A pretty interesting post by Russel Beattie, WTF 2.0. Basically he’s wondering why there aren’t more actual business models “built in” Web 2.0 apps.
But let’s think of some of the popular new site launches lately… web chat and IM comes to mind. WTF is the business? All those Map mashups out there? WTF is the business? Calendaring and Ajax desktops? WTF is the business? They’re just FEATURES built on top of other company’s APIs, adding very little real value, and not making a dime of profit.
True and not so true. When webapps are started specifically as a business, he’s a 100% right. However, I think what makes it possible for so many apps to launch and a big reason for the current bubbly atmosphere is that it’s super frickin’ cheap to produce something.
Which means that; one, a lot of these are started not as businesses but as little hobby projects, as much as “portfolio pieces” meant to draw attention as anything else (see map mashups). Two, even if the guys building the app are dreaming of a business at some point, they are building it so cheaply that they can MacGuyver a revenue model on when it looks like it can work and still possibly bring in enough money to break even or eek out a salary.
Is that the best way no build a business? Sure as hell not. Is it a fun way to try stuff out and maybe supplement your income? Yup. A good way to show off what you can do? Yup.
Also keep in mind that the fact an app doesn’t turn into a massive profit generating company doesn’t mean it’s a bad business choice, a WTF or a missed chance. Might just be a few guys aiming to make a decent living. Not everyone want to build the next Amazon. Or even the next Flickr.
I know Beattie mentions non profits like Wikipedia in passing, then says that if you try to draw VC money and investors at some point then you should have a real business model with real revenue. I’m saying that so many Web 2.0 projects start for fun and then turn into something more that it’s a relevant factor in the whole field right now. It’s not a wave of people with no business sense trying to get money (ok, some are), it’s a wave of people trying stuff and then realizing they might make something more out of it.