kidmercury

As the reality of the economic situation is slowly dawning on Internet business people in America (though there is still much awakening to do....we're headed towards third world status), one thing is becoming more apparent: web 2.0 was a failure.

Okay, well, not entirely. And I emphasize that the primary problem was NOT strategic misunderstanding -- the business people that have brought us the web services we've come to know and love are very bright and savvy people -- but rather a distortion of the money supply by a criminal government. Perhaps the only true crime the Internet business folks are guilty of is being naive enough to think that they can ignore macroeconomics and that they can live with a completely and utterly irresponsible and criminal government without suffering any consequences. Though they are are hardly alone in that regard.

Of course, it would be a mistake to look back in anger. So let us learn our lessons:

1. Capital is a curse. While money is what we all want, starting off with too much of it will put you down a dangerous path, as you get accustomed to acquiring unnecessary expenses that will prove to be fatal when you look to scale your business. Of course, what exactly constitutes "too much"? That is indeed a tricky question. I will say it is much, much, MUCH lower than what most Internet business people think it is. At the end of the day, all you need to build an Internet business is knowledge/talent, work ethic, and barely any capital (you can get a part-time job to cover these expenses). That is what makes the Internet so special from an entrepreneurial standpoint. Personally, I would never dream of starting an offline business because of the enormous costs involved (real estate costs alone are enough to drive me out of the game). Thus far, companies with too much money have tried to do too much internal building and not enough leveraging of resources external to them. This is a critical error and will prove to be fatal. I view it as the #1 lesson of the web 2.0 failure. Correspondingly, I view the crisis, which is how we learn from the failure, as forcing companies to unbundle.

2. The big picture is more important that you, me, or anything else. Many people consider me to be a fool for spending as much time and energy as I do spreading the Truth. Certainly it has dealt a big blow to my business in the sense that business people that would otherwise treat me like a normal person now treat me as though I am spreading some disease and they wish to get as far away from me as possible (to my discredit I respond by acting even more shockingly as I find doing so to be irresistably humorous, though I should not fuel the fire and will work to avoid doing so in 2009). Ultimately, though, I am not so concerned about my ostracization as I am naturally a kook and the brainwashed public would find me to be distasteful regardless of my fondness for 9/11 Truth; for instance, they would be scared away by astrology or any of the other unconventional elements of this blog and my being, and rule #1 of blogging is to be yourself, as inauthenticity is a sucker bet over the long haul, both psychologically and monetarily. More importantly, though, folks are in the process of learning what happens when you disregard your civic responsibility. And 9/11 Truth is a civic responsibility. Fundamental to a "we the people" society is people being responsible for their government. If your government uses your money to bomb you and then kill innocent Iraqi kids (and innocent Afghani kids...who's next?), that is the responsibility of the American people to address this issue (I understand not knowing about it as we live in a world of lies and we were all plugged into the matrix at some point, but upon discovery of the Truth you are set free by your newfound responsibility). It is disgusting that this needs to be pointed out, and is why myself and some other Truthers tend to take a "we get what we deserve" mentality regarding all the problems society is now facing. But still, even though the Constitution has been destroyed, hundreds of thousands of completely innocent people have been killed, and the economy is now in shambles (a direct result of deficit spending used to expand the money supply), people don't want to learn this lesson. As always, the universe is a patient teacher that lets you choose how you'd like to learn your lessons. If you wish to make this lesson harder than it needs to be, the universe will accomodate you accordingly.

3. The business model issue. I am NOT one of those people who thinks a company needs to have a firm business model from the outset. I agree with Umair Haque when he says that business models happen at the edge. However, there are certain guidelines that help us find the correct business model, and these guidelines have largely been ignored. Three guidelines I'd like to focus on:

• Trying to sell mass-produced content is questionable strategy. The price of mass-produced media is headed towards free, most of us know this but still are not building businesses accordingly. Businesses like eMusic, while they may find some strength for a while, are not sustainable over the long run unless they can move away from charging for mass-produced media and helping create a world in which quality mass-produced media is used as a form of marketing to build a brand and sell other stuff (folks looking to sell media should be exploring media as a service; i.e. "live" media in the form of exclusive communities, or personalized media). This is a very challenging task, no doubt about it. I've spent the past few years failing miserably trying to accomplish it (though I'm finally starting to get somewhere as we are now profitable with revenue growing and the model being more embraced by fellow businesses and customers alike).

• Cloud computing. I am NOT one of those people who hates on cloud computing. However, Richard Stallman does raise some valid points in that it sets the stage for a "tyranny of one" type of world in which the cloud owner owns everything. Moreover, there are limits to value creation under this model (personally, I believe an open source model, where nodes operate can operate completely independently/locally but can still communicate with a cloud that is collectively owned -- almost like a government -- is the future, and am looking to build my business accordingly). As such the market will not really allow it. Moreover, even if you want to play this game, there is a little company called Google that is eons ahead of everyone else in the cloud computing game (though I must admit I find Amazon to be a bit impressive....but they will encounter the innovator's dilemma as they try to expand into new businesses, as we saw with their failed attempt at creating a search engine). Last but not least, companies that try to own the cloud in a dictatorial manner are not going to be able to unbundle/leverage the edge, which is why they will be outperformed by more efficient models (and why I think an open source route is more viable...though of course it remains to be seen how exactly that would play out if at all).

• We know that RSS is a game changer. It seems to be the standard for syndication. To this extent FeedBurner was the most promising company, the heir to Google, in my opinion. Google of course saw this and took care of that issue. Still, though, RSS is largely an untapped resource that is not being fully explored. "How can we build a profitable business that really leverages the disruptive potential of RSS?" is a question I frequently ask myself, and I encourage others to think about it as well. The RSS pie is going to be huge and there will be plenty of it to go around.

Once we learn our lessons, the promise and prosperity of the web await us.