RockDr’s Web Log

These are my notes from a talk at the Future of Web Applications conference.  From a purely financial point of view, it’s a good survey of “Web 2.0″ companies, who is making it and who isn’t in the current second-generation web boom.

Topic: Winners, Losers, Companies to Watch

Speaker: Michael Arrington - TechCrunch

Win = liquidity event, goes public or gets bought

winners

• writely
• grouper
• bloglines
• myspace
• weblogs, inc
• flickr
• skype
• userplane
• del.icio.us
• newroo
• ksolo.com

very good bets

• digg
• facebook
• youtube - estimated to be worth $2 billion
• photobucket - put your pictures up, also video, not a destination site but you move them to a myspace, 2% of US internet traffic
• zoho projects - web 2.0 online MS office competitor
• stumble upon - growing by leaps and bounds
• popsugar - blog , celebrity gossip kind of thing, team of 5 people, power of blogs as a new publishing platform
• plenty of fish - dating site, run by 1 guy, total jerk, $300,000 per month off adsense alone
• netvibes - french company, raising funding, grew fast with no resources, ajax home page is what caught people’s eye and got them noticed

ones to watch

• jobster - lots of funding
• riya
• zillow
• flock
• sharpcast
• rocketboom
• 1-800-free411  (telephone number) - 12 second ad, but otherwise free 411, now 3% of us 411 calls
• oDesk
• SecondLife
• WordPress

 

what in the world were they thinking?

• inform.com - massive funding, wealthy founder, big co. news aggregator site with glowing NY times review, everyone else slammed it.   no traffic,  spent tens of millions
• gather - raised 8 million, entered a very crowded market, fighting a two front war, news (google news, newsvine) and trying to get advertisers
• pubsub - blog search engine, great tech, great co., two founders didn’t get along and they ripped the company apart, one founder had a profitable sale but the other killed it
• browzar - wonderful coverage, particularly in UK, new secure anonymous browzar, but people started looking at it and it was really just a shell on IE that was malware,spyware; could have launched with fewer promises and might have been OK
• squidoo - didn’t catch anyone’s eye, broken revenue model from the start, revnue so low they wrote ridiculously small checks to people
• jigsaw - a company that he’s called evil, one of the few evil companies actually funded by venture funding, people get paid for putting your business card info on the net, and then jigsaw will sell it to all comers; he believes it is allowing people to break a social contract;

 

Winners & Losers: Shared Attributes

Shared attributes of winners (other than the fact that they
won)

• passion for what they are doing - (opposite is MBA’s with a business plan that don’t even like what they do)
• doing something extraordinary (Purple Cow) - it catches people’s eye
• removing serious friction - making some process more efficient for consumers or business
• great founder dynamics - the team gets along - failed companies almost always say they hired to fast, hired the wrong people or they (hire slow, fire fast)
• never raised big money or raised it after they won
• perfect revenue model not required (e.g. youtube)
• and - launched their company with a post on TechCrunch of course

 

Shared attributes of losers

• poor founder/ team choices
• lifestyle / ego entrepreneurs
• raised too much money
• spent too much money
• forgot about scaling (e.g. friendster)
• over business-planned

---

 

What Server Platform

• PHP (most popular)
• RubyonRails (upcoming, but starting to see limitations)
• Java (serious applications)

Client

• .Net/ActiveX (no Firefox)
• AJAX (monster)
• Flash (growing)
• XUL/XAML (interesting)
• Adobe Apollo !!! no disparity between online and offline
  application

Market Saturation - what areas are still ripe for new companies &
products

Avoid:

• Social Networking - have to be pretty successful these days
• Social Bookmarks - (e.g. digg)
• Video - too many sites, 250 or more
• Photos
• Blogging./podcasting
• Portals/homepages
• Feed readers

Big potential:

• Platforms

• Desktop apps to Online - w/Ajax, Apollo

• Office Efficiency - in general, e.g. echosign

• Cloud Storage - omnidrive, many others, google, microsoft

• Identity -

• Developer Tools -

• Market Destruction - take someone else’s market away from an entrenched player

• ENTERPRISE - web 2.0 is working backwards, consumers are getting the good stuff first (VOIP, IM, etc.) launching a blog in this area from TechCrunch - salesforce.com is an early example

 

NOTE: Best entrepreneurs avoid this type of advice i’m giving you entirely:  Invent a new market!!!

 

Questions &Answers

-outsourcing? : always hard.  no one has a good experience with elance;  New service odesk similar to elance but it works takes a picture of person’s screen six times and hour and so you know if they’re working, if not they don’t get paid

-desktop vs. online?: thinks there’s still a big place for desktop superior storage and functionality, online is good for collaboration and sharing

-enterprise class?: he would advocate building on salesforce.com or something similar

-NY times just doesn’t get the web, so any company that launches there automatically pisses him off

-shopping?: really likes amazon and doesn’t see how people will compete