Web 2.0 Sta.rtu.ps: Clevr Remaking Of The Old DotCom?

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Web 2.0 Sta.rtu.ps: Clevr Remaking Of The Old DotCom?


Every now and then, I like to intersperse my regular writing on startups, business, strategy and other serious stuff with something a little more light-hearted. This is one of those times.

I’ve been watching the world of Web 2.0 and many of the Internet startups with both excitement and angst.  Excitement because it’s great to see all the entrepreneurial activity and people finally coming out from under their desks and starting cool companies again.  Angst, because I still have this nagging feeling in the back of my brain that a lot of what is starting to happen harkens back to the age of the dotcom (or the dot-bomb).  

I can’t help but do some pattern matching to see whether the current crop of web startups are not just a semi-clever remaking of the dot-coms of the past bubble.  Here are some random (and intended to be semi-humorous) thoughts on some things that have changed, and others that haven’t.

Disclaimer:  I’m involved in a few Internet startups as either early investor or advisor, so I’m drinking the cool-aid this time a bit as well.  (Last time around, I was running a profitable software company, which was the easiest way to not get invited to the Web 1.0 party).

So, enough of the preamble…

Is Web 2.0 Really DotCom 2.0?
Then:  Many startups were focused on “eye balls”.

Now:  Many startups are focused on the acquisition and monetization of Internet traffic. (hint:  this sounds awfully similar).

Then:  Startups threw big launch parties to celebrate a launch.

Now:  Startup founders eat lunch away from their desks to celebrate a launch.  (this is much better).

Then:  It’s all about building a user base, we’ll worry about revenues later.

Now:  It’s all about creating a critical mass so we can leverage the network effects and social dynamics.  (hint:  this sounds awfully similar)

Then:  Startups spent big money on advertising (remember the Superbowl Ads)?

Now:  Startups get TechCrunched and get initial visibility for free.  (this is good).

Then:  Every big success (defined as a company that raised top-tier VC) had 20+ copycats.

Now:  Every big success (defined as a company that sold for millions) has 20+ copycats.  (a little better).

Then:  VCs invested in guys wearing black turtlenecks and every third person you met was head of “biz-dev”.

Now:  VCs invest in geeks that actually do real work.  (this is a lot better).  [Note:  Business geeks do real work too].

Then:  We had things like the Pets.com sock puppet.

Now:  We have shiny and rounded logos, company names with missing vowels and fant.abulo.us domain names. (frankly, I liked the sock puppet and my brain still has to pause every time I try to type one of those fancy domain names).

This time, I’ve bought front row tickets and am having the time of my life.  It’s going to be an interesting couple of years…

Posted by on Wed, Jul 26, 2006


nice post. agreed on many of the points, especially the missing vowel thing.

(btw, here's another perspective on that..."Web 2.0 and the Letter "e" : The Interview" : http://www.cerado.com/web20-interview-with-e.htm )

posted on Wednesday, July 26, 2006 at 11:30 AM by christopher carfi

Surely you mean "an interesting couple of months" ...

posted on Wednesday, July 26, 2006 at 12:03 PM by James

There is a difference this time around. In the bubble time frame there was a belief that some how eyeballs will translate to revenue - but no one broke the code.

This time there is a monetization vehicle that offers a glimmer of hope - Google Adwords and brethren hold out the carrot that if you have vistors, atleast some will click on display ads.

Not all will succeed - but there wasnt a readily available monetization vehicle before and now there is.

posted on Wednesday, July 26, 2006 at 1:40 PM by Ernest

I don't think it is as different as you think this time around. During the dot-com boom, those people who didn't try to deny thousands of years of economic history believed that those eyeballs would be looking at banner ads, and that would pay the bills. Google AdWords and others like it are just another, somewhat more advanced flavor of the banner ad.

posted on Wednesday, July 26, 2006 at 1:48 PM by

Vincent - I am not saying its a panacea but the amount of money being spend on online media advertizing is also an order of magnitude higher than it was in the bubble.

Just look at GoogleAd revenue growth or check IAB stats ( $12B in 2005). AOL is considering dropping some subscriber fees because they will make some of it up in ad revenue if they just kep the eye balls.

Increased spending on online ads + more context specific monetization vehicles - that is certainly 'different' than the last time around.

posted on Wednesday, July 26, 2006 at 2:35 PM by Ernest

I can proudly say that even though I had a $90 million marketing budget I never went for a Super Bowl ad back in the day. And believe me, lots of folks were encouraging me to do so. ; )

While there is a lot in common with the dot com boom there are also some differences. One of the biggest is that some people are spending time making a good product, remaining frugal while doing so, and building thier business via cost effective marketing methods.

Given the new realities of Web development there are also opportunities to improve upon some old dot com ideas that did not make it the first time around or did but are very, very dated.

The rule to succeed then is the same as the rule to succeed now.

Everything in moderation.

posted on Wednesday, July 26, 2006 at 8:24 PM by Lance Weatherby

I have wondered to myself and aloud where do businesses like YouTube get off violating copyright and if the rumoured price tags for selling aren't just fuelling a Bubble 2.0 for this Web 2.0? I mean, don't get me wrong - I like the video for Pet Shop Boys' 'Rent' as much as the next guy or girl my age, but surely there is something fundamentally wrong with a business which is founded on something so basic. Did we learn nothing from Napster or is Web 1.0 and its lessons 'so yesterday'?

PS: no missing vowels here - I write from Britain and I use British spelling..

posted on Friday, July 28, 2006 at 7:38 AM by S Y

I can't agree with you more, the next few months/years (depending how long this all lasts) is going to be very interesting to see if all these new start ups can be sustainable businesses. I dont think a lot of them can, but it is sure going to be interesting to see who comes out on top.

posted on Friday, July 28, 2006 at 8:55 AM by Nick Gavronsky

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