Follow Up [1]: Memorandum Excerpt, Alleged
“Building a Better Boom
… The Internet is exciting again, and once again folks are rushing in. In some categories – like search or social networking, for example – there are scores of start-ups vying for pretty much the same market, and it’s certain that, just like last time, most of them will fail.
But regardless of all this déjà vu, we are not in a bubble. Instead we are witnessing the Web’s second coming, and it’s even got a name- ‘Web 2.0′, although exactly what that moniker stands for is the topic of debate in the technology industry. For most it signifies a new way of starting and running companies – with less capital, more focus on the customer and a far more open business model when it comes to working with others. Archetypal Web 2.0 companies include Flickr- a photo sharing site; Bloglines- a blog reading service; and MySpace- a music and social networking site…
Start-ups are leveraging nearly a decade’s worth of work on technologies that are now not only proven, but also free, or very nearly so. Open-source software can now do nearly everything that Oracle, I.B.M. and Microsoft specialized in back in the 90′s. And the cost of computing and bandwidth? You can now lease a platform that can handle millions of customers for less than $500 a month. In the 90′s, such a platform would have run tens of thousands of dollars or more a month…
Or just ask Joe Kraus- a founder of the once high-flying Excite portal. Excite ran through millions in venture capital, then tens of millions of I.P.O. money, before its spectacular demise [Mr. Kraus had left before then]. His latest start-up- JotSpot, is built on open-source software, and cost less than $200,000 to begin.
Mr. Kraus exemplifies the second reason I believe we are not in a bubble: this time, the financiers aren’t driving. Instead, the entrepreneurs and geeks – often one and the same – are. The lessons of Web 1.0 are never far from their minds, and the desire to create something cool that might foster some good in the world is often equally paramount with the desire to make money. The culture of Web 2.0 is, in fact, decidedly missionary – from the communitarian ethos of Craigslist to Google‘s informal motto- ‘don’t be evil’.
Ah, yes, Google. That brings us to the third reason we are not in a bubble: vastly improved search technologies. Recall that the demise of Web 1.0 was predicated in large part on the collapse of the Internet advertising business – people were spending millions buying billboard-like ads that, it turns out, nobody was paying attention to…”
–John Battelle; Co-producer, Web 2.0 conference; Author, “The Search: How Google and Its Rivals Reinvented Business and Transformed Our Culture”
Related:
NYT Article
Memorandum Excerpt, Alleged
