Evslin is still very correct in these points.

What’s changed in the past year? You most recently  these dynamics at play in the Facebook App hype, which is slowly starting to die down.

  1. If you’re not taking off and A) you’re not extraordinarily well-funded B) you’re not extraordinarily well-connected or C) you don’t have a strategy to steady growth, then you’re probably too late.
  2. There’s also a general backlash against the “A List” media outlets (blogs, press). It’s another rehashed point. Everyone points to the PR spike, then a fast drop off to almost no traffic. You see fewer and fewer stories hitting the trajectory, and this is likely the reason for the backlash. There are fewer and fewer opportunities that are unsatisfactorily met. It was already risky. With the increased noise and everyone vying for the top outlets’ attention, it’s now incredibly risky and possibly dumb, instead of taking a more fundamental strategy.
  3. There’s mention from Stowe Boyd to enter the “white space” of unmet needs rather than being a “me too”. Devastatingly obvious, but seemingly ignored today.
  4. Timing is everything. In broad strokes, there is no hard-and-fast rule for a lot of this stuff. It’s a chess game with so many different permutations that every situation is different. Just about the only strategy that is most fully destined to fail is the one that simply sits still.

What is this about? What happened to faith?

Because market conditions drive decision making, constantly re-evaluating choices made. Entrepreneurship is never about blind faith – it’s about educated choices, calculated risk. A bubble also means a lot of people will get burned if some of these points don’t get understood quick.

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