Tuesday, June 06, 2006
Web 2.0 bubble articles
Today I have fond 2 interesting articles about "Web 2.0" revenue model and future. Here are the links:
A VC's View of Web 2.0
Crash of Web 2.0 Titans.
The first one is certainly worth reading. It is a bit pessimistic though.
But one should certainly agree to a few things:
1. "Web 2.0" buzzword attracts capitalists.
2. Many of the Web 2.0 companies do not have a good revenue model.
3. Startup costs today are _low_ and assuming a good revenue model in many cases there is no need for 1 000 000s$ investments.
4. Companies that will survive will certainly have very low running costs or be part of large companies with financial backup. It seems unlikely for some companies that received millions of $$ to work it out.
5. The positive is that the current investments are much much lower that these from 90's. Investors are much more aware and because of low running costs it might work out in many cases.
To return to our own project - we do not want to rely on any VC capital. Our model assumes self-financing with some investments from the FFF sector (Friends, Family and Fools). The initial development cost is really low here in Poland (that is also why I often tell people about software outsourcing in Poland).
Today you can have a dedicated servers for as low as $70 per month (for initial phase. full rack collocation is the next phase). The programmer's salary in Poland could be much lower than in US or any other western country. Local costs are also much much lower (office + logistics).
I will certainly cover possibilities of software development outsourcing in Poland in a dedicated post someday because I think it is worth it.
best regards - Michal
A VC's View of Web 2.0
Crash of Web 2.0 Titans.
The first one is certainly worth reading. It is a bit pessimistic though.
But one should certainly agree to a few things:
1. "Web 2.0" buzzword attracts capitalists.
2. Many of the Web 2.0 companies do not have a good revenue model.
3. Startup costs today are _low_ and assuming a good revenue model in many cases there is no need for 1 000 000s$ investments.
4. Companies that will survive will certainly have very low running costs or be part of large companies with financial backup. It seems unlikely for some companies that received millions of $$ to work it out.
5. The positive is that the current investments are much much lower that these from 90's. Investors are much more aware and because of low running costs it might work out in many cases.
To return to our own project - we do not want to rely on any VC capital. Our model assumes self-financing with some investments from the FFF sector (Friends, Family and Fools). The initial development cost is really low here in Poland (that is also why I often tell people about software outsourcing in Poland).
Today you can have a dedicated servers for as low as $70 per month (for initial phase. full rack collocation is the next phase). The programmer's salary in Poland could be much lower than in US or any other western country. Local costs are also much much lower (office + logistics).
I will certainly cover possibilities of software development outsourcing in Poland in a dedicated post someday because I think it is worth it.
best regards - Michal
