I agree that the lowering of barriers to entry to start and market a new companies has resulted in more initial startups, but it seems like having lower costs should make it easier to be profitable. The effect of lower costs is probably relatively insignificant for large organizations, but it should make a big difference for “micro-ISV” firms, niche job boards, and other small companies.

“It seemed like every board meeting I was saying the same thing – stop spending money, stop hiring, stop. I was out voted, and the company followed its own path…

Taking risks doesn’t mean raising more money than you realistically need. It doesn’t mean hiring 20 people to do what 4 can do just fine. And it certainly doesn’t mean taking massive losses in exchange for a small amount of revenue.”

http://www.techcrunch.com/2007/12/09/the-twice-shy-entrepreneur/

…Teare’s comments remind me of the scene in Wedding Crashers when Owen Wilson, sitting at the breakfast table, remarks that maybe it was the soft mattress that caused Vince Vaughn to have such rough night of sleep the night before. Vince Vaughn replies, “Yeah, it could have been that – or maybe it was the midnight rape or the gay, nude art show that took place in my room afterwards.” Maybe it was investors that caused Edgeio to fail, or perhaps it was because the site required custom meta tags on every single page of a contributor’s site, or that Edgeio used a completely bizarre XML format that was unique to their site and required a massive rewrite to accommodate the particular demands of a site that never climbed high enough in site rankings to justify the effort, or the fact that the site was completely piecemeal and unprofessional in its look and appearance, which caused serious doubts as to its stability, longevity, and ultimate value to users, contributors, or advertisers. Or perhaps their failure was due to the fact that they never really had a revenue model fully developed or executed that would turn a slightly interesting site/idea into a real business. The last time I looked, generating revenue through the delivery of sufficient value to customers at a level that eventually exceeds costs is the most certain manner by which a business can succeed. Relying on investors to see the future isn’t on the list, no matter how long you make it.

But I also think you are correct in pointing out that the next year or two will be extremely challenging for newer start-ups in this space. There will be plenty of consolidation, failure, pruning, fierce competition, and general chaos. Despite the turbulent environment, however, I believe the pace of new entrants into the market will not slow down much at all next year, with new entrants seemingly joining the fray every week. As well, I think there will also be aggressive innovation from some players that will push the industry forward and raise the bar for the entire industry. Undoubtedly, it will continue to be one of the most dynamic, exciting industries to be a part of in the coming year.

It was a content publication and distribution system that no one really understood and never gained traction.

A grand vision that never materialized. Alas.