Much has been said about Web 1.0 companies struggling to adapt to the current dynamics of the Web. No need to call it Web 2.0. The Web has simply evolved and conditions changed. The list of changes is pretty evident:
- Broadband penetration has reached full scale
- Product development costs have fallen dramatically
- Infrastructure services (hosting, storage, databases, etc.) have become a commodity
- Users have become “power users” capable of easily navigating and discovery new things on the Web
- Open platforms and web services are core product elements
- Distribution and syndication ecosystems have taken full shape and are accessible to all – Think SEO, RSS, Widgets, etc.
- Hyper-competition has come to age
These new conditions require a new business approach for all companies looking to succeed, scale and ensure long-term success. The following is my list of key elements the optimal business approach for companies in this new phase of the Web:
- Offer “specialist” products and services rather than multi-purpose ones
- Optimize infrastructure to scale through acquisitions rather internal development
- Focus internal product development on enhancing/evolving core products to maintain leading edge
- Build and sell multiple brands rather than focus on building and selling a single brand
- Leverage third-party monetization solutions to tap on diverse base of advertisers
- Focus on hyper distribution across the Web rather than on “marketing” a single entry point
- Design organization for managing hit-driven dynamics (products and services will grow and decline much faster than they ever have)
Adopting this new business approach is not easy. Many of the new requirements are counterintuitive to business managers and thus continue to face resistance. However, practices will finally change over the next few years as more businesses begin to struggle to secure and maintain scale.
