IMA/ES Web 2.0 Event Wrap-Up

Last night Information Management Association and Entrepreneur Society put on a panel entitled "McCombs Web 2.0 Panel".  I had the initial vision for the event and me and John Reed (contributing author) spearheaded the event.  The panelests were Alex Muse from M|Ventures (who just blogged about the event), Brian Oberkirch from Weblogs Work and Like It Matters (who posted an AWESOME clickstream for us to get started on our Web 2.0 education), Dave Panos from Pluck and Ben Brown from founder of Consumating.com and editor of Austinist (Ben also just blogged about the event).

First off, I'd like to sincerely thank all of our panelists for coming out.  I encourage everyone to check out their blogs and companies. 

I think the event was a success.  That being said, I think that "Web 2.0" is a tough concept to convey in one hour to people who may not now anything about it.  It was funny to see quite a few blank stares in the audience as our panelists held forth on "del.icio.us streams", "social bookmarking", etc.  I do think we did a pretty decent job of giving at least a little taste of what Web 2.0 is about. 

Here's my main takeaways from the event:

• Web 2.0 is not really a technology revolution.  Yes, AJAX, Ruby and open source software have made the capital and time costs of developing good web software lower -- BUT, it's more about how people are putting technologies together and internet has changed from a social/cultural perspective.  The internet is becoming more integrated into the fabric of our lives.  So Web 2.0 is, if anything, a revolution of ideas (?).  I like Ben Brown's example of how the big idea in "Web 1.0" companies was simply using the web as a better distribution channel to make it easier to order a tangible object --- but it was still about tangible objects (mainly), whereas "Web 2.0" ideas are much more about how to use the internet to create new ways to socialize, communicate, express yourself and exist on the web.
• The venture model for Web 2.0 is different than the dotcom model.  Now, people need a good idea first and VC's will give them a little money first to grow the idea and see if it works.
• The biggest impact of Web 2.0 right now may be on advertising and media.  Advertising in Web 2.0 has become much more targeted and effective because Web 2.0 is also all about better relevance.  Blogging has, to a certain extent, disintermediated conventional journalism.
• To a certain extent, I think that "Web 2.0" is simply a label for the phenomenon that can be described as "the internet grows up a little".  And also, as Brian mentioned, the whole concept of a "version" is a little misleading.  This is not a quantum process -- i.e. there's not discrete state of the web.  It's continuously evolving.  But I guess "Web 2.0" is just a handy label for it.  Because isn't it simply, to a certain extent, the internet just getting better at being truly integrated into our lives?
• Alex had some really interesting comments about the panel as well, as I mentioned.  He made an interesting comparison between Consumating and Pluck, for example.  The gist being that Pluck, although it is clearly creating and marketing "Web 2.0" tools, was built in somewhat more of a "Web 1.0" fashion, specifically with regards to the venture model.  Whereas Consumating was started in more of what Alex would call the "Web 2.0" style, with a very small capital outlay, doing something cool for a very, very small segment of users but doing it in a way that creates a lot of value for them.  His off-the-cuff guess of a valuation for Consumating is $1-9MM....  thoughts?

Again -- thanks to the Panelists and thanks to YOU who attended!

I encourage people to subscribe to this blog, read all the blogs mentioned in this post, check out Brian's clickstream, check out the WIKI that we creataed for the Web 2.0 event and START BLOGGING. :)  Remember, it's a great way to network.  A lot of corporate recruiters blog!

Comments

[John Reed]

Kayvaan,

Great summary and kudos to you for the event. It's great to see a reasonable amount of interest in software/the Internet from MBA students.

A few comments on your post above:

1. The VC model has changed in recent years, but more towards working with proven/known management talent than towards "great ideas" alone. Because liquidity is harder to achieve these days, execution is a much, much more important requirement for a VC to get significant returns.

2. Consumating is a great idea, especially because it embraces one of the most important aspects of Web 2.0 - embrace the niche. But anyone who pays even $1MM for the idea, is banking on a very big market for the niche, Consumating will own the niche, and/or the niche will generate enough revenue to justify the purchase. At 6k+ users now, that places user value at $167 each, for a $1MM valuation.

The question is though, how much is a user worth, and for how long? I think Ben may do very well from the site, but can an investor/acquirer make enough $ to justify investment?

3. Do "advertising only" business models make anyone else nervous? I can't recall when I last bought something specifically because of an advertisement, at least not something I wasn't already looking to buy.

It's obviously working very well for Google, but something about it makes me wonder if their is enough user volume/growth to sustain several big ad-driven companies. My guess it will be very expensive to take a big chunk from Google. But it may be necessary regardless.