The Web 2.0 Success Ratio
Before the first bubble burst we saw companies popping up left and right with no real viable business plan, but a lot of money backing them up. We all know what happened and would like to think that those mistakes won’t be made twice. However, in this era if you visit any of the Web 2.0 (at 9rules we call it Web++ because it’s going to keep on changing anyways) news sites it seems that even more “companies” are being formed than before and even though not all receive the same hype they all get their 2 minutes of fame (the time it takes to read the entry). However, after the 2 minutes how many really thrive afterwards?
Everyone is so quick to go, go, go that they don’t realize it isn’t always who gets the fastest start, but who actually ends up finishing the race. What is the ratio of successful startups today do you think? How many just flounder off to nothingness?
Related reading:
[...] Scrivs [...]
By usmediaweb» The CC Anthology » The Web 2.0 Success Ratio on July 14, 2006 3:17 pm
Well considering it seems like 50% of all the startups are myspace wannabees, I would say the success rate isn’t that high.
I subscribe to Techcrunch & Mashable and of all the companies that pass through there it seems all the web 2.0 garbage is based on either myspace or digg, plus a little twist. People just want to get in on the money rather than creating something innovative and original.
Don’t get me wrong, there are some apps out there that are actually useful (IE Farecast). But most of the stuff I’ll never use.
By Chris Griffin on July 14, 2006 3:36 pm
This isn’t really indicative of how many startups actually succeed and how many fail, but why does it really matter unless there is a huge pile of money on the line for them to succeed? With the low cost of entry into the web-space, it’s pretty easy to just throw things at the wall and see what succeeds and what doesn’t… and those things that catch on, will eventually get more resources devoted to them and they’ll be able to have more success, while those that didn’t stick, will just drop off and be forgotten. Except by the people that started them. For them, the “failure” isn’t even really a failure… it’s just a non-success. But I for one learn more from my non-successes than I do from my successes.
By Steven Ametjan on July 14, 2006 4:55 pm
The majority of any types of business, online or offline, will fail according to government statistics in Australia and the US at least. Are Web 2.0 companies failing quicker? Probably, but also a lot more cheaply than offline businesses with high startup costs.
A benefit of the web is being able to change your business model and direction very quickly and with relatively little cost. Most of these companies will have invested time in much greater quantities than money.
By Mathew Patterson on July 14, 2006 6:42 pm
Scrivs,
Web 2.0 startups need to focus to keep on track. They need to plan, design and develop with a clear, focused mind.
The ulimate developers holiday is just the thing.
- James
By Jamsi on July 15, 2006 5:36 am
I’d say that its a bit early in the game to see a lot of companies fail, but inevitably a lot of what we are seeing today will probably change form/consolidate or disappear entirely. There’s a lot of cool ideas but only so much market to go around.
Luckily, things are cheap so the loss isn’t a big deal (unless they’ve financed) and I don’t see a big problem with overzealous public markets either. I don’t think there’s a bubble, more of a gold rush with only so many claims.
By Aneil Weber on July 15, 2006 9:30 pm
I think one of the reasons you’re seeing so many Web 2.0 companies — possibly even more than in the “Dot Com Boom” — is because it’s far cheaper to develop a startup nowadays. Computer hardware, Internet bandwidth, and programmer time is far less expensive than it once was.
By Spencer Fry on July 18, 2006 3:38 pm
I think the natural rate of success for startups is no different than the natural rate of unemployment: it doesn’t fluctuate much at all, no matter what the economic conditions. The rate of unemployment in the U.S. is always somewhere in the 3-8% range, in good times and in bad. Similarly, 9 out of 10 startups always seem to fail and I don’t see why that would change now. The only difference is that the amount of capital out there has remained the same since 2000 but the cost to start a company has decreased so you have a greater *total* number of companies trying things out.
By MIke D. on July 18, 2006 9:50 pm
It’s funny that so many people are quick to disparage businesses tjat failed now that the bubble has burst. Granted there was a fair share of hype and hubris, but by and large, the businesses that were funded did have a *viable* busines model–on paper. But translating conceptual ideas into a tangible product, even in the best of conditions, is no small feat let alone achieving popularity.
If there was any merit to the ‘those business models sucked’ mantra, then what does that say for the VCs who funded them…that theyre a bunch of greedy idiots? What about the Harvard MBAs who started them? Hardly.
Lastly, if one has never pitched VCs or private investers for funding, then it’s simply ignorant to dismiss those that have taken the risk..
By Nemrut on July 19, 2006 2:04 am
It is so easy to sit on the sidelines and hurl stones at those that tried, but maybe came up short. Just showing up is 90% of the battle.
Leaving a job to start a business, building a new web app, investing in some new technology, etc. are all actions that take guts. The first ones to give the “I told you so’s” are the ones that were too scared to leave the comfort of thier ingonorance.
I applaud any who at least try, whether myspace bandwagon riding or not, they took a risk that 99% of the general population dream about having the courage to even contemplate.
True entrepreneurs know this.
By joshua strebel on July 19, 2006 8:50 pm