FT.com / Business life – The new internet independents

14th of April 2006 by admin

FT.com / Business life – The new internet independents

FIVE FORCES BEHIND THE RISE OF A NEW KIND OF INTERNET ENTREPRENEUR

Lessons of Web 1.0

Entrepreneurs whose paper fortunes turned to dust following the dotcom boom and bust have adopted a more hard-nosed approach to business and a healthy scepticism towards outside investment.

Low-cost web tools

Free open-source web development tools, such as MySQL and PHP, have lowered barriers to entry for aspiring web entrepreneurs.

The ascent of blogs and aggregators

With the rise of blogs or online diaries, the internet has become a highly efficient system for the dissemination of ??ocool??? ideas – an effect that start-ups can use to create a buzz around their sites or services. One rave review from a prominent blogger is sometimes all it takes for an idea to explode into the mainstream. Popular community blogs include Slashdot and Metafilter. Link aggregators such as Digg, a technology news website, and del.icio.us, a social web tagging site, are combed by users searching for the next big thing.

New exit routes

Fall-out from Enron and other corporate scandals has made initial public offerings less appealing to founding teams. Meanwhile, recent buying sprees by companies such as Google, Yahoo and News Corp have put pressure on competitors to keep up. As a result, the latest generation of internet entrepreneurs have plenty of exit options available.

Falling hardware prices

Plummeting hardware prices, particularly for servers and storage, mean that start-ups do not need to break the bank to create an IT infrastructure. Low-end servers capable of servicing a modest start-up’s need can fit into a shoestring budget. Web design and programming can be outsourced to developers in India or eastern Europe.

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