Download Squad

I'd have to agree with the CEO on this one. Business has never been as simple as just offering a service and then trying to find a bag big enough for all your cash to fit into. You need a market, first off. Are people even interested in putting all of their personal information into some calendar application stored on your servers in a proprietary format that locks them into using your website until the end of time, lest they face a difficult transition to a different service?

If you've got lots of willing people in line, you still have to figure out a way to make cash off of them. Advertisements or service fees are common. True scum do both and die quickly unless bought out.

Then, one of the really secret bits almost all these companies ignore even if they managed the last one... you have to stop hiring people. Stop making the company bigger and bigger without a plan. If you make a calendar application and it's a hit, guess what? Your users want that calendar application as you have made it. Any improvement runs the risk of turning people away that previously loved your idea. Loads of companies upgrade their products into oblivion and alienate their users just because they have to keep a team of developers busy. Start a new project or expand your scope or something, but handle any successful entry with kid gloves.

And finally, don't go public. Ever. When your company goes public and offers stock, it will be bought up by Goldman Sachs or some other large investment firm. Those firms are tyrants. They don't care if you are happy with a $50 million per year profit. They don't care that the year before you only made $20 million. They are only interested in you if the rate at which your rate of increase of profit increases every year. Yes, they look at the double-derivative of your profit chart and demand constant improvement there. Great profits aren't enough. Great growth isn't enough. Great growth of the rate of growth is the only thing they look at. And no company can sustain that for long unless they screw over their employees, their customers, and finally themselves. The mutual fund managers do not care. There will always be another company new enough to give them the destructive returns they crave.

Keep your company private, offer private stock if you need to raise money for expansion. Normal investors go ga-ga over 15% returns. And those can be managed without destroying yourself.

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I say the bloodbath is about to begin. The web 2.0 bubble is going to pop eventually. I am a fan of the web 2.0 movement, and I believe in a lot of the motivation behind some of these companies, but Web 2.0, like the dot com days is littered with bad business plans. Nothing against web 2.0.

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There will always be room for yet another [insert any existing or completely new & innovative service here]. Just as long as the people behind it don't think in six figure numbers from the get go. This is like everything else - art, music, film, - if it's made by people with passion & belief in what they're doing - it's (most probably :) going to be a success.

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I don't even buy that it's a bubble. How slow would you have to be to believe that this time you don't need to make any profit? The same thing will happen as last time, a bunch of project (they are not businesses) will drop off the map, and a bunch of them will sail through making money as ever.

Photobucket vs. YouTube is a decent example, Photobucket ahs always made money, YouTube never has. Unless something changes in a serious way, YouTube is not going to continue pouring money out just to provide a service.

I personally love the cull, because I think it distorts the market a bit with a ton of unviable free services out there. It makes it much tougher for real businesses to get going.

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Where can I see a bigger version of this post's logo capture? There's a few of those sites in the logo pic that I'd like to visit; and some look kinda neat, i.e. Consumaan? Consuman?

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