4666a4bcb57d2b3c9e55…

Companies that have the luxury of big investors don’t live by the rules of the market. Like Marc says, it makes it very difficult for those of us who want to build long-term value and sustainable revenues on the web. In turn, the web becomes a playground for VCs and corporations. Those influences prevent open standards from taking hold and hence we don’t evolve as fast as our species can…

If you haven’t watched this, it is right to your point, although from a different angle:
http://omnisio.com/startupschool08/david-heinemeier-hansson-at-startup-school-08

Free is dead!

To tell the truth, I cannot wait for the nuclear winter to hit the US VC market.

I have worked in Internet for years, longer then most. (When I first entered uni was the year the ARRNET , the very first connection to the military run internet happened..

My business partners and I have had many good ideas over the years. But we have been hampered by the fact that, over here in Australia, any good idea has to be making money from the start or within a very short time. Ever since the US has build a Web market based on hype and exit strategy, it simply is not worth putting an idea on the web. It will simply be copied over night by one of hundreds of companies in CA with piles of VC money to keep them going with free services to wipe out any competition.

How often do we see TechCrunch report on how a new Web-Startup is changing its direction “again”. Ie, the ideas not working (Generating enough hype) so looks around for an idea they can copy. They have a better chance then the originator as the originator is probably a real business man and has real business constraints. (ie does not have VCs giving them all the money they want.. On a hope it will become hype, get huge interest. Exit with a lot of money..)

This may not be a bubble. Its not going to burst. There is going to be some kind of correction, and its not going to be pretty.

Take Ning for example. It is simply a Hype based company that serves up a lot of web pages.
I find it difficult to believe companies that give away free services just so you look at web pages that can have a little ad in the corner can be worth so much.
Look at TV and DVR, skipping commercials. It’s a completely devastated industry struggling with the fact people don’t watch commercials if given the tools. Gee, we have the tools to rip out online Ads too. (scary stuff for companies like Ning. Strange the media industry takes little notice of this. They do have an interest in hyping up the companies So…. Gee its not in there interest.).. This is a little unfair as online can better target ads and understand that ads should not annoy. (Annoying ads do better. Main reason why many Ads on TV are annoying. Easy and cheap to make.)
Still, Ning has the right marketing team and is in the right part of the world to generate Hype and raise money.. And the founders know enough about when to bail before it all turns to shit.. And can you blame them.. Its just business. Just not a very moralistic one.
Thats Web2.0 for you.

Cannot wait till its over and real business models based on making money come back into style. I simply cannot stomach the current trend.
James

Thomas