Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison • Hacker News Board

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#11

Post by jwesley » Fri, Jan 09, 2009, 7:26 PM UTC

TomOfTTB wrote: post #3

jwesley wrote: post #2

"Web 2.0 is not like Web 1.0. It's in a special (ed) class of its own." The author clearly does not get it. Profitability is not a "pipe dream" for companies like Digg and Facebook. If profitability was the only objective, I'm sure they could achieve it. The pipe dream is attaining the massive scale necessary to build a publicly traded company.

Actually I think you don't get it. What you're missing is that the whole purpose of this article is to refute the thinking that you obviously subscribe to (given your comment). So it isn't that he doesn't see your point of view it's that he thinks you are wrong (he obviously sees your point of view because he wrote a whole article that's clearly intended to refute it) It seems to me that, by thinking he must be too s…

"The whole purpose of this article is to refute the thinking that you obviously subscribe to (given your comment)."

What type of thinking is that? That VC companies are required to shoot for the home run exit? That's not a mode of thinking, it's the reality of the VC industry. Lean, efficient, profitable companies are great, but unless they aim to become big businesses they are not VC worthy.

As for the other side of the argument, I must be too stupid to see it. All I could glean from that convoluted mess was that Digg and Facebook should be more like Google and eBay.

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#12

Post by fallentimes » Fri, Jan 09, 2009, 7:41 PM UTC

biohacker42 wrote: post #4

Am I the only one who remembers the first Web 2.0 companies, before the 2.0 buzz word was around? I'm talking about Flickr, the early Flickr, how lean and neat was that! Can we now look forward to more creative and lean things? At least until Web 3.0 rises to drown it all in money and unoriginality, again.

I still don't know what web 2.0 means. As far as I can tell it was coined by a publisher to sell more books.

Sounds like what consultants/talking heads do to move those awful self-help, get rich quick, business books.

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#13

Post by cstejerean » Fri, Jan 09, 2009, 7:52 PM UTC

jwesley wrote: post #11

TomOfTTB wrote: post #3

Earlier quoted context omitted.

Actually I think you don't get it. What you're missing is that the whole purpose of this article is to refute the thinking that you obviously subscribe to (given your comment). So it isn't that he doesn't see your point of view it's that he thinks you are wrong (he obviously sees your point of view because he wrote a whole article that's clearly intended to refute it) It seems to me that, by thinking he must be too s…

"The whole purpose of this article is to refute the thinking that you obviously subscribe to (given your comment)." What type of thinking is that? That VC companies are required to shoot for the home run exit? That's not a mode of thinking, it's the reality of the VC industry. Lean, efficient, profitable companies are great, but unless they aim to become big businesses they are not VC worthy. As for the other side of…

For the VCs to have a big exit the company eventually most be profitable, very profitable. That has to be the ultimate goal. But to get there you can't just keep giving things away for free and hope that one day you'll magically figure out how to make money.

Even if you'd rather shoot for being acquired, it still makes sense to try and reach profitability as soon as possible. If you keep living on VC money forever sooner or later you run 2 risks: 1) the VC money will dry up, like in a bad economy 2) the valuation of the company gets so high it doesn't make sense for anyone to acquire you.

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#14

Post by iamdave » Fri, Jan 09, 2009, 8:10 PM UTC

Again, I must run and hide behind the great work Twitpic is doing.

http://blog.twitpic.com/2008/12/be-yourself/

Twitpic is self funded and ran by one guy from his apartment

He does it because he loves it, not because it pays the bills. Does everything HAVE to turn a profit?

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#15

Post by [deleted] » Fri, Jan 09, 2009, 8:52 PM UTC

rokhayakebe wrote: post #9

Someone mentioned a while back that advertising is a business model for web properties just as much as it is for tv shows/sitcoms. The shows that make money have a significant loyal audience. The few that charge money to the end users have a content their audience can't seem to live without (read porn).

[deleted]

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#16

Post by mixmax » Fri, Jan 09, 2009, 9:03 PM UTC

iamdave wrote: post #14

Again, I must run and hide behind the great work Twitpic is doing. http://blog.twitpic.com/2008/12/be-yourself/ Twitpic is self funded and ran by one guy from his apartment He does it because he loves it, not because it pays the bills. Does everything HAVE to turn a profit?

If it's a business with shareholders and investors it does.

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#17

Post by patio11 » Fri, Jan 09, 2009, 9:49 PM UTC

rokhayakebe wrote: post #9

Someone mentioned a while back that advertising is a business model for web properties just as much as it is for tv shows/sitcoms. The shows that make money have a significant loyal audience. The few that charge money to the end users have a content their audience can't seem to live without (read porn).

I'd be interested in hearing the definition of pornography which covered Basecamp, CrazyEgg, that WoW guild hosting app I heard about earlier, or for that matter Bingo Card Creator.

"But Patrick, that's not fair. You're talking about real companies that have paying customers. I'm talking about 'web properties' that aim for userbases the size of nation states, and accordingly have to aim for the broadest possible reach and the poorest possible customers."

But why are we talking of those? The model demonstrably fails when you can afford to throw hundreds of millions at it. The "We provide value to customers and all our employees keep their clothes on, thank you very much" model has worked for thousands of sales in a year, tens of thousands, hundreds of thousands, millions, hundreds of millions, etc...

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#18

Post by jobenjo » Fri, Jan 09, 2009, 10:10 PM UTC

The lameness of this article is that he's making all of his conclusions on 3 big companies. That's an enormous generalization.

He's missing the whole lean, mean segment by looking only at the top.

Try comparing the sheer number of companies during 2.0 and 1.0, and you'll start to see the difference.

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#19

Post by ojbyrne » Sat, Jan 10, 2009, 12:37 AM UTC

cstejerean wrote: post #13

jwesley wrote: post #11

Earlier quoted context omitted.

"The whole purpose of this article is to refute the thinking that you obviously subscribe to (given your comment)." What type of thinking is that? That VC companies are required to shoot for the home run exit? That's not a mode of thinking, it's the reality of the VC industry. Lean, efficient, profitable companies are great, but unless they aim to become big businesses they are not VC worthy. As for the other side of…

For the VCs to have a big exit the company eventually most be profitable, very profitable. That has to be the ultimate goal. But to get there you can't just keep giving things away for free and hope that one day you'll magically figure out how to make money. Even if you'd rather shoot for being acquired, it still makes sense to try and reach profitability as soon as possible. If you keep living on VC money forever so…

For both of the companies referenced, the founders have been reported to have "cashed-out." I don't think either 1 or 2 is part of their thinking. Just follow the standard VC Web 1.0 agenda - get big fast. Home run or complete failure.

People seem to have forgotten all the failures that produced. VCs are fine with 9/10 complete failures, as long as there's 1 home run.

Re: Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison

#20

Post by jhancock » Sat, Jan 10, 2009, 12:46 AM UTC

jobenjo wrote: post #18

The lameness of this article is that he's making all of his conclusions on 3 big companies. That's an enormous generalization. He's missing the whole lean, mean segment by looking only at the top. Try comparing the sheer number of companies during 2.0 and 1.0, and you'll start to see the difference.

thank you. my thoughts exactly.