Posted on 4 Comments

I’m Outside The “Frothy Bubble 2.0”

Why do I love holiday weekends? Because the major media goes home and there is a ton of great blog posts out there based on people’s core thoughts everywhere I look (including my blog) instead of the major media discussion follow on. In fact, why does David Sifry of Technorati make the mistake of classifying these big media sites as blogs at all if they don’t allow trackbacks, comments and true discussion? David you should really fix that.

What Scoble talks about in his post along with a cast of great comments is interesting and all too accurate. But the notes about lack of retail investor involvement are encouraging, I don’t think we have Silicon Valley restraint to thank for that I think we have Enron and Sarbanes-Oxley (higher cost of doing IPOs and being public now).

In Flickr doesn’t suck, the Don McAskill post states, “Companies triumph over market leaders all the time. They do it by innovating and executing brilliantly.” What a refreshing thought process. Sad to see it on a site discussing 19 zillion unnecessary photo sharing sites that gets tons of traffic discussing this topic, but refreshing nonetheless. So, maybe people are focusing on the businesses that tech guys are building and hyping because they are missing the critical element – business skills, search engine optimization and related expertise. A product manager is someone with a combination of business and technical skills in every successful company I’ve ever been a part of, I doubt this rule will change. People need to think bigger than “Google will buy us”.

What is wrong with Frothy Bubble 2.0? It’s not based on basic business principles like customer satisfaction, unmet needs and workable business models. I can spot this stuff a mile away when I talk. For example, when I went to Search Engine Strategies last month, one Web 2.0 person I know asked me, “Why are you going to such a boring conference, dude?” That sentence wouldn’t be right without the dude would it? Well, I had the time of my life and I learned a ton of great stuff to boot! Meanwhile his project is $100,000 in expenses and no revenue in sight.

So what is there to do? How about looking at some of the business plans I’ve seen that make sense, have revenue models and either go into new markets or attack fundamental basic flaws in the existing search engines? Naw, that would take real work, less photos at parties and it would take brainstorming and thinking outside of the box.

Think about it, pick up the phone if you have a real idea or you are an angel investor – especially if you are one that doesn’t even own a camera – then I really want to hear from you!!!

4 thoughts on “I’m Outside The “Frothy Bubble 2.0”

  1. I’m curious – why are photo-sharing sites “unnecessary” ?

    Or am I just mis-understanding that sentence? It reads as if all photo sharing sites aren’t necessary, and that they all get tons of traffic, both of which sound wrong.

    FYI, my blog isn’t a site discussing photo sharing sites, as your post seems to imply. It’s my personal blog, and I run one of those “unnecessary” photo sharing sites. One of the few (only?) with a solid, profitable business model, as a matter of fact, which might explain the thought provoking comment. 🙂

    Don

  2. Hi Don,

    Nice to meet you. Don’t you think all the sites, other than yours of course are “unnecessary” photo sharing sites? 🙂

    If your photo sharing site is profitable, great, excellent job! I’m impressed with what you did against the stiff competition. However, your post talked mostly about press coverage issues and that was my first impression of you. Honestly, if the commitment ends after one year of paying $39.95, how vauable is it, what happens if someone becomes deceased? Do those photos no longer have value? Is your true customer the poster or the viewer?

    You apparently have figured that out and made a nice family business ($40*150,000 users). Will it ever be much more than that? What is funny about it is that by managing to find 150,000 people willing to pay your fee, you have the exact demographic advertisers would want!

    To me, photo sharing and video sharing sites are such an overdone segment that I skip almost every post on Techcrunch about them generally. That’s what I want – less attention to the segment because there are large opportunities out there going ignored due to the “noise” – your post yesterday and the valleywag point only confirms that noise is alive and well. That it is what is annoying to me, the whole segment gets 10x more press than it deserves in the first place…

  3. Which sites are you referring to? We try really hard at Technorati to distinguish between blogs and non-blogs…

    If you know of any non-blogs that we’re treating as blogs, please drop me a line at dsifry AT technorati DOT com and let me know which ones they are…

    Dave

  4. David,

    I don’t think all of the other photo sharing sites are “unnecessary,” no. SmugMug isn’t for everyone (or, in fact, isn’t even for most people – most people want free and that’s not us). We don’t even want to build SmugMug to be for most people. No desire to be the market leader.

    So, yes, the other photo sharing sites are necessary. They actually help us – more than 50% of our customers are refugees from other photo sharing sites. They learn both how powerful photo sharing can be as well as how sucky some of our competitors are. When they discover us, they’re thrilled – because we remove the suck.

    As for being a small family business, we’re growing at about 80% per year, so I doubt it’ll remain in that particular category long. We happen to like that growth rate quite a bit – it’s not so fast that we lose our ability to scale, but it’s fast enough that we’re able to grow in the directions we want to.

    90% of our customers stay after their first year, so that first sale is incredibly valuable.

    The equation isn’t $40 * 150,000, though. 20% of our subscribers are Pro level ($150) and 20% are Power level ($60), so it’s a little more complicated (and a little healthier). Still not enormous by any stretch of the imagination, but we’re happy with it. Show me some other so-called ‘Web 2.0’ companies doing as well – I’m not aware of many.

    I realize we have the exact demographic advertisers want – but our customers expressly DO NOT want advertisement, so we don’t care. We’re not gonna piss our customers off.

    Don

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