Web 2.0 Zucker Baby on Meth
For as long as mankind has been exchanging goods and services for money business has always need some sort of road map to help it grow. It’s called having a business plan, a business model and it usually requires that the business be making money in order to pay the re-occurring costs of doing business in the first.
It has never mattered if you borrowed money to get started or if you got investors to turn over their cash. Everyone at the table knew that the money would get paid back because you had a good solid business plan. If you didn’t have a solid business plan you soon found yourself kicked from the table.
Then along comes Web 2.0 and says screw that we don’t need business plans. We don’t need them because we can get advertising to pay for all our costs or there are VC that will pay us to play at being a business until we can sucker in some bigger company to buy us. Once in awhile though you get one of these Web 2.0 start ups that for whatever reason take to the stratosphere and become a VC black hole all without having the first clue of how they are really going to make money. Two examples of this have to be Twitter and Facebook.
Both these companies are the kings of Web 2.0 social media on the Internet and both of them only stay alive because of VC dollars. Neither one of them have a business plan; or at least not one that has been made public, and neither one plans on having one for sometime - even with our economic spiral downward. Then yesterday Mark Zuckerberg the CEO of Facebook said in an interview in Germany that Facebook doesn’t plan on having a business model for at least another three years. As Peter Kafka over at Silicon Valley Insider pointed out in a post today
If you’re counting, three years from now would be nearly 7 years since Mark (and others) started Facebook at Harvard, and four years since Microsoft plowed $240 million into the company.
WTF! seven years without a business plan and no real guarantee that in three years from now they will have one. Can you imagine any major corporation doing business today such as Toyota, AT&T or GE turning to their shareholders and telling them that the company wouldn’t be earning any money for the next three years. you’d see such a change in the board of directors and upper management your head would spin. So why is it that these social media companies think they are any different.
From what little I remember of Business 101 and running a few businesses myself I was always told that you have five years to prove your business. If it isn’t making money at that point statistics show you’ll go tits up at some point after that. The idea of a business plan is that you plan .. you plan on how you are going to make money not just hold your hands up to the sky hoping the money will drop from the heavens. Not so with Facebook apparently, as it doesn’t think it needs a business plan and that by some weird gestalt one will come to them
I’m pretty sure that we will find an analogous business model. But we are experimenting already. One group is very focused on targeting; another part is focused on social recommendation from your friends. In three years from now we have to figure out what the optimum model is. But that is not our primary focus today.
FAZ: Your primary focus today is growth?
Mark Zuckerberg: Growth is primary, revenue is secondary.
Revenue is secondary .. wow …. talk about turning some fundamental rules of business upside down. I would have thought that having them both go hand it hand would be the better plan not to mention a more profitable one for all involved.
http://www.planetnetopia.com/forum/posts/id_316/title_web-2-0-zucker-baby-on-meth/
WalKnDude
*nofear*
