The Idea Dude


Monday, May 01, 2006

The frailty of the Web 2.0

These are water droplets on a spider's web. An appropriate symbolism of how the web is really very fragile. Each idea is like a droplet that tries to outshine the rest. The sticky web draws the dreamers, entrepreneurs, philosophers, builders like flies. And who is the spider, the great googly-moogly?

There's a great article on the DailyCandy, apparently wooing investors with a $100 million dollar pricetag. DailyCandy is a deliciously written periodic email to it's subscribers about dining, shopping etc. It's a social how-to newsletter that seems to impress the rich wannabees and those who already are rich but want to make sure they are in tune with what's in and what's not. The advertising is mingled with the content so it's never clear whether they are sharing or selling. A six year dream in the making, it started with 700 names on the list and is now boasting 1.2 million subscribers with city additions (sounds like Craigslist, doesn't it? albeit in a different category).

I found this an amazing story because its asset is not a website or web traffic or but an email list! If you factor in a lifetime value of each subscriber of at least $100, then maybe the price tag is not as high as you would think. As the article puts it so well...'DailyCandy's subscriber list can be taken as the Holy Grail of e-commerce: a million trendy female shoppers, begging to be spammed'. Is this Web 2.0? same modus operandi, building a community, targeted vertical, sounds like a vintage wine compared to the New Age blogs and RSS feeds. Nevertheless, the underlying principles are pretty much the same. Find a niche and make them your family.

The lesson here is that like many good things (even MySpace) success is not overnight...there used to be a dotcom maxim that said the business cycle is 2.5 - 3 years, if you don't make it then, it's another 3 year cycle. I guess what they were really saying that it takes 2-3 years to make any idea work (the norm not the exception). If you don't succeed by then, chances are you need to tweak, change or adapt your business model which essentially means you're beating a new drum. As for DailyCandy, the writer of the article sums it the best, that it has to avoid degenerating from haute couture to your average strip mall and bargain basement. Does that mean that MySpace may one day become MySlum?...


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