Web 2.0: 24 Minutes In Heaven

I enjoyed the TechCrunch video, Web 2.0: The 24 Minute Documentary. It's nice to see the entrepreneurs behind these companies in video-form showing their personalities. Good stuff and timely topics.

It featured the following folks: Aaron Cohen (Bolt), Scott Milener and Steven Lurie (Browster), Keith Teare (edgeio), Steven Marder (Eurekster), Joe Kraus (JotSpot), Jeremy Verbaa (Piczo), Auren Hoffman (Rapleaf), Chris Alden (Rojo), Gautam Godhwani (Simply Hired), Jonathan Abrams (Socializr), David Sifry (Technorati), Matt Sanchez (Video Egg) and Michael Tanne (Wink).

They addressed the following questions:

1. What is Web 2.0?


2. Are we in a bubble?


3. What are the business models that will work on the web today?


4. What is the role of publishers in a user generated world?


5. How important and how big is the early adopter crowd?

Photobucket hosts the video:

Clearly should have taken longer than 24 minutes to go through these questions. There's much to cover. The video is well worth the time to view, however.

For my money, from a simple-man's view, some quick answers from me:

1. What is Web 2.0?
   It's certainly not a web application built with AJAX. That's a technology. Let it go. Can we stop with all the AJAX talk now? This is a moniker, a meme. I care more about the business models. Let's just think of Web 2.0 as Tim O'Reilly wanted us to think about it and move on to business models: Web 2.0 is the network as platform, spanning all connected devices; Web 2.0 applications are those that make the most of the intrinsic advantages of that platform: delivering software as a continually-updated service that gets better the more people use it, consuming and remixing data from multiple sources, including individual users, while providing their own data and services in a form that allows remixing by others, creating network effects through an "architecture of participation," and going beyond the page metaphor of Web 1.0 to deliver rich user experiences.
   


2. Are we in a bubble?
   I was up-close and personal during the first Internet Bubble. Are we in one now? Absolutely not. Not even close. Yes, there is a ton of VC money out there right now, but the IPO markets are largely closed, except for the best companies, which is how it should be. The M&A multipliers are reasonable for the most part (yes, there are some amazing exceptions, but there always will be). VC's are over-valuating some of their investments today (both Series A and follow-ons, which I will cover shortly), which is bad, but it does not appear to be out of control. Compared to what I saw in 1996-1999, I feel very good about the industry as a whole right now. It's a good time to be an investor and a good time to be an entrepreneur.


3. What are the business models that will work on the web today?
   There are many business models that are working. How many are making Big Businesses? Um. Not so many. Bringing eyeballs to ads served up by Google AdSense or Yahoo Publisher Network is really not a scalable business that should receive VC funding. I'm sorry. Yes, you can make a decent income and can even now get to a cash-flow positive small business with relative ease (compared to Web 1.0 days), but you will never have the opportunity to be a public entity. Business models that can leverage The Long Tail of Web contributors who deserve to get a piece of the action because of their authority or want to build a small business around a viable community marketplace/platform will build the most scalable Big Businesses.


4. What is the role of publishers in a user generated world?
   I don't see fundamental change happening for the publishers... yet. The user-generated world has allowed everyone to become a publisher, to some extent. Voices are being heard now that never had been heard before. This is a great time to have a voice and deliver your message. However, building the hits is still largely the domain of the professional publishers with the retail reach. We still have not fully disintermediated these industries. Be patient, though. Publishers are redefining themselves - they have to. That's what makes this all exciting. The winners will be the ones that find a way to identify and leverage the most authoritative voices within the masses, and can package those voices in their existing channels (or, can build new channels).


5. How important and how big is the early adopter crowd?
   As important as they have always been. No more, no less. For startups and the Venture Capital community, it's always about timing and execution. The early adopters often are too early. They are ahead of their time, run too fast, and miss the big market opportunity. Fast followers often have the advantage to out-maneuver the earliest of the early adopters. There's more churn now. That's great.

Unfortunately, the video was filled with the usual high-level speak and not a lot about the business of these businesses. I'd love to see a follow-up that focused on the factors required for each of these guys to become Big Businesses, how they think about their exit, and the business model aspects of how they differentiate their offering from the 30 other companies in their space.

Tags: TechCrunch, Web 2.0, Startups, VC, Venture Capital, brianberliner