One of the questions that has been tossed around the blogosphere recently is whether Kiko’s failure portends a coming wave of other Web 2.0 failures. Scoble says accurately and succinctly what I and other have been saying for months:
“Getting the cool kids to try your technology isn’t the same thing as having a long-term business proposition.”
That’s why I continue to believe that developers need to start hitting for average instead of swinging for the fences. It’s another way to describe the corner market approach I have talked about.
Is Kiko just the first of many Web 2.0 applications to throw in the towel? Of course it is- math 101 tells us that much. There are a lot of horses running in the same race, and some of them will be left behind. Plus, at least some of these applications are being created out of the love of creation, rather than the wish for riches. As other of life’s responsibilities call, some of these will be shuttered or ignored into oblivion.
The bigger question is whether Kiko heralds the beginning of a big shakeout that will leave the Web 2.0 platform in shambles?
I think the clear answer to that is no. There’s still angel and VC money looking for a place to land. And Yahoo and Google have not abandoned growth by acquisition. I suspect the rate of new Web 2.0 companies will slow a little as we climb up the curve. But there’s still fun to be had and at least the chance for money to be made.
The big shakeout will come when everyone is forced to realize that ad dollars cannot support the weight that everyone from Web 2.0 to MySpace to AOL to Google is placing on its shoulders.
The next wave of Web 3.0 companies will be the ones that create products and applications that people will pay for. Somewhere along the way pay became a dirty word. Math and economics will force that to change- the only question is when.
Web 2.0, and likely Web 3.0, play on a different field than the enterprise applications that rake in the big money. They are largely aimed at consumers- but there’s plenty of money there. Ask Amazon and eBay about that.
After the big shakeout does come, look for the next group of web based applications to go old school and actually expect users to pay for their products.
That means no tossing up a web site just to announce that you are working on some bookmarking or networking service. It means coming out of the gate with something that enough people will pay for to keep you afloat while you market it to the larger population. It means having something that is really cool or useful and not just a thinly disguised advertising platform.
In sum, it means better applications for us and more money for them.
In the long run, that will be good for the web, good for the developers and good for the consumer.