Digg founder says economic meltdown prime time for Internet startups
Time is GMT + 8 hours Posted: 8-Nov-2008 08:00 hrs
Digg logo. Digg founder Kevin Rose on Friday shined light on a stormy economic landscape, saying the climate is right for launching Internet startups.
Digg founder Kevin Rose on Friday shined light on a stormy economic landscape, saying the climate is right for launching Internet startups.
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Difficulty getting financing means fewer competitors entering the market and that there will be more media attention focused on young technology firms, Rose told those gathered at a Web 2.0 Summit in San Francisco.
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"It will be one of these little valleys where I believe it will be a great time to do something new," Rose said of the economic meltdown blamed for tightly clamping credit markets and venture capitalists' wallets.
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"Funding for consumer-oriented Web companies is going away and there will be a lot of opportunities out there."
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Formidable social websites such as Digg, Facebook, and Flickr launched in 2004 when it was a "tough time" to get funding for websites geared to Internet surfers, according to Rose.
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"We didn't launch during Web 2.0," Rose said, using a common reference to a second-generation Internet defined by online communities and user-shaped content.
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"It is a very difficult time to launch new companies when there is a lot of other stuff going on."
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News-ranking website Digg didn't face much competition during its first six to eight months, got generous coverage in the press and attracted a fan base of "early adopters whose time wasn't split with other products," Rose said.
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Rose urges Internet entrepreneurs to learn from his experience, saying he "kept his day job" and worked on Digg at night and on weekends. He saved money by paying a developer in Nova Scotia to help construct the website.
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Rose said he cut marketing costs by being Digg's front man and getting his message out in "Diggnation" podcasts delivered to iPod MP3 players through Apple's online iTunes store.
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"With just a few thousand dollars I had to get a little scrappy," Rose said of launching Digg on a lean budget.
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Hot micro-blogging service Twitter provides a cost-free way for startup founders to build followings and keep their fans informed.
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Twitter lets people keep each other appraised of their every move by sending Haiku-style text messages to their mobile telephones.
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"I really believe email communication is dead," Rose said. "I believe Twitter has helped me get messages out or in any kind of communication."
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Fledgling Internet companies can improve chances of getting attention by posting online blog commentaries regarding competitors or hot issues in the marketplace.
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Computer servers and bandwidth can be rented to save young companies from having to invest in expensive equipment, according to Rose. — AFP
