It’s more than a year and a half now since I started this blog with the tagline: “Stop here for a Web 2.0 reality check”.
My rationale for starting this blog in the first instance was that I believed the hype and hoopla around Web 2.0 at the time was only going to hurt the industry and lead to another bubble.
Today, I’m taking part in a panel at Microsoft’s Tech-Ed event where we’ll be discussing Web 2.0, and I’m basically participating as someone who’s going to argue against the Web 2.0 hype. So I thought it was a good time for me to blog my own reality check as to where the Web 2.0 industry is at almost a couple of years since the start of this blog.
Below are four of the foundation beliefs I’ve consistently argued since starting this blog:
1. Too many Web 2.0 models have no business model
It’s still very much the case. In the past 18 months, we’ve not seen any radical new business models that promise to increase the ability of dot coms to monetise traffic. Google AdSense remains the dominant revenue source for most dotcoms and frankly 95% of startups won’t pay the bills with the AdSense revenue they ‘re ever likely to earn
2. Web 2.0 is heading towards a bubble
Nothing’s exploded yet, but there are still too many companies raising VC capital at stupid valuations they’re never going to live up to. I spend my first six months, lambasting a whole bunch of me-too online calendar/photo/productivity apps. Now, I’d point the finger at me-too social networking apps and video tools. Sorry folks, but both those markets are pretty much done and duster. I simply don’t get what some of these VCs are thinking with the multimillion dollar valuations they’re putting on some of these startups. It’s not sustainable.
3. Web 2.0 is a stupid term
A couple of years after it was coined, it’s an even more stupid term. The longer Web 2.0 as the badge for the industry dominates, the staler it gets. Even after all this time, ordinary people, still don’t get it. I spoke to a friend of mine last night who is a coder during the Tech.Ed welcome dinner and even he didn’t really understand what Web 2.0 was supposed to mean. It’s just the Internet, people.
4. The head up its own arse viewpoint of Web 2.0
The Web 2.0 community is still incredibly insular. The same group of people still jump from beta service to beta service. Meanwhile, my mum still doesn’t get Web 2.0, my wife doesn’t get nor do most of my non-techy friend.
I’d add to this
1. The upcoming privacy backlash
It’s only going to take a couple of cases of people’s MySpace/Facebook/etc profiles being misused for criminal gain before everybody is going to start to worry about being so free and easy with “sharing” such intimate details of their personal lives. When that happens, the fun and value of social networks is going to plummet. There will be a backlash, there is always is.
2. Web 2.0 as a fad
The Web 2.0 community has an incredibly short attention span. It moves from one hot service to the next. The argument goes that as the Web 2.0 digerati moves on, hopefully there is enough of a critical mass of users left behind that a sustainable business can carry on. But increasingly I see a lot of these things as fads. Will apps like Facebook and MySpace stand the test of time or is it something we all just jump onto before moving onto the next cool thing to do. The utility of a lot of these services is still questionable – they tend to soak up more of your time than they give back – and as such must be viewed as recreational pursuits.
History shows us most recreational pursuits come and go and come and go. Who’s to say social networking isn’t just the latest digital yo-yo? I’m not saying it definitely will be, but I think the view that social networking is just going to grow and grow is based on some pretty shady beliefs.
3. Everything old is new
I think we kind of all believed a couple of years ago that we’d continue to see incredible innovation and that they’d be a whole raft of really new , revolutionary ideas come about. But really it hasn’t happened? I’d struggle to name any category of so-called Web 2.0 apps that haven’t been around for at least five years and more likely ten. What’s worse is that even now it appears innovation has stalled somewhat. How many more social networks do we need?
As an online entrepreneur I wouldn’t want to be any other place, but I continue to worry that the heat and hype behind this market is going to result in a pop. Certainly, there can never be a crash like we saw in 2000 but the current level of valuations isn’t sustainable and has to correct. In 2001, being a dot com entrepreneur was up there with being a used-car salesperson in terms of credibility and respect. No-one wants to see that again.