Wednesday, February 28, 2007

America 'hearts' entrepreneurs

posted by Seun Olubodun
Three decades ago, there were hundreds of people for every one Bill Gates who had excellent business ideas, but no resources to realize them. Not so anymore, according to CNN Money -- entrepreneurs are seizing the day.

Technology is one environment factor that has significantly lowered entrepreneurs' barriers to entry. Today, with so much commerce happening online, all they need to get a company up and running is a computer and Internet access.

Consider the flood of dorm room entrepreneurs. I was one myself. As a junior attending Temple University, I didn't want to slave away at an unpaid internship from 9 to 5 every day. Instead, I started building Web sites for family and friends -– a much more fun, flexible, and lucrative operation.

Within a year, my little side project grew into a full-fledged design company called Element Web Solutions, employing a team of part-time staffers. Our apartments doubled as offices, because all we needed were computers and the Internet.

Such casual surroundings belied our serious work. We built corporate identities and branding campaigns for over 70 small to mid-sized businesses, including law firms, restaurants, private hospitals, non-profits, construction companies, and real estate developers.

You might find my story unique. But I wasn't the only one with the bright idea to start an online company. Hundreds of other Web design firms popped up all over the place, run by kids just like me.

Now, how many of those shops are still open today? Only a handful. This disappearing act proves one of our most important IncPlace maxims: Flashy ideas are great, but they need strong business models for support.

Still, my personal experience shows how online capabilities have helped ambitious, creative entrepreneurs hit the ground running. The question now becomes, how do they keep from tripping in a risky, rocky marketplace?

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Tuesday, February 27, 2007

Taxing YouTube

posted by Andy Leff
No, I'm not suggesting we place levies on YouTube (though it is as addictive as nicotine). I'm talking about the TurboTax Tax Rap contest, featuring Vanilla Ice.

This is a terrific example of business embracing viral videos. Granted, the rap is ridiculous, and Vanilla Ice is a no-talent hack, but numbers speak louder than opinions. This little ditty has generated nearly a million page views ... and the ticker's still counting.

Not too shabby for DIY tax and accounting software. The Turbo Tax takeaway: Integrating Web 2.0 media in appropriate, effective channels brings people and communities closer to the products and businesses they use. And that means more G's for companies.

Word to your motha.


Monday, February 26, 2007

Insecurity wins the race

posted by Ron Leff
Here’s a subject I’ve believed in -- and lived -- my entire 28-year career: the power of insecurity.

I went into the family business full time in 1978. Our company, J.W.S. Delavau, Inc., manufactured high-volume, low-margin nutritional supplements. At the time, we got little respect and even less attention within the industry.

Our facility reflected our spirits. We worked in a 100-year-old, five-story building in a rough Philadelphia neighborhood, with zero capital to invest in expansion or upgrades.

Our bad situation soon worsened. The bank told us we had 60 days to get our act together, or it would pull our loan. Then we lost our top two customers. Insecurity was running high, and the wolves were at the door.

To survive, we had to be innovative and lean. But the turning point didn't come overnight. First, we focused on improving our primary product line, calcium. It generated good press over time, and we slowly gained more business.

This revenue let us buy better equipment. We refined our unique processes, and increased throughput by 50x. We also recruited better management personnel, and hired people with deep experience in larger pharmaceutical companies. And we moved our facility to a new building, finally gaining full control of our process, product, and costs.

The industry noticed our 180-degree transformation. Soon, we attracted branded pharmaceutical companies to buy from us, as we were one of the only companies that could meet their standards. This established us as the low-cost producer with high-end quality.

Ultimately, we became the most profitable company by percentage in our industry, employing over 400 people. Our reputation as innovators preceded us; other firms clamored to see how we did it. In 2002, an LBO firm in New York acquired us, with the promise to expand on the company's upward movements.

Step by step. Inch by inch. Lot of crossed fingers and holding breath. As the company's key decision maker, I was responsible for keeping the house of cards erect. But even at our most successful period, I never shook the mindset that it could crash at any moment. I did not want to go back to the “good old days” -- truly some of the worst in my life.

These fears and insecurities focused me on keeping a competitive edge. Without the early challenges, I could not have forged the company -- or myself -- into our ultimate successes. We were always out to prove that we were as good as or better than every other company in the industry. And it turned out we were, thanks to hard work and sheer grit.

As my life experience shows, insecurity is a great motivator, especially when you understand it, and know how to leverage it. Remember, though, to temper your fears with belief and confidence in your abilities. Otherwise, you'll be crippled before you even enter the race.

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Friday, February 23, 2007

Startups finish first

posted by Seun Olubodun
I’m a Yahoo! fan -- have been since its early days as a leader in online innovation. In the Internet's youth, Yahoo! embodied what it meant to be an Internet success, similar to YouTube's status for the Web 2.0 era.

Today is a different story
. Smaller startup companies are succeeding, while Yahoo! sits at a standstill.

Why the switch? As Internet companies like Yahoo! grow, they shift their business focus -- a necessary evolution. Yet they also shed the startup spirit that made them successful in the first place.

No wonder, then, that today's entrepreneurs can take on established companies. Their ample supply of startup spirit drives innovative thinking. Their lean teams -- five employees or less -- keep them nimble and creative, which leads to newer, cutting-edge products much faster than at companies with 10,000 people ... like Yahoo!.

Google is a rare exception for large companies. They have sustained the startup environment throughout rapid growth. Also, they're well-known for hiring the very best people, and giving them a comfortable place to brainstorm day and night -- an approach that keeps them ahead of the pack.

With such high consumer expectations in this Web 2.0 era, company size no longer matters. Rather, a company must recruit forward-thinking, creative people, and focus on building innovative products.

If a company can make life easier, cheaper, smarter, or better, they will change the way people function. That's what will set them apart, and put them ahead.

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Thursday, February 22, 2007

Microsoft vs. the world

posted by Andy Leff
Microsoft is having a terrible, horrible, no good, very bad day.

Google just released Google Apps, a cheaper, Web-based software suite backed by Google's clout, and perfectly positioned to dent Microsoft's monopolistic armor. The Bill Gates Behemoth also had to pony up $1.5 billion to Alcatel-Lucent SA for violating two digital music patents.

I never advocate kicking somebody when they're down, but I find these head-to-head challenges strangely satisfying. It's the age-old tale of David versus Goliath, the underdog taking all. And in light of recent behavior, Microsoft deserves every punch.

Consider the hubris of the Vista launch. The company slotted the product for a midnight release, presuming the masses would come in droves to pick up new operating systems. (Apparently, no one told customers that in Raleigh, N.C., when only 12 people showed up at an overstaffed CompUSA.)

The marketplace response has been similarly underwhelming. BusinessWeek reports:

During its first week on the market in late January and early February, U.S. retailers sold 59% fewer copies of Windows Vista than they did of Windows XP during its first week of sales in 2001, according to market researcher NPD Group. Dollar sales were down 32% compared with XP. In New York on Feb. 15, Microsoft CEO Steve Ballmer told financial analysts to temper their revenue forecasts from Vista during the company's 2008 fiscal year, which begins July 1, calling them 'over-optimistic'.

For all that, the system has created a ripple effect within the industry. Some ancillary firms are profiting by developing software patches that fix Vista's reported bugs and holes. Yet other companies, faced with the challenge of designing Vista-compatible applications, are bleeding cash. (And let's not even get into the recent death matches with Apple over advertising, Mac rip-offs, and Zune/iPod compatibility. That's another post.)

The takeaway remains the same: Microsoft is slowly but surely falling behind the times, and becoming more vulnerable. In this state, David can take down the most daunting Goliath if he hurls enough stones. Just watch for a few more days like today, and the software giant will be down for the count.

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Wednesday, February 21, 2007

Bon voyage, VC!

posted by Andy Leff
Yesterday, I said India was a magnet for VC tech investments -- and a chief competitor to Silicon Valley. Today, Europe wants to give the U.S. tech hub a run for its money, too.

More VC companies are funding startups outside of the United States as the Internet becomes more popular in other countries. The impetus: bigger bang per buck in places like India and China, where labor is cheap and the standard of living is low.

Now Europe hopes to nurture its own under-developed tech sector by drawing VC funding its way. And if it succeeds, America will be forced to make some changes.

For example, U.S. companies don't bootstrap enough. They waste money on unnecessary line items, when they should re-invest in more strategic company operations and initiatives that actually grow and establish the organization. No wonder VCs are looking outside our borders –- they want ROI, and it's becoming less likely they'll get it stateside.

Foreign investment in Internet startups is ultimately a blessing. It connects global communities, and fosters cross-border collaboration. Even better, it forces U.S. firms to be at the top of their game, and present sophisticated, well-developed plans that truly deserve coveted funding.

I doubt VC firms will ever pull out of the United States entirely. But that doesn't give American companies license to fall asleep at the wheel. They must stay savvy, sharp, and ready for a fight.

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Tuesday, February 20, 2007

India: The next Silicon Valley

posted by Andy Leff
Let's play Word Association: Global Edition. China -- manufacturing. Japan -- electronics. India -- outsourcing.

India's technological savvy and abundance of labor has already drawn many U.S. companies to its shores. Now it is adding more fuel to the outsourcing fire by positioning itself to become the most bandwidth-competitive country in the world, thanks to new government regulations.

This is terrific news for American companies who want to start an Internet-based company or application for less money. Increased bandwidth in India lowers startups' barriers to entry, and saves larger, established corporations more cash. This, in turn, injects good ol' fashioned competition into the global marketplace, keeping businesses hungry and monopolies at bay.

But it's terrible news for American employees who might see more jobs sail overseas. If bandwidth costs drop 20 percent to 25 percent as predicted, new hosting companies will spring up all over India, and offer significantly cheaper services. This is likely to put smaller, U.S.-based hosting operations out of business, sending employees to the bread line.

Either way, India will reap rewards. Many VC firms are investigating investments there, giving small Indian shops the big funding options U.S. firms currently enjoy. Couple this cash flow with the drop in bandwidth prices, and India is poised to become the next global tech hub, joining South Korea and China as early tech adopters.

I can picture the new word association now: India -- Silicon Valley. The change is closer than we think.

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Thursday, February 15, 2007

A not-so-Comcastic idea

posted by Seun Olubodun
Same news, different impression. (Andy can't have all the fun!) Here are my two cents about the Facebook-Comcast deal.

It was only a matter of time before this happened. The unexpected success of viral videos make the network and cable giants salivate over the millions of eyeballs at stake. Comcast's solution: Team up with Facebook to offer user-generated video content on demand, so viewers bypass YouTube, and instead watch the same content from their couches.

Some in the industry call this groundbreaking. I call it stupid.

Putting these videos on television bypasses the most important component of viral video success -- the online community. The ability to network, share, tag, network, post, and comment is what gives videos such tremendous visibility.

Let's be honest ... Most YouTube videos are idiotic. Many involve bodily harm or bodily fluid. And don't forget the videos of grown men dancing to Spice Girl records in their bedrooms. (Yes, that is me, and yes, 'Wannabe' is an awesome song. No judging.)

But factor in viewers' boredom and natural voyeurism, and you've pegged the power source for the viral video phenomenon. Soon, people are watching countless hours of these videos, reading every comment, and forwarding the whole schmeer to equally bored yet connected friends. The videos simply appear in inboxes around the world -- no fuss, no work, no problem.

How can this ever be replicated on television, a non-Internet medium? People will have to work for their cheap entertainment. They'll have to turn on their sets, scroll to the viral videos section, and make a conscious decision to watch me act like Scary Spice. (Really ... once I'm in a dress, the resemblance is uncanny.)

If they make it that far, then they'll have no one to share it with, no place to leave feedback, and no way to instantly pass it along. And Comcast will have wasted valuable time, money, and energy on a easily avoidable concept if someone had simply sat down and considered its feasibility.

At least my impression of Scary Spice won't meet the same fate as Comcast's Facebook content. I'll be delighting (or disgusting?) the online masses for generations to come!

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Wednesday, February 14, 2007

Beware the 'Gray Hair Effect'

posted by Andy Leff
Last word on my recent Facebook and follow-up posts, I promise. The soapbox has one more good rant in it ...

‘Young’ does not equal ‘stupid.’ Yet many people believe it does. I call this phenomenon the Gray Hair Effect, a.k.a. ageism. Or in this case, youngism. Because I’m not talking about discrimination toward senior citizens. I’m talking about discrimination toward younger business people.

I’m 25. I have a start-up venture to my name. I’ve worked as a partner in my family investment firm. Usually before I meet with someone, I call them, introduce myself, shoot the breeze, discuss the agenda -- anything to make the meeting warmer and more productive later.

Then I show up. Here, the Gray Hair Effect comes into play. The same person I just spoke to on the phone will ask, “Hey, where’s your boss, Andy? You know, that guy I talked to on the phone?”

And God forbid I arrive with an older partner. Then most conversation is directed toward them -- even if I’m the one asking the questions. It’s like a bizarre, late-in-life interpretation of ‘children should be seen and not heard’.

I recognize that most people who hold power positions in companies tend to be older. After all, it often takes time, education, and experience to reach positions with greater responsibility.

What I don’t understand is their negative attitude toward younger businesspeople. Why should anybody care how old you are when dealing with business? The last time I checked, some of the most successful people in the world started off young, particularly in the Web 2.0 world.

Some fast facts:

* Michael Dell started his computer company in his dorm room at University of Texas at Austin. He was 19. He is now a billionaire.

* Sergey Brin and Larry Page at Google started a search engine when they were in their mid-twenties. They are now two of the richest people in the world.

* Chad Hurley, Steve Chen, and Jawed Karim started YouTube -- that’s right -- in their twenties.

* Tom Anderson and Chris DeWolfe were in their twenties when they founded MySpace.

* Facebook founder Mark Zuckerberg was 19 -- another dorm-room upstart.

* Kevin Rose of was on the cover of BusinessWeek. He’s now 30.

Let’s face it: Age is no longer a prerequisite for success. Good ideas are good ideas, regardless of time spent on the planet. The face of business is changing, and it counts fewer wrinkles.

Now I want to hand the mic over to you. Young business people: Have you faced age discrimination in the business world, from peers or from older workers? If so, how have you responded to it? What lessons have you learned?

Older business people: Same questions! Have you faced age discrimination from peers or younger workers? Your responses? Lessons learned?

Go. Type. Respond. In the meantime, here are some tips I follow to combat the Gray Hair Effect in my own life: (Though I think this is sound advice for any age group.)

1. Be a domain expert. Know what you’re talking about. Do as much research as you can on the topic you’re meeting about, especially if you’re pitching a business idea. The more facts and figures your grasp, the more respect you will command in a business situation.

2. Practice your presentation. Never go into a meeting cold. And please, don’t open with a cheesy joke. This shows lack of confidence and originality in the presenter.

3. Observe your body language and the audience’s body language. When someone is speaking to you, lean in towards them to show your interest. Conversely, avoid sitting back in the chair with crossed arms -- an indicator of insecurity and disinterest.

4. Use your hands when speaking. Count ideas on your fingers. Point to people you connect with. Bang your hand on the table to emphasize a strong point. Scan the crowd, and make eye contact with everyone in the room. And don’t wring your hands -- that screams nerves.

5. Get excited! Raise your voice when you are making a strong point about your product. Emphasize ideas that catch the attention and imagination of your audience. If you’re not engaged in your own work, how can you expect anyone else to be?

6. Ask questions. This counts even in lousy meetings. You never know what tidbit of info might be useful later. Keep your ears open, and write everything down.

7. Don’t burn bridges. Swallow your pride when necessary, however unpleasant it might be. None of us have crystal balls, and we never know whose path we will intersect later in life, or in what capacity. The more polite and professional you remain, the more willing people will be to work with you at any point.

And one final caveat to my peers in the business world: Time does not stand still. I already count 15 gray hairs on my head. One day, we’ll be the older workers, and a new generation will be complaining about us. So let’s remember where we came from, and snuff out the Gray Hair Effect forever.

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Tuesday, February 13, 2007

MySpace: Storefronts or whorefronts?

posted by Seun Olubodun
MySpace hosts over 100 million active accounts. But how many of them are real?

I casually browsed some profiles recently. Don't quote me, but I estimate at least 70 percent of all listed profiles were somehow related to porn, either in content or advertising. Yet scattered among the smut were legitimate business profiles -- law firms, entrepreneurs, musicians, and more -- all using the networking service for its original purpose.

It reminds me of Times Square years ago, when prostitutes, drug addicts, and pimps packed the streets, scaring tourists away. But brave visitors who ventured in anyway occasionally stumbled upon a day care center, a bakery, or another real business -- quite the anomaly in the seedy Square.

MySpace case in point: Roni Deutch (legit biz) vs. Dawn (smut peddler).

After seeing Dawn's profile countless times, I had to ask myself -– is MySpace the behemoth it claims to be? More important, do businesses want to be there?

Yes. And yes. Now pick yourself up off the floor, and hear me out.

MySpace is not an outdated elder statesman of the Web 2.0 phenomenon. It still plays an important role in the social networking landscape as one of the most recognized and extensive online communities available today. And like any tool, it is most powerful when properly used, fostering connection and communication.

However, here's what has to happen to make sure MySpace retains that power:

First, MySpace administrators must crack down on flagrant porn accounts. They exacerbate the issue by ignoring it. The site is slowly turning into a profile trash heap, with actual users lost in the pile.

Then MySpace must reclaim and recommit to these users. This requires caring about them, and seeing them as customers, not just one of 100 million notches on a headboard. It means asking them if they are getting any value from the site, and if not, what the company can do to fix that.

MySpace needs to be Rudy Giuliani. It needs to clean up its act for the good of its own business, and for all the smaller shops that depend on it for social networking. Otherwise, the real users will drift away to one of the countless new networking sites that pop up daily -- and not return.

Unless, of course, they're looking for porn.

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Monday, February 12, 2007

Making companies cool

posted by Andy Leff
I'm a younger adult -- 25, to be exact -- and I'm a small business owner. This helps me see both sides of a touchy subject: older companies reaching younger audiences.

And talking about Facebook's deal with Comcast the other day got me thinking about concrete ways businesses can avoid the corporate stigma, and foster genuine 'cool' in their outbound communications (Web sites, marketing, advertising, etc.).

My first piece of advice to older generations: Whatever you see on MTV, or read in a teen-geared magazine, DON'T USE IT. Young people can immediately tell when somebody older is trying to act younger.

I experience this everyday. I can't hide my age when I go to business meetings. In response, older people in the room dumb down concepts and conversations, assuming I won't understand them. Worse, they start using outdated terms like 'gettin' jiggy with it', 'wazzzzzzzup', and even words such as 'rad', 'sweet', or 'badass'.

Forget about me and my peers ... even my parents don't use those terms anymore. It's not impressive to do so. In fact, it's embarrassing -- so much so that I tell all my friends how moronic most corporate suits are.

Opinions and approaches are bound to conflict between generations. However, one element remains constant -- respect. Treat youth with respect, and you will receive it right back.

Honesty falls into that category, too. Don’t market yourself as a company or product you're not. Be comfortable with your company's goals. Don't try to appeal to the group; rather, be transparent about your goals, and how you want to serve us. Youth will appreciate and respond to your candor.

And if you really have to look 'cool' to youth, say for a Web 2.0 service or network, then ask them what they want. Conduct focus groups with them, but without pandering. They will tell you if they like your idea or not. Use this information to fine-tune your product or service.

Final word of wisdom: My generation has strong opinions, and we're not afraid to air them. Use this to your advantage. After all, the entire Web 2.0 community would never have flourished if my generation didn’t have anything to say, or the liberty to say it. So let my generation speak without imposition and censorship, and you will begin to look cooler than you ever dreamed you could be.

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Sunday, February 11, 2007

Conspiracy theory #2: Two-faced Facebook

posted by Andy Leff
Proof there really is nothing good on TV: Facebook is teaming up with Comcast to create a TV show based on user profiles.

Thankfully, no one is going to watch it.

MySpace tried the same tactic last summer with their show 'Project MyWorld'. It featured hot girls driving around in a bus looking for people who had the 'best' MySpace profiles, and interviewing them on why they loved MySpace so much. But I just checked local listings, and this show is definitely MIA. Or, more accurately, DOA.

It failed because it wasn't authentic. And Facebook will suffer the same fate for the same reason. I can picture the train wreck now: Ed Snider, wearing a Facebook T-shirt, delivers speeches where every other word is 'dude' or 'cool' ... because that's what the youngins' want to hear!

In this case, corporate giants at Comcast are pulling the strings to make the Facebook puppet dance. They desperately want to be cool, hip, smooth, edgy -- anything to get in front of today's youth.

But that over-eagerness is driving their coveted audience away. Young people are not stupid. They can spot a poorly executed corporate strategy from a mile away. And they want nothing to do with corporate big wig posers.

I'm surprised Facebook creator Mark Zuckerberg is being so compliant. He himself is 22 years old. He takes great pride in not looking too corporate. He shows up at professional functions wearing a suit and Adidas flip flops.

This says 'I don't give a s***' loud and clear to Wall Street. And to an audience comprised of high schoolers and college students, that is true cool.

If (when) this proposed TV show tanks, Facebook will long for the days it could have sold the biz to Yahoo! for $1 billion. And it'll have to face all the front-page press about the program's dismal failure, just like it did when it added the much-maligned news feed system last year. (I think both events are PR stunts designed to stir debate and heighten awareness, but that's a conspiracy theory for another day.)

Then again, PR might be Facebook's one redeeming outcome in this whole fiasco -- and Zuckerberg's real intent. It's another opportunity to blast its name out there, grow more viral, and draw more users to the site. I've heard it didn't experience the hoped-for surge of members when it opened their service to the outside world last September. Most members are still in the school crowd.

If increased sign-ups are indeed Facebook's goal, then the deal with Comcast is a boon. It will help it create effective viral videos to pass through countless e-mail accounts, and create greater buzz for new members.

My final grades for Facebook: 'A' for adding video to its site, 'D' for letting Comcast convince it that a TV show would be 'totally rad' -- a.k.a., remotely a good idea.

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Wednesday, February 7, 2007

Google in bed with Apple

posted by Andy Leff
One more thought about conspiracy theory #1. (Sorry, I just can't turn my brain off about this stuff ...)

Another turn of events that wouldn't surprise me: Google leveraging their warm relationship with Apple to achieve total video domination.

Let's follow the trail of bread crumbs: Google CEO Eric Schmidt sits on the Apple board. Apple sells full-length movies online through iTunes. Once Google owns the short video clip market, it'll want to move to streaming full-length movies.

Hmm ... you smellin' what I'm cookin'? It wouldn't be hard for these media behemoths to craft some sort of mutual profit share, and offer full-length movies for download over YouTube that leverage iTunes' well-regarded DRM and installed base of 88 million iPods.

This, in effect, will give them yet *another* way to monetize their services ($en$ing a trend yet?). Moreover, the natural extension of the user-generated video would be an actual, 'cable-esque network' that lets Google go up against the ABCs, NBCs, and CBSes of the world.

This would pressure traditional networks into signing up for Google video services and live TV content, because they would have no other way of competing with Google and their followers.

It's been widely reported that the large networks already have relationships with Google. And some networks (Fox Interactive and NBC) were believed to be in partnership talks to acquire a video sharing site (Metacafe) to battle Google in the market.

But I don't see how any media company, large or small, can win that battle, because all the eyes -- and the ears -- and the dollars -- belong to Google.

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Tuesday, February 6, 2007

Is Web 2.0 a no-go?

posted by Andy Leff
Is Web 2.0 getting out of hand? The answer: A definite maybe.

Look at this list of Web 2.0 companies. Many have received mainstream press coverage by piggybacking their business plans off of MySpace. Or, they offer a service so entrenched in a niche market that there is no significant potential for sustainable, profitable business plans.

Take They have received millions in start-up funding. But all they do is make a slide show of pictures that you can post to your social network account after adding some Flash-based text. Why does a company whose main product is a glorified widget need millions of dollars??? (Whatever pixie dust they sprinkled in their business plan ... I want it.)

I'm not alone in my incredulity. Companies like are the reason why many bloggers and analysts believe there is a new Internet bubble growing -- a dot-com redux.

There's one key difference between the two bubbles, though. In the Internet's early days, dot-coms were going public with no substantial revenue base. The hype would build for these companies (classic example:, and many speculators would invest, thinking, 'Everybody else is doing it -- why shouldn't I get rich too?'

As a result, much of the general public was invested in these companies, which then crashed. All hell broke loose. People lost their shirts. Women wept. You get the idea.

I doubt that will happen in this Web bubble. There aren't really any huge IPOs happening. Plus, the major business strategy appears to be 'let's sell our application to Google'. (Brilliant! Never been done!)

Let's take another look at the list. Many companies on here do have interesting ideas, and are using new community-based functions to their advantage. MySpace, YouTube, Craigslist, Facebook, Webshots, and Flickr are obvious stand-outs, with plenty of room for future monetization.

These companies also prove there is room for multiple community-based applications in the market, each generating revenues while offering most of their services for free. And with the growing double-digit rates in advertising spending, these sites will grow right alongside.

But what happens if the advertising market finds the hot new thing next week, and pulls ad dollars out of these communities? Web 2.0 will be SOL. Better to set new strategies today, than panhandle tomorrow.

This fancy logo chart screams one thing above all: Barriers to entry for a Web-related business have drastically dropped since the early days of the Internet. Anybody with a good idea -- or even a bad idea -- can go out, spend a thousand bucks, and put their site out there to see if it sticks. The problem is, they don't ask the most important question: How will it make money?

So, is the Web 2.0 market over-saturated? Maybe. The mere existence of a Web 2.0 site like -- one that makes money by compiling other Web 2.0 sites -- gives me pause. Stay tuned over the next few months: I guarantee you'll see more of these companies closing their doors, because they'll finally realize a good idea isn't enough to keep the lights on.

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Friday, February 2, 2007

SuperPages' social network far from super

posted by Andy Leff
File this news under "Right Idea, Wrong Way": SuperPages just launched 'Reviewer of the Week', a competitive program intended to spur user-generated content and reviews.

Too bad it's doomed to fail.

Nobody is going to make SuperPages their destination place for social networking. It's too corporate. Hell, it's a phonebook.

The company is making an artificial social network because 'social network' is the buzzword of the day. I see this turning (and burning) out the exact same way Wal-Mart's social network attempt did: as straight garbage nobody cares about because the corporate entity controls everything.

In fact, that's the No. 1 reason such contrived networks fall on their faces: People can't get a sense that their input is valuable or valued.

People typically don't want to help large corporations. They consider them money-grubbing giants, which is why Google had the whole "We're not evil" lobbying campaign going.

A million to one, people want to help other people -- namely, their friends and community. And they are not dumb. If a company tries to create a false sense of community, their audience will know.

Yet this seems to be where SuperPages is headed. I certainly don't see 'Reviewer of the Week' as a threat to organic, vital, honest social networks. It's only a cheap marketing ploy to get viewers to the site.

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