Setting sail ...
All dig down sets sail this week into a perfect storm, a little boat armed only with a compass and the wisdom of others who have navigated similar storms and survived. We’re not talking about a closed beta anymore, but we are opening the site to anyone – a vast open sea of users will be lapping against our hull.
In the wake of economic mayhem the closure of one of the most media-hyped “potential” competitors to the iTunes, Spiral Frog is likely to be overlooked but points to some of the obstacles that any upstart digital entertainment site will have to overcome. Spiral Frog forced users to listen to ads in order to download music for “free” in a format that was not iPod friendly. It tried to offer users “free” music and to give iTunes a bit of competition but was doomed to failure having agreed to pay monstrous advances to major record labels hoping to use venture funding given to wanna-be MySpaces like Spiral Frog (with flawed business models) to save them from themselves. Others like QTrax, iMeem and lala.com, may not dead yet but are surely drowning.
And against this backdrop all dig down emerges from nearly 3 years of planning, fund raising, and building to enter a world filled with fear and danger.
The current economic recession and the questionable survival of many Web 2.0 launched in the last couple of years, makes it a good time to wonder what is likely to work in the new “new economy.” The old new economy ended with the dot.com bomb of 2001 and those old economy dinosaurs (like Shelley Taylor, founder of all dig down) are stumped at how we have a repeat performance another new economy with yet again no revenue models, what Reuters referred to this week as “profit free” business. It can’t be just the hubris of youth because many of the venture capitalists that have funded this second wave of no-revenue model websites were around last time, barely 10 years ago. But society has bred yet another new generation of young princes who, fueled by greed, failed to acknowledge or learn from the past.
Sadly the demise of hopeful upstarts in web 2.0 and digital entertainment sites is symptomatic of greed – too much easy money and not enough sense – the very same things has brought the entire world economy to where it is today. So what we can learn from this, apply, and hopefully teach the next generation of young princes? That fundamentals never change: a good business needs a good business model, attention to the voice of the consumer and integrity. Too much power tends to corrupt, but so too does too much money. The arrogant founder of Facebook, Mark Zuckerberg, is said to have responded to criticism of Facebook’s new Twitter-like interface: “the most disruptive companies don't listen to their customers.” Last fall he said, “Growth is primary, revenue is secondary.”
Chris Anderson wrote a great historical perspective of Free as the future of business in Wired published yesterday: “But a generation raised on the free Web is coming of age, and they will find entirely new ways to embrace waste, transforming the world in the process. Because free is what you want — and free, increasingly, is what you're going to get.” Fortunately Chris is sufficiently old world to get the fact that “free” does not mean revenue or profit-free.
The new economy, where businesses lie battered and beaten on the shores, requires new business models or a return to the pre-dot.com business models of the past, where the customer is always right, where companies must generate revenue and where business and their shareholders can be trusted.
Posted at 07:02AM Apr 03, 2009 by shelley in Social Networking | Comments[0]