Nick Ballard is a senior consultant with Cambashi Limited, a British research firm that provides European perspectives on the CAD market. He recently sent me his thoughts on Web 2.0:
Even though I have a friend who is working in Web 2.0 applications, I hadn't realized that it included the B2Bs, B2Cs, applications service providers, hosted systems, and the portals that swept through the venture capital market before the Internet bubble burst!
It is just a fraction of the cost to set-up a Web 2.0 software development company, compared to a conventional software business. Five years ago, a startup might have needed to borrow $10 million. Today, using public licenses, essentially free software, and standard hardware, coupled with low communications costs and virtual home-offices, it can be done for $1 million. For the serious VC [venture capitalist], $10 million is worth looking at; $1 million is off the radar!
Web 2.0 will work. Amazon, eBay, Friends Reunited, Google are the vanguard; they kept to simple models, offering a service that people wanted, not ones that they would have to learn to want. As acceptance increases and confidence in the key principles of Web technology is gained, asute entreprenuers will find the right time to offer the right services to the right markets.
There's always money for good ideas; if anyone out there has seen a TV program called "The Dragon's Den" they will also see just how many more really bad ideas there are out there as well!
Your title is misleading - he said Web 2.0 COMPANIES are cheap to set up, not the apps. However I believe that is true too - look at chicagocrime.org...
Posted by: anonymous | Dec 14, 2005 at 08:32 AM