Too many web 2.0 companies emerging…

December 11, 2006

E-Consultancy reports from Le Web 3 with comments from Danny Rimmer of Index Ventures (a venture funding firm who backed the likes of Last.fm and Spotrunner). Danny said: “What I am concerned about is that it seems everyone wants to start a company instead of just surrounding an idea and going after it. When you have mutiple companies going after the same opportunity, things are not going to work out for everyone.”

Not exactly insight of the year, but a valid point and one that all the web 2.0 bandwagon jumpers should heed before they churn out another social news, video sharing or niche community site. Follow some basic rules to make sure your web 2.0 site/service gets the attention it deserves:

  1. Try and come up with something different.
  2. Make sure it really is useful (a lot of web 2.0 sites really don’t have all that much value for the end users).
  3. Don’t enter a market that is saturated with well funded opposition unless you really have found something totally unique (and hopefully in demand) to offer.
  4. Do your research; find out who else is doing something similar, find out how much traffic may be available to you, get good estimates for market size etc (helps for approaching VC’s too).
  5. Do some usability testing; even if it’s just your mates/Dad/grandparents. Too many services are being launched which don’t seem to have taken into account the fact that real people, some of whom won’t be web savvy will be the target audience.
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One Response to “Too many web 2.0 companies emerging…”

  1. Anonymous Says:

    I agree with Rimmer. Though he entered a market already dominated by the world’s first international internet-based discount TV ad agency Cheap-TV-Spots.com and their 24 hour turnaround automated ad agency BareNakedAds.com which produces quality TV and web video ads for free. It seems like he’s saying, stay out of my territory because it’s not really defensible. Am I wrong? I mean, his spot service costs more than Cheap-TV-Spots for an ad and air time. And he can’t produce custom quality award-winners for a flat rate like Cheap-TV-Spots (Cheap TV Spots has 51 international awards). Rimmer’s used template ads are easily copied by other web people with no agency experience at all, and his own service says it adds fees to network air time. It sounds like Rimmer is in a crowded field of look-alikes turning out cookie-cutter ads for too much money. He entered a market where Cheap-TV-Spots.com constantly produces and airs quality custom-made ads for less than his recent investment, and that seems to only be able to churn used ad templates or amateurish “customizations”, even with all that capital behind them. Maybe he’s counting on small business people not being able to discover the best deal, themselves. I think they can. And I can almost hear the template-ad bubble starting to pop.


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