Subscribe to feed
Beautiful Evidence
The Art of the Start
The Bootstrapper's Bible (eBook)
The Business of Software
Guerrilla Marketing
Woodward Warnings on Web 2.0
Jim Woodward is a must-read for software entrepreneurs. Smart guy who writes every month for the MIT Enterprise Forum Reporter. His latest piece is on “Web 2.0″ and his concerns that a lot of the companies getting going are too half-baked - founded by techies without business sense, who create duplicable services.
Read it in full, but I give you a quick teaser:
They also tend to be founded by techies with a whizbang idea. I have long ranted that the three things that matter in investment decisions are people, people, and experienced people. A corollary to that is that technology usually takes a back seat to market size and other “business” factors.
When it comes to software companies, this is especially true. We all know that hardware is a commodity, available from many low margin manufacturers with little differentiation. Comments at a recent meeting brought me to an epiphany — Web software is also a commodity — available from multiple sources at relatively low prices. Gone are the days when a good web site took a collection of really skilled geeks working into the early hours on a daily basis — the tools are now so good that you can develop a site with sophisticated look and feel in a few weeks with a couple of good people. (OK, maybe I overstate my case a bit, but times have changed.)
This raises the question of why angels and a few VCs are considering financing Web 2.0 companies, at least those with no marketing or business experience on the team. Why buy a piece of something at a several hundred thousand dollar (or more) valuation when you’ll have to provide the marketing and management experience? Why not simply provide the experience, hire a couple of software people to do the web site, and own it all for the same money?
OK, not so quick, but this is a really good piece that my “Web 2.0″ friends should keep in mind!
As should I.