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Web 2.0 emperor has no clothes
Web 2.0 is finally dying and the hold outs are trying to mask its death by calling our current state of evolution “Web 3.0.”
What are “they” saying? From Silicon Valley Watcher:
“Kleiner Perkins Caufield & Byers, Silicon Valley’s leading VC firm, has stopped investing in Web 2.0 startups.
‘We have absolutely no interest in funding Web 2.0 companies,’ says Randy Komisar, a partner at Kleiner Perkins. He mentioned this during an after dinner conversation last week. He said he had recently told John Battelle, one of the organizers of the rapidly growing Web 2.0 Summit conference, that the term no longer had the same positive cachet it once had. In the VC community it clearly has a negative one.
It won’t be just Kleiner Perkins that has lost interest in Web 2.0 companies. The firm is one of the trend setters in Silicon Valley, with a long string of massively successful investments over several decades. And Silicon Valley VC firms always invest in trends, rather than companies. They certainly won’t be attending “Web 2.0″ conferences, and without VCs attending, there is no point in startups showing up and preening for their next capital raising event.
And on the death of so called “long tail” economics:
“Web 2.0 companies will now have to reinvent and redefine themselves. And reprint their business plans. They should also remove any mention of ‘long tail economics.’
I have a bad feeling about the longevity of that term in the investment community. It sounds a touch too W2.
Nixing anything ‘long tail’ is an easy way to future-proof a business plan for a few months longer.”
Indeed! While we certainly see “long tail” economics working for companies like eBay, Google, and Amazon, the Long Tail works for these businesses because of economies of scale. Your start up doesn’t have economies of scale. Sorry.
But I really knew Web 2.0 was in trouble when its unofficial spokesman, Steve Rubel, over at Micro Persuasion, recently declared its death:
“…over the last year my thinking has evolved dramatically. I have become less interested in every new shiny object and more engrossed in the social changes it, slowly, effects. This is in part a byproduct of the tech blogosphere getting drunk on its own Kool-Aid.
The endless dot-com parties are back. So are the countless trade shows/conferences that regurgitate the same ‘new paradigms’ the last 10 events did - with no end in sight. And yes, the ridiculous BS press releases are flying into my Gmail box. This is why I don’t speak at or attend very many Web 2.0 conferences anymore. I don’t have the heart for it. I would be stirring the big pot of Kool-Aid.
Let’s face it, we’re skunk drunk and it’s because of money. It’s almost like we all need to enter Betty Ford Clinic 2.0 together. This time, it’s not stock market money but private equity, M&A, VCs and to some degree the reckless abandonment of logic by some advertisers who are perpetuating what is sure to end badly when the economy turns. Hubris is back my friends.”
Everything moves in cycles and the Internet is no different. I still maintain (and always will) that the Internet is best suited for easy access of relevant content (Google), connecting people (email or maybe even social networking), selling crap (ebay and amazon), and lead generation (think mortgage industry). Everything else is just a question mark.Â
Does biz-to-biz ecommerce (e.g., vendor or supply chain automation) fall into selling crap or connecting people? I think there in an “enterprise” perspective to add in addition to consumer and small business.
Left by Brad Baldwin on 11/06/2007@Brad:
Agreed…
Left by Chris Knudsen on 11/06/2007My day job is developing TechEd, an annual conference dedicated to helping educators better use technology in education. This year’s subthemes is Web 2.0.
Left by matsonian on 11/08/2007It might be said that by the time the education community finds something mainstream, it is already passe among the hip and cutting edge techno community. But, as for monetization, the education community is huge and there is still much growth in social networking for that market segment.
Hey there Chris,
Great post, and there is certainly much about today’s environment that smacks of ‘bubble,’ or at a minimum of ‘trend whooshing by so fast you barely had time to get out of the way.’
Your three categories of web validity definitely apply to web-only plays. My belief is that the web’s role is becoming more and more one of ‘friction-reducer’ (aka lubricant). This means that companies need to exploit this tool in order to eliminate barriers between the value they provide and their customers.
Web 2.0 may no longer be an independent means to global domination, but don’t give up on the industry just because the term has changed.
Left by Kaila Colbin on 11/12/2007