A nice articulation from Peter Rip of why many entrepreneurs will face the same problems in Web 2.0 that investors faced in Web 1.0:
The root causes are the same:
- It is very easy to make the initial commitment (founding or funding).
- Underestimation of how many had the same conclusion.
- Underestimation of survival requirements for the ‘too many competitors’ case.
Reduced barriers to entry always look attractive to the entrants. But once you enter, you are an incumbent.