Web 2.0 - The New Dot Com

The web 2.0 movement is certainly mainstream at this point. A quick look at the VC investment data shows that this is no longer a fringe movement. Having lived through the dot-com experience, running an Internet start-up at the time (which made it through to this day), I have a few observations about this latest craze.

The number one objection I have to Web 2.0 is the lack of definition for the term itself. Whenever there is a "buzz" about something people can't quite define, I tend to believe it's not real. Or at least, the idea is still in a formation stage. We heard this in the 90's, "the Internet is changing the very fundamentals of business." But when you asked people how, they couldn't really answer. Their only reply was: "You'll see." Well, we certainly saw. Business is business, and always will be. There needs to be a return of x percent in y years, or investments generally are not offered.

Will Web 2.0 bring new and interesting ways to make money? I think so. I'm quite intrigued by the possibilities. But my money is on the sidelines at this point. I think that the money that's out there now is somewhat foolish. Maybe foolish is a little harsh. It's the early-adopter money. It's a typical investment pattern, really. The early money will largely be lost, but is necessary to help define how to use a new technology. The 1% who make it through the first few years will see incredible returns. The other 99%, well...