Who Needs Google? Ning, ShopWiki, Wetpaint
In the “Pmarca Guide to Startups,” Marc Andreessen shares at his new blog his “accumulated knowledge and experience in building start-ups,” citing his recent venure Ning, a ”private consumer Internet company.”
What is great about “doing a startup,” for Andreessen?
Most fundamentally, the opportunity to be in control of your own destiny — you get to succeed or fail on your own, and you don’t have some bozo telling you what to do. For a certain kind of personality, this alone is reason enough to do a startup.
What about a startup being in control of its own destiny, then?
Ning, as a case in point. What is Ning’s business model? Ning asks, and answers:
When you create your free social network on Ning, we run ads on the right hand side of every page to support the service. That’s our main souce of income.
What ads does Ning run “on the right hand side of every page”? Google AdSense.
Ning dependency upon a third-party for its revenues is not an entrepreneurial model worthy of emulation.
The downside risks of a third-party, such as Google AdSense, monetization of a startup include:
No proprietary monetization model competive advantage,
At the whim of the performance (or not) of the third party,
Startup driven revenues are shared with a third party,
Limited, or no, direct paying client relationships,
Non-innovator, “me too” image before users and tech community,
Difficult to iterate revenue stream…
Andreessen’s Ning is not the only Web 1.0 veteran’s try at Web 2.0 entrepreneurship. Kevin Ryan, formerly of DoubleClick fame and Ben Elowitz, an alum of both Blue Nile and Fatbrain, have also joined the social startup fray: Ryan is ShopWiki CEO & Co-Founder and Elowitz is Wetpaint CEO.
Ning, ShopWiki and Wetpaint are all the Web 2.0 brainchilds of entrepreneurs who made their mark in the first commercial wave of the Internet.
What else do the three Web 2.0 startups have in common? All are highly Google dependent for their livelihoods.
Ryan and Elowitz are in the Google AdSense revenue model camp, same as Andreessen.
When I interviewed Elowitz and Ryan about their startups last year, I asked about the long term viability of a Google AdSense dependent business model.
Ryan stressed a technology differentiation strategy, citing ”advanced Web crawling technology,” not surprising given the founding team’s DoubleClick background. No perceived need to differentiate on the ShopWiki revenue model front, though, given the turnkey, easy money AdSense spigot.
While Elowitz comes from a sales driven ecommerce world, he also believes in the beauty of contextual advertising, of the AdSense variety.
It is not just “lone” entrepreneurs, however, that are outsourcing their economic future to Google: Barry Diller’s IAC is, so far, content to wage Ask.com search engine war against arch “rival” Google, while at the same time rendering Ask.com dependent upon key “partner” Google for its search advertising livelihood.
SEE: IAC’s Ask.com: Beware Google, Ask Yahoo!
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