In the last 7 year Web cycle, how many Web "successes" do we know about that had greater than $20M in real revenue and were sold?<p>I can probably think of about 20, but not 50 or 100. My point here is that it feels like the “big revenue” opportunities for most companies are shrinking quickly.<p>The big revenue / market cap sites are getting diluted by the new free/lean model:<p>Ebay/paid classifieds = craigslist/free
Match.com/paid dating = plentoffish/free
CNN.com/premium news = digg.com/free<p>If that’s the case, I wonder if Web 3.0 is just about a bunch of niche sites in the $5m - $10m range that are run by a dozen (or less) guys in a room. I’m seeing more a trend toward smaller companies owning bigger categories with far less revenue and overhead. I don’t see the $10m venture funded business model really being all the viable if free/cheap is the future since you're not necessarily producing a revenue monster with free/cheap that is IPO worthy.<p>What do you guys think? It may seriously change the way we approach capital in the next round, or even our expectations for the entire Web/startup industry.
I personally think that the "traditional" venture-backed (ie: having raised $10MM+) web startups are going to find acquisitions less rewarding than what they had hoped for.<p>By and large, there have not been a lot of successful Web2.0 startups that have gone on to acquisitions, and many of those that have didn't really end as well as people would have expected.<p>IMO, the current and future wave of web startups is the 3 guys in a basement building out an app and selling it for $3MM-$9MM. Maybe they took a little bit of angel money, maybe they boot-strapped it.<p>In order for a Web/SaaS company to gain real value, they need to be able to have a super-solid revenue model, with a very low COCA (cost of customer acquisition) and customer support/training cost, and TLV for each customer of 5x-10x+ the COCA and CS costs.
also, a good reason why we don't see may web success stories that have revenues over $20M is because large companies have people dedicated to sourcing companies to acquire.<p>If they're good at their job they'll acquire them before they have huge revenues - because its cheaper.