Web 2.0, Entrepreneurs, and the Long-Tail

Posted by Administrator | Posted in Uncategorized | Posted on 02-02-2007-05-2008

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For a while now, myself and many of my collegues have discussed the concept of the long-tail and the impact it will have on both the Internet and our lives in general.

In my essay, “Reflection on Joe Trippi’s ‘The Revolution Will Not Be Televised‘ ” I talked about the importance of a two-way dialogue between customer and company. In reality, the Internet fosters an integrated dialogue, rather than just a two-way dialogue, where may key stakeholders influence the discussion.

In a follow-up, “The Revolution is Happening Right Now,” I provided real-time examples of the long-tail at work, as a way to demonstrate its power.

Then, in MySpace is Dead, I took the example of a large Internet company, “MySpace,” and argued that niche sites that do something very similar would begin competing with it. It has started already.

So, what will this revolution look like?

It’s hard to predict human behavior, but here is what I think will happen.

On television we have several major television networks, and then a number of premium cable channels that cost extra.

On the Internet, while we’ve gone through cycles of expansion and contraction, it would appear now that the revolution will manifest itself in the following way:

Thousands… hundreds of thousands, maybe millions of little Web 2.0 companies will emerge, each one catering very specifically to the needs of a very small group of people through the Software as a Service model.

- Want to plan a party? Check out MyPunchBowl.com – a company whose time is dedicated solely to helping you plan the best party every.

- Like online gaming? Check out GuildeCafe – a social networking platform that brings gamers together in teams.

- Need a better tool to track your finances? Check out Geezo.

These Web 2.0 sites are popping up every day to address the needs of small niche groups in powerful and compelling ways. Some sites focus on entertainment, while others focus on personal or professional progress.

But… Web 2.0 companies that are being created target more than just consumers. Many people know of SalesForce.com (web-based CRM)… one of the first companies to deliver software as a service… but we have a client who is, in many ways, the SalesForce.com of the staffing industry. They’ve targeted a specific niche and created a product that appeals to that niche better than the goliath in the market. Have they been successful? Unbelievably so!

It’s true… in the Web 2.0 world, companies will have to either Go Big, Go Niche, or Go Home.

The interesting thing here is that while it costs a lot of money to build and distribute a television station, it costs little money to build a disruptively powerful website, at least in the eyes of the niche it targets. In fact, some venture capitalists are concerned because entrepreneurs need less and less money to build their companies (Web 2.0 companies), and the exits are likely to be small as well. YouTube aside… these Web 2.0 companies sell for good money quickly, but only few will fetch billion-dollar price tags.

In a lot of ways… These Web 2.0 companies are the enemies of the YouTube/MySpace/FaceBook world. The former gets very specific, while the latter (YouTube/MySpace/FaceBook) target everyone and their brother.

The Internet is ushering in a new era of entrepreneurism that will indeed change all of our lives… because that is the specific focus of all of these companies: To change our every-day lives, one niche at a time.

When Yahoo! sets out to do 500 things (build a great television portal, build a great movie portal, build a great financial portal, etc) they get spread thin.

When a lone entrepreneur, or small group of entrepreneurs set out to focus on building one great thing, they can direct all of their Web Innovatorsefforts exclusively on that one thing. Check out MyPunchBowl.com (listed above)… they have literally streamlined the party-planning process in a compelling way. We’ve all used Evite.com, but the workflow on PunchBowl rocks in comparison.

As you can see from the picture below… these entrepreneurs are hungry. This picture was taken at a WebInnovators event that I attended last Monday. Most of the people in this room at entrepreneus who have the sights set… not on changing the world, but on changing your world… if you fit their niche:)

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