Although a bit dated, this post by Michael Arrington at TechCrunch provides a great list of seriously legitimate web-based business ideas.  Will follow up on some of these later, but I thought this was a good link from which to begin my blogging here at NewGround Technologies.

These quotes aren’t linked because they were carried in numerous publications.  The first one is a "mashup" of irrelevant irrationality, economic idiocy, and illogical childish "that’s not fair!" temper tantrum.  Said differently, its just stupid!

"During the hurricanes, Google didn’t pay to have the DSL restored," said BellSouth spokesman Jeff Battcher. "We’re paying all that money."

Additional quotes from Bill Smith (BellSouth), Whitacre (SBC/att) and Seidenberg (Verizon) to be added later

Scotsman.com News – Sci-Tech – Welcome to Mars express: only a three hour trip.

AN EXTRAORDINARY "hyperspace" engine that could make interstellar space travel a reality by flying into other dimensions is being investigated by the United States government.

The hypothetical device, which has been outlined in principle but is based on a controversial theory about the fabric of the universe, could potentially allow a spacecraft to travel to Mars in three hours and journey to a star 11 light years away in just 80 days, according to a report in today’s New Scientist magazine.

Tom Evslin discusses Yahoo’s purchase of del.icio.us and touches on several issues of interest and/ or lessons to be learned.  First, he uses this deal as an example to put down the the notion that a company must be built to generate earnings/cash flow in order to create value.  Tom says:

Even if Joshua and company built del.icio.us only for resale, they created real value in aggregating users and creating a folksonomy – a user defined categorization and ranking of web content.  They did a brilliant job of solving the dilemma of all network-value businesses – how do you get to critical mass when there is NO network value for the first users?

Real estate analogy holds, but lots more to it – risk, sub-market knowledge, etc.

Remember Metcalfe’s Law that the value of a network scales with the square of the number of users.  This implies that big networks have huge value but also that small networks have almost no value at all,  Makes it hard to get started.

Del.icio.us had value for user #1 even if it wasn’t “network” value.  Tagging is a good way to remember all the web pages you may want to find again.  That use doesn’t depend on any one else doing any tagging.  So more and more people used del.icio.us to bookmark web pages for later retrieval.

Network value – build it and they will come?

Since the tags are public, anyone can use everyone else’s tags as a way to find information.  So, as soon as enough people tagged for their own selfish purpose, their tags became useful to other people looking for web content.  Moreover, there is information in how many people tagged a particular web site or blog.  Popularity means something although it’s not always clear what.  Soon del.icio.us had real network value and was off to the races.

First to market – ?

Del.icio.us got to a critical mass of users before its competitors.  That’s crucial to a network business because this lead kicks off a virtuous circle. The network service with the most users has the most value to each new user.  Other things being anywhere near equal, the larger network therefore gets more than its share of new users and grows faster than its would-be competitors.  Aggregating users faster than anyone else is why Skype succeeded and it’s why del.icio.us succeeded as well.

From Broadband Reports:

"Cellular networks haven’t taken off [for data] because cellular networks currently suck. Badly. It’s our fault – we’ve done it badly," states Nokia’s Markku Hollstr�m to Silicon.com. Hollstr�m insists that while Wimax wireless broadband will have its niche, "WiMax is hype at the moment – and it’s pretty bad hype."

Here is a great chart prepared by Martin Geddes of Telepocalypse, along with some comments excerpted from his post regarding Ebay’s acquistion of Skype.  Together, they provide the best explanation I have seen for the strategic rationale underlying the deal.  Not surprisingly, my web wanderings have yet to lead me to a financial rationale justifying the multibillion dollar price tag. 

So, what’s the message? Really, it’s quite simple. Marketplace
enablers can be defined by the breadth f goods on offer, and the depth
of support for the transaction they offer. The picture shows how eBay,
Amazon and Google are currently positioned, and how Skype might be
positioned in future. The edges are “clipped” because not all
transactions go to the maximum depth; e.g. not all eBay auctions are
settled via Paypal, and Amazon sometimes hands off fulfillment to 3rd
parties. (The eBay region is made translucent — I hope it’s still
obvious which bits are eBay despite the colour transition.)

At one extreme, Google has a very broad business base (any
commercial transaction that can have an unambiguous keyword associated
with it). But it doesn’t do much beyond that.

At the other extreme is Amazon, which will encase your goods in gift
wrap and even deliver them to you personally when it comes to certain
digital goods.

eBay falls in the middle. Its business model is narrower and
shallower than these extremes, but perhaps encompasses a greater
“commercial land area” as a result.

The purpose of the Skype-eBay deal is to push eBay into a broader
realm of things for sale. For instance, if you want legal advice today,
Google is the only place to go search for it. Want a reputable lawyer
nearby? Sorry, the eBay reputation system doesn’t help you — yet.

Interestingly, Geddes wrote about the potential strategic value of Skype to Google a few weeks before the Ebay transaction.  Here are a couple of excerpts from that post.

Putting together Skype and Google, whilst no match made in heaven, does have a lot of synergy.  The Skype client, or something very like it,
has the potential to re-invent telephony. (That, after all, is the
point of the Stupid Network, not disintermediating legacy voice toll
charges.) It just requires you to stop thinking of telephony as an
application, and instead just see it as a feature of a bigger
communications framework.

The e-commerce value chain

Google is competing in a long transaction value chain that looks something like this:

• Demand stimulation/market formation. Self-awareness of user need,
  awareness of market solution. The domain of traditional marketing.
• Capture attention. The user is presented with ads, and eventually
  sees a proposed solution to a problem the user has. In the user’s mind,
  the connection is ready to be made. In the olde world of directories,
  this is (i) finding the category of vendors who match your problem
  (often somehting that isn’t intuitive if you’re after something more
  complex than a taxi or flowers), and (ii) filtering on the
  locality/capability criteria you have. By the end of this stage the
  user feels “I am aware of a potentially relevant solution to my
  acknowledged problem”.
• Connection. The user clicks on a link. The connection is only
  one-way; the advertiser doesn’t know who the user is, or what they
  really want. An extended Yellow Pages advert is the analogue version of
  connection. The user is now engaged with a particular soltion provider and is paying attention to their message.
• Contact. The user and advertiser engage in bi-directional contact.
  The user presents some form of identity (e.g. gives a phone #, e-mail
  address, etc.). This is like calling the 800 number.
• Transact.  The user’s requirements are codified, and a non-repudiable contract is formed to deliver some good or service.
• Settle.  Payment is remitted.  A third party like a bank or Paypal is normally involved.
• Fulfillment.  The goods are despatched.
• Delivery.  The goods arrive.

Google’s competitors aren’t search engines per se. Google is competing
for transaction value chain slices against eBay, Amazon and even
vertical search like Craigslist.

….Google’s competitors aren’t search engines per se. Google is
competing for transaction value chain slices against eBay, Amazon and
even vertical search like Craigslist. Of course, chop off the search
engine leg today, and the Google animal as a one-trick pony falls over.
But Skype could equally be another leg on the Google animal.

….So Google = totally unstructured transactions with no integation of
user identity; eBay and Amazon = structured transactions, with limited
flexibility, and some user identity (but isolated within their commerce
island).

….Yahoo is a media company, and is unlikely to be the commerce bridge.
eBay is a real threat to Google, and eBay buying Skype would be a
setback for Google. It isn’t hard to see eBay aligning with, say, Ask
Jeeves and using all the Interactive Corp. properties as seeds for an
integrated search and transaction experience. Amazon is a similar
story. Microsoft has execution problems of its own, but knows what’s at
stake and has boundless cash and armies of developers to throw at it.
Google’s aura of invincibility is largely hubris. They need to
diversify up the transaction chain.

Damn good analysis and extraordinarily prescient and timely insights!

In this post, Fred Wilson discusses A VC: Point Solutions vs End to End Solutions.

Point Solutions vs End to End Solutions

In this post, Nicholas Carr asserts that software will have to eventually reach Bell telco levels of reliability.  I agree with this argument and believes it applies to almost all businesses.  Disciplined focus on process management is the only sure-fire way to attaining this standard of reliability (also known as five nines (99.999+%).

With software forming an increasingly vital part of the infrastructure of the world’s economy, reliability, stability and security are paramount concerns. In the past, software companies routinely shipped bug-ridden programs, figuring they could patch and update them later. And their customers took what they were given. That’s history – or will be soon. In the future, the best business software companies will distinguish themselves by producing industrial-strength, bulletproof code – code that approaches Six Sigma standards.