by: Idris Mootee
The scene is a Starbucks in Downtown Toronto, Canada. I am sure similar
scenes are happening in London, Amsterdam, San Francisco or Boston. Four young
men and women are doing a five-minute web 2.0 idea pitch from a Macbook to two
venture capitalists. One of them asked how much it had burnt so far for the
prototype. The reply was “Five”. I think the VCs thought they meant
$50,000 until another question revealed it was $5,000, and the total funds
being sought a mere $350,000 – definitely pocket change for the VCs who think
in millions.
This story is exceptional something that shows the lean and mean face
of the new startup boom, and thanks to low cost infrastructures, cheap and
powerful bandwidth and the ease with which websites can be set up – it costs
1/3 the price it costs to set up a site than in 2000. This is not another
bubble. This is the real thing. These days the creative class of young men and
women are working on something that is actually a working part of a larger
shift – not just a piece of napkin with an idea scrawled on it.
The new boom
is turbo-charged by a new generation of entrepreneurs who are investing money
made from the previous boom. The trend for low-cost startups is generating a
new class of venture capitalists prepared to invest small-ish sums of money,
unlike big capitalists which prefer to spend millions on one startup. Many are
small millionaires who made their money working at the Google of the world and
are now ready to play for themselves. There is no way for organizations (even
Google) to retain these people as they believe they owe it to themselves.
Hundreds of the 2,321 Googlers (hired before their IPO) in Aug 2004 have passed
their fourth anniversary. Now they are free to cash in the final portions of
their pre-IPO options, collectively worth about $2.6 billion before taxes.
“There’s
the notion that it’s not as much fun and that you don’t have to stay there if
you don’t want to,” said Doug Edwards, a senior marketing guy who resigned
in 2005, shortly after his boss left. “You start looking for excuses, and
they are not hard to find.”
This
is the new class of entrepreneurs who are not motivated by greed or lavish
lifestyles or big egos. They simply do what they’re supposed to do. This is a
new eco-system that powered the web 2.0 wave into the next stage.
I am sharing
a presentation here for those who are ready to take this path or exploring the
idea. You can start a web 2.0 company for $5,000. Some ideas may still require
$5 million. But there is never a better chance than now. May be it’s time for
me to join the game. Oops, I need to start writing my “next-big-idea”
business plan now.
Original
Post: http://mootee.typepad.com/innovation_playground/2007/07/web-20-entrepre.html
