Dot Com Crash the 2nd?

Michael Arrington of Tech Crunch posted a blog post called “An Ignoble But Much Needed End to Web 2.0” where he claims that the recent economic downtown spells the end of  Web 2.0.

It is a bit cynical in my opinion but perhaps there is some truth in that some change is on the way…and change is not necessarily a bad thing.

There is actually a lot of gloomy banter in the blogosphere at the moment about the global economic climate and it’s effect on social media and online marketing expenditure.

Chris Kenton has written an interesting piece titled, The Natural Selection of a Market Recession on the looming recession. He labels the economic meltdown “transformational chaos“, and claims that the massive disruption caused by the financial meltdown is the catalyst for change:

“the role of disruption is to challenge the system and eliminate weaknesses–to burn out the deadwood and disease. Once that happens–assuming the system wasn’t so diseased that it collapses entirely–there’s an opportunity for reorganization and redevelopment, an advancement to a higher order of organization.”

I liked this analogy. Perhaps a stripping down of web 2.0 technologies will occur to yield the authentic truly enabling technologies only…the technologies that aid organisations with real value and provide businesses with solid ROI not the newest and coolest thing that gets the company technologists excited.

The economic climate could indeed ground innovation in a sense rather than stifle it forcing start-ups and web technology vendors to rest their latest technologies on the sound foundations of a robust business model.

I am currently working for a start-up in  the social media space and this subject is quite close to home (and my purse strings).

Citing the economic concept of Pareto optimality my bosses own response to the crisis mirrored this. In focusing on the 80% of functionality using 20% of our internal resource we can better service our clients. It’s basically now all about not losing gas on the wiz bang and focusing on the meat and three vege.

This conservative approach I do not think will hinder innovation but perhaps ground it in economic rationale….and perhaps lead to the  “survival of the fittest” by those for those who can engage an agile and responsive approach.

Just some musings…

Lets Just hope that we all keep our jobs and it doesnt come to this 😛

SRC: Chris Kenton

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3 Comments »

  1. Morgan said

    Great post, Jax. I definitely agree that the current economic situation is going to be a case of survival of the fittest rather then a complete 2.0 crash. Personaly, I don’t see a major downside as it will hopefully produce high quality outcomes in what might otherwise become an over-saturated market (well, i might see a downside if i/we worked @ a crappy start up with a bad business plan, but thankfully we work at a really good one 🙂 ). Who knows. It’ll be interesting to see how it works out.

  2. Hi Jax–

    Thanks for the mention–here as well as on TechCrunch–I appreciate it. I’ve watched a lot of rudderless swings in the past few weeks, from people totally ignoring the meltdown when it got underway, to now suddenly screaming panic in the streets. It’s nice to see some balanced conversation about what’s happening, and what it means. Like you, I think the meltdown is going to be painful, but also a catalyst for innovation. I think the key concern for ventures is surviving the hard, cold wave that’s going to wash over the markets over the next 6 months. If you can survive that, and still find customers, you have some hope of building market share during the long hard recovery. I think the issue isn’t going to be just innovation, it’s determination, quality and conviction. Just my two cents.

    Nice to meet you Jax.

    /chris

  3. Allan said

    Interesting post and I liked how you worked in the Pareto Principle. It’s most definitely a time for the optimists and true entrepreneurs to shine.

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