The Lowered Cost Of Entry For Web 2.0: Truemors Vs. Mahalo

June 5, 2007

Guy Kawasaki recently launched his own Web 2.0 site, Truemors, and wrote a post laying out his relatively low development costs.

You might read Guy’s post and think Truemors is the greatest thing ever, or shake your head in disgust.

Why it’s good:

Why it’s bad:

I’ve had several half-baked ideas myself, including strapping a web cam to our cats to see what they do while we’re at work. Lo and behold, someone created LOLcatcam (which was taken down). While funny, it points out some vapidity surrounding Web 2.0 these days – I found the cat-cam way more interesting than Justin.TV.

Don’t get me wrong; I think it’s cool for people to put up their own money, bootstrap a company, and get an idea going on their own or with a small group of dedicated employees. If you crash and burn it’s only yourselves that suffer, and hey, at least you tried.

But the lowered bar of entry might start attracting the wrong people – those after easy money and aren’t interested in utility; just profit. These types will surely inflate any potential investment bubble – when money comes first and the idea later. People seem too focused on the low cost outlay, not the idea.

I wax nostalgic for the time when building a cool technology meant moving everyone forward – building something open ended and useful. At the tail end of any boom it seems “cool technology” devolves into nothing more than a marketing exercise – labelling it “Web #.0,” paying someone else to do the work, managing the burn rate, and hoping to sell the company before the new car smell wears off.

Relativity

I also observe that “low cost ” is relative. I’m sure for any of the Silicon Valley VC / executive elite, $12,000 is peanuts and so they’re all oohing and ahing over how cheap creating a company suddenly is. Meanwhile, the actual developers scratch their heads at why this simple site cost so much, with some folks on Guy’s site bragging in the comments that they could whip up something similar in a day.

The disparity of valuation the VC / executives means one thing: there’s a lot of money that is poised to go from the former to the latter. This is a very bubble-icous sign.

Watching These Two

Right now, I’m keeping my eye on two Web 2.0 companies just launched by prominent founders as sort of a Bubble 2.0 litmus test: Jason Calacanis with Mahalo, and the aforementioned Guy Kawasaki and Truemors. I’ll do more in-depth reviews of both in future posts for my “Interesting” series.

Some notes:

At this stage of the game, however, the buzz around Mahalo is certainly more positive than that of Truemors, which was called the worst website ever by the Inquirer (the link to that article now has the third spot for a Google Search for “worst website ever”).

Two bloggers I respect, WinExtra and Mathew Ingram both didn’t hold back in their opinion that Guy is wasting his money, while Andy Beard thinks that even if the site is flawed, Truemors is worth more than people realize.

But oddly enough, even though I admire the boot-strapping ability of Truemors, I’m liking the idea and usefulness of Mahalo better.

Only time will tell. Meanwhile I’ll have some Amici’s Pizza as I think the YouTube sale to Google was the high point of Web 2.0. These two companies – as successful as they may ultimately be monetary wise – are as removed from the type of innovation I admire (think Steve Wozniak) as Paris Hilton from an Academy Award.

Just stop and think about how Apple Computer was founded in 1976 for $1,300. Even adjusted for inflation, that’s about $6,000. That’s half Guy’s number.

Update: Check out this Digg comment thread regarding Truemors, including the “digg effect” that brought the site down.