Web 2007 trend: zero cost businesses

Tomorrow at noon Pacific Time a new company will be born. I have video with the CEO coming to ScobleShow. But what was remarkable was just how much was built without spending a single dollar.

This isn’t the first time I’ve heard an entrepreneur tell me that they built a business with zero, or almost no, money, by the way.

This is another thing that Bill Gates doesn’t understand and will have deep implications for everyone. After all, Bill is still struggling to compete with free software.

Now he’s going to have to compete with free companies (or, more accurately, micro financed ones).

By the way, the service is cool and I’m going to use it a lot. It doesn’t have a killer demo like the photo thing that Microsoft showed off last week but it is useful for many of us, which is good enough.

More tomorrow after I get released from NDA at noon.

Too fast for Google Reader?

Anyone notice this? It seems that I can read faster than Google Reader can mark as read. At least it isn’t very good about marking things as read.

So, what I do is read all the way through my river of news and when I get to yesterday’s stuff I mark all as read.

Bill Gates says we’re back in a bubble — kind of

Hmmm, Bill Gates is reported to have said “we’re back kind of in Internet-bubble era in terms of people thinking: ‘OK, traffic. We want traffic. We want traffic. There are still some areas where it is unclear what’s going to come out of that.”

Yup. The bubble is back Bill says.

A few differences I’ve noticed this time around (so far):

1) I haven’t seen a really stupid business model yet. No selling dog food that would never make enough money to pay for the trucks it was being delivered on. Yeah, there’s too many Web 2 businesses with too much reliance on advertising, but most of these businesses are funded for very little money so the pain to investors for the death of these things is going to be very small (and, I predict most of them will make enough to pay salaries and give back something to their investors, so we won’t see a huge number of bankruptcies like the last time).

2) No retail investors. Joe Kraus pointed this out to me. There haven’t been any IPOs. No “mom and dads” buying stock like the last time around.

3) Irrational exuberance isn’t there. Yeah, we all get together at Arrington’s house or a VC’s office and drink a lot of beer and wine. But, really, those parties are small potatoes affairs compared with some of the shindigs in expensive locations last time around. Most Web 2 companies aren’t spending more than a few thousand in marketing and if they do, it’s to hire someone to build a Google keyword buying and SEO strategy.

4) Wealth is transfering not from retail investors, but from big companies who are battling with each other, to both inventors/entrepreneurs and wholesale investors (VCs).

One thing I’ve noticed is that Bill is taking a very conservative approach to Web companies. He even pointed this out to me and Mike Arrington at the Mix06 conference earlier this year.

It’ll be interesting to see if Bill has the last laugh in this game. I usually don’t bet against him, but I am this time around. Why? Cause I think Microsoft will end up spending more to clone some of this stuff than its competitors paid. Yes, even YouTube. Tell me, how will Microsoft create a video service that gets talked about almost nightly on mainstream media?

It’ll have to spend a lot of money buying cool and exclusive content for its Soapbox service. Funny thing. I couldn’t even remember the URL for it and I’m an insider in this industry. How did I find it? Google. Told me the URL is http://soapbox.msn.com/. So, they haven’t even gotten a cool URL yet. Yeah, that won’t cost $1.6 billion. But I keep hearing about YouTube. YouTube this. YouTube that. Everytime I hear about YouTube doing something they extend their lead on Microsoft.

Hey, Bill. You want to be in the advertising business, right?

Go to your advertisers and tell them “it’s not about traffic” and see what they’ll say.