Why Web 2.0 Companies Fail ?
This weekend Michael Arrington (Techcrunch) pointed to the failure of Fold.com, one of the web 2.0 websites which aims to provide a personalized AJAX home page similar to Google’s Personalized home page, Netvibes and others... today the domain name fold.com is for sale ! Michael was worried in January where there was a new AJAX Homepage launched almost every two weeks.
While some companies succeeded to attract investors and make millions of dollars such as Netvibes and PageFlakes... others simply fail and close their doors. Why do Web 2.0 Companies Fail?
Many people don’t understand the concepts of a startup... the failure isn’t related to the project itself, but to the management behind it. Entering in a big competition with tons of others isn’t an easy task, especially when you don’t know how others are already making money from that service. In other words, if you don’t know how to monetize and sell your product, it’s simply a waste of time and money, not to mention the bad reputation.
Randy has commented on why most Web 2.0 companies will fail. People are not honest, making contests and never giving prizes, no experience, don’t communicate, and don’t learn from their failures. I find it a little funny that a Web 2.0 company makes an AdWords campaign and point it to a 404 webpage!
On the other side you see companies who succeed: they communicate, are organized, listen and try to understand their needs, make progress, but most important of all they have the backing necessary to survive for one or probably two years, until they can monetize their project.
Moral of the story: Web 2.0 Companies will most certainly fail if they only have a short term business plan.
Update : There is an interesting discussion over Slashdot about Web 2.0 and privacy.
