Undoubtedly the current economic crisis impacting the financial sector is investing in new businesses (startups) on the web, just on the topic in the blog “A VC (VC = Venture Capital), author Fred Wilson says some of his friends as investors are changing their way of deciding which projects to invest in, and apparently now prefer startups that have a commercial product to sell, preferably geared to the business sector by offering a rate of return on investment found In this way companies can be offered through a traditional sales team with a clear argument as how to enhance the benefits the new service or how much you save compared to current costs. Wilson says it is more a lack of patience of many investors, because nobody wants to wait more than six months to see revenues in the projects in which invest.
As mentioned by Wilson, the current model to give everything for free on Internet, what he calls “freemium” is a contraction of the word free (free) and premium (high quality), is currently under pressure as a result of the current financial crisis because money is scarce, and nobody is willing to risk the same way as before, this can lead to a redefinition of services currently exist. And in the long run will mean less dynamism and innovation on the Web in the coming months or even years.
On the other hand Wilson mentions that a business model with a payment service from the beginning, it could mean for small businesses that are behind the new business a heavy burden on their payrolls, to be forced to hire a sales team, not is cheap. From that perspective, Wilson said that a free model at the start to win users and quickly get a feedback from them to improve the service and then offer a service as a paid upgrade to a premium service, remains the best option for small businesses.
Besides the companies “me too”, trying to copy the success of another, simply evaporated veran its funding sources, ie in the coming months we will disappear as such some of the services they offer streaming video (YouTube clones) . The reason for the closure of small imitators is simple, your business model is based on betting that the long-term video-streaming market will grow enough so that their participation will report lower enough traffic to be profitable, since it does not possess to offer any real innovation, and not being able to increase its market share quickly and steadily, simply will be forced to close as a result of the go out of venture capital that are their main source of funding.
It will be interesting to see how well you compare Zoho to Google Docs, as they both offer the same services, the difference is simply the size and ability to be in the market enough, Google has in its favor a diversified source of income and liquid, however Zoho relies on selling your product and venture capital that is raised, which is now scarce.
I wonder what would happen if Blog platforms like Blogger, WordPress.com and LiveJournal, decided to begin charging an annual membership, even $ 5. On the one hand junk blogs that are only links and copy / paste simply disappear at a stroke, the current method of using bots to create thousands of redundant information with blogs and put links and ads there would become economically unfeasible for most hacker. Or if, for example Hotmail, Gmail or Yahoo Mail, decided to charge an annual subscription, the number of accounts also reduce ghosts, as well those who really need a paid email tasty.
All companies that currently offer a free service in exchange for advertising revenue that would offset the loss of advertising because of the recession that soon will face, and thus the quality of service we receive is not affected. But the million dollar question would be how to pay for any of a very small amount of the average Internet user who believes that everything is free and should be free on the net.