Web 2.0 business models - a business model called "Hope"

There is a Business 2.0 article entitled "Silicon Valley faces Web startup glut - There is a new profusion of well-funded Internet ventures -- but is this a good or a bad thing?" which reports on their Next Net 25 panel discussion. It's an interesting article. Here are some interesting comments concerning business models:

The absence of tested business models is another challenge for today's startups. JotSpot CEO Joe Kraus, whose company builds online collaborative applications, said he regrets not testing subscription plans when he launched his product.

"We put our product in beta, but we didn't put our business model in beta," says Kraus. "Feedback on a free product doesn't teach you squat about how your business model will work."

But others argued that it's a good idea to test a free product and see how users react to it. "If you are attracting users [inexpensively] you are going to make money," said Michael Robertson, CEO of SipPhone, a voice-over-Internet-protocol startup. "Without 'hope' as a business model, there'd be no Google, there'd be no Yahoo."

In my opinion, "Hope" as a business model is about as reliable as the lottery or a slot machine. Yes, Google and Yahoo have thrived, but given the many dot-com failures, those are not enthusiastic odds for a business model called "Hope".

-- Jack Krupansky