The Utility Web September 11th, 2008

I’m watching the TechCrunch 50 and its great. Ustream.tv are doing a great job streaming and its a very impressive demonstration of their abilities.

I can’t remember who said it, but someone critiqued a company for not being the next FaceBook. This got me thinking about a David Heinemeier Hansson video from StartUp School 08.

I constantly keep hearing about someone planning to be the next Face Book or YouTube, all it seems to be about now is this beast that is the Social Web. While this is great I keep thinking the same thing.

WHAT ABOUT ALL THE OTHER COOL STUFF?

In particular, what about the Utility Web?

What is the Utility Web I hear you say? Well its a mixture of all those cool web applications that sit quietly in the background actually doing something useful while you are buying someone a Han Solo on Face Book.

To be specific, they are apps such as Freshbooks, an online accounting package for freelancers and small business, our own Rush Hour and Oggim DNS service, Amazon AWS, data exchangers like Gnip or as in the Tech Crunch 50 case, Ustream.tv. This list is endless.

The thing about a utility web company, is that they are generally quite focused on solving a problem that exists and focus on one or two areas. They are not wanting to be the next Face Book, they don’t even want to be a Face Book for their given domain, but just good at what they do and profitable.

To use Hannson’s example, 2000 people paying you €50 a month equals €1.2 million in trade. Getting 2000 people to use your utility is the hardest part after you’ve built the killer app.

So don’t get hung up on trying to be the next Face Book, the real money is in being a utility provider to all those web 2.0 social startups.