@James Franklin – I’m not sure it’s true there is less room for “killer apps” – they just haven’t been thought of yet! That said, I definitely agree that there is plenty of room for more niche apps. And as Ryan points out, with EC2/S3 etc. it’s getting easier to do.

Combine that with consumers and businesses embracing all this in growing numbers, you can see how specialising in niches is the obvious way to cope with a growing and increasingly crowded marketplace.

When you start to really think about the potential for home grown, local, niche apps that solve real problems (not just ones for web designers) for specific groups of people I’m tempted to say that actually that is where the big money is. Not hugely funded valley start ups, but as you correctly point out, in small teams. Potentially the market for niche web apps will massively exceed our expectations and we’ll be busy building apps for teachers and farmers.

However, having said all that – I’m going to contradict myself. Because I think that in the future the winners will be not the apps that get into TechCrunch etc but the ones that can market themselves effectively in their niche, which is a completely new set of skills. And that is where having a VC sat on your board can really help, bring new skills to the table – business, finance and marketing experience. Still, there’s plenty of easier ways to go about getting that…

Life is not just about money.. building a business and selling it for squillions of dollars might make you rich, but happiness is very different.

I love money, but I also love time with my family, my cats and lounging about on the sofa watching telly… the point is I have everything I need… yes I want a fast car, a bigger house and new pants everyday.. (maybe). but who really wants 1 billion dollars?

I run a design agency with my wife and make a very good living. I don’t want to expand, I am happy to stay very small and use this as an advantage for my clients. As Ryan mentioned smaller companies are leaner and faster and better at many things. I can do stuff fast.. like “this afternoon fast” and thats what my clients want. I could grow and have a £1 million turnover, but do I want it? NO thats the answer!

I can make £120K a year as I am and be very happy. If that suddenly drops to £30K because of the so called credit crunch then so be it.. at least I won’t have to lay off staff, or sell my house..

A comfortable living is the best and something that should be advocated rather than this greed for all things money!

Now I know that I am obviously not a web app.. but the same principles apply.. if you look at small local industrial estates (especially in the UK) there are people making hundreds of thousands of pounds a year and they never even use the internet..! Imagine that! A world without Internet! Yet they make a great living making widgets, or selling machinery or doing xyz.. I think this is in a strange way…the future.. Local, small and agile.. something that the internet is forgetting. The average person making money because they are doing something somebody needs, and not talking bullshit just to get rich.

We did apply to WebMission but didn’t get on, however my main reason for wanting to go was to increase PR etc rather than get out to Silicon Valley

I agree with you, entrepreneur in the US is a much cleaner word than over here and it is harder to get acceptance and be respected for success. Having said that though, sometimes in the US you can be respected for success no matter how you got there. That is one thing I do not want replicated here.

Making it easier for people to do great things and helping them along morally, financially and physically is not something that is as good here as it is in the US in the tech sector. I have lived in both and while the UK is getting better every day, it still lags behind tremendously so I do agree with you on that.

Ryan Gallagher.

I actually moved to London (from Sydney) to pursue my web app/start-up… so I don’t know if that puts me on the ‘good’ side of building the scene in London…or on the ‘bad’ scene for abandoning Sydney’s!

We have been building and boot-strapping Vitalist for about a year and a half now and would not have it any other way.

Great post.

Yes, I was referring to modern/recent history. Thankfully, there are a number of examples where individuals have achieved great things; but it is also true that while we champion the underdog (a good thing) we take too much pleasure in cutting down those who strive for great success, or indeed achieve it.

I completely agree that you don’t NEED $10m VC money to build a great company, to suggest otherwise would be folly; my point is that we don’t seem to be good at building big with modern business. The reasons for which are too complex to decipher here, but certainly aiming “only small” is not the place to start from to reverse the trend.

The internet industry IS a good example; most of the dominant brands online ARE U.S. based, even if those running them or whom had a big part in doing so, are British, but based in the valley. We should encourage the appetite to do great things and change the world, not repress it and discourage it.

Being British I have to take exception to that, we did after all rule 75% of the planet and have the largest empire the world has ever seen for about 500 years, leaving a legacy (both good and bad) which anyone would find hard to match.

Even now we have the largest financial capital in the world even though WW2 (which essentially destroyed the UKs economy and boosted many others) was economically speaking, not too long ago.

I assume you mean on more general terms, maybe in IT in recent years?

Ryan Gallagher.

@johno – Totally agree. Thanks for the kind words :)

“Ryan you have been very influential for me personally with your original talk on “how to build a web app for $30k” which made me believe it was possible to start a web business without funding. Without hearing that podcast I probably would never have got anything off the ground.”

@James – Thanks for letting me know. Awesome to know I was an encouragement to you!

My company is called Flaptor (www.flaptor.com), feel free to add us to the list. One of our products (twist.flaptor.com) was recently featured on Techcrunch just because they liked it, but we spend no money on advertising or marketing.

Not everyone has the luxury or means to self-fund a project and getting funding can provide the cushion needed to reach breakeven. We’ve managed to get http://www.mapmytracks.com off the ground by funding it from profits from our consultancy business. This puts pressure on us to make sure we focus on delivering what customers will pay for. Without that focus most web apps will fall into the category of being supported by a small band of passionate users but it will never break through to the main stream.

I strongly recommend DHH’s recent speech at Startup School to anyone thinking of starting on the road building a web app or indeed any type of business for that matter.

There are so many web services out there now, providing all aspects of infrastructure for a web app, that I think the job of building one comes down to knowing which pieces to pull together.

Someone should start a list or something.

This post clarifies your thinking after the negativity that came across from your first post about Web Mission.

After reading this post, I really see no conflict. You are happy to have a lifestyle business, or atleast smaller business – call it what you will – which generates healthy revenues for an SME but which sets its goals at a level which makes you comfortable and satisfies your ambitions. Thats fine.

Some people strive for great success; to conquer the world by a measure which satisfies them as individuals.

Anyone hoping that money alone will make them happy, is clearly naive; but money gives one does give one choices. More money gives one more choices; both to be happy or unhappy infact.

Personally I relish the challenge of being attempting to build something which “changes the world” … or atleast makes its mark as a global brand. Furthermore for me, the fruits I may bear as a consequence will allow me to do things afterwards which will require more than $200,000 a year, or even $1,000,000 a year.

After two months with $50m sitting in my bank I will not be bored or unhappy, but already be out there changing the things in the world that I feel I can change. I already know where I am going with that success when I achieve it.

And note I say “when”.

Some people are born with a desire to build big, with a genuine desire and feeling they can change the world in some way. And that’s the thing – its up to the individual.

If you want to support your adopted home in the way you say (and I have no reason to doubt that at all) then support those who do strive for that illusive goal. As an Englishman, I feel to often in this islands history 9especially in recent times) we have aimed too small; confined ourselves to the mediocre or not had the vision to try the impossible.

Contrast this with the great achievements that have happened because individuals had the vision and the faith -in spite of much criticism- to succeed. Concorde … Virgin … the jet engine … Winston Churchill.

If anything, we are shackled in this country by a lack of support for those who want to aim high. Even if it seems to us beyond all reason, perhaps we should support them, not chastise them?

Having met you briefly at your FOWA conference (in Miami I might add ;-) I was suprised and disappointed to read your original post; this follow up goes some way to explain the message, but stops short of supporting those who want to build big and appears to endorse a “small is beautiful” approach. There should be room for both – and if you really want to support the UK, you should support both.

Winston Churchill is an obvious and easy example for determination in the face of adversity; but for good reason. Many judged his dominating style and burning ambition as not only misguided but flawed. He wasn’t always right; but the drive that he could and would achieve something nothing short of “saving the country” was he believed his destiny.

Building a multi-million pound mobile or internet company, is a few steps short of saving the world; and I believe we should encourage – with wisdom and advice along the way – anyone from the UK who wants to do it.

Arguing amongst ourselves is unhelpful to everyone. I feel you should be supporting those who want to change the world, even if you and your company, are happy not to.

Sure, many people will not make it to the moon, but they’ll have an amazing ride on the way and a fantastic view – even if they only make it far enough to orbit the Earth … the metaphoric equivalent of achieving less than 1% of what you dreamed to do.

Andrew J Scott
Founder/CEO http://www.rummble.com
A WebMission attendee

PS> It is worth clarifying that we each paid £1400 to attend. The UK government supported the project in principle but with virtually no cash (other than providing canapes for one evening event with a reception at the Ambassadors house). The remaining events were supported by sponsors; and we paid for our food and incidentals while there and en route.

Adding to the startups you mentioned – there is mine:

Nozbe – Simply Get Things Done! (http://www.nozbe.com

A web application for getting things done launched last year and now one of the leading GTD web apps on the Internet.

Totally bootstrapped, already profitable and most of all we’re crazy happy about our mission to help busy professionals get more done.

It works in your browser, mobile phone and on the iPhone.

I run it from Warsaw in Poland (Central Europe) and most of the clients are in the USA and western Europe. Our servers are located in the USA.

Yes, I visited the Valley during the Office2.0 Conference where I was a speaker and it was a great visit, but I’m totally happy with running my web app from where I am right now :-)

Go Europe go Europe go!

I think this is just what we need – a little wake-up to the way we run web app companies here in the UK.

Jerome and I are taking the same approach with our design studio focused on mobile innovation. We’re building up our client list, bank balance and experience working with a great selection of people. After 10 months of running the company, we’ve now reached the position where we’re hiring. We only want to grow at one at a time because as we all know, it’s very hard to get/find the right people (that also fit with our company attitude).

We’ve not had (and aren’t looking for) any external investment. There have been a few scares along the way that come with running your first business (e.g. cashflow). An injection of cash may have helped, but it would have also changed the structure and running of the company.

We’re also using a number of different business models with our clients; consultancy models, fixed cost and some quite lucrative revenue shares (we’ve been quite lucky here though, taking on projects that already have consistent and growing levels of revenue).

We’re learning lots and are aware of some of our weaknesses (i.e. mainly lack of experience of running companies and having to fall back to intuition and talking to a lot of friends and people across a variety of industries).

ribot

P.S. We’re looking for an inspiring and energetic (plus points for those that can help us tend to our adopted bonsai tree) interaction designer to join our team at the moment. So if you want to come and work for us by the sea, pop along to our site for contact details.

i’m guessing that you have vocalised what a lot of companies out there actually think and are actually trying to do – growing organically and building profitable businesses.

for some though, a “lifestyle” business is just not ambitious enough – they want more. good luck to them.

Kevin

great follow-up post ;) I find it very inspiring to hear someone as successful as you are with your team talk about job satisfaction and happiness, valuing those over the big bucks. Teaching in adult education I am often thrown by the materialistic motivation of some of my students, finding it quite sad how pride and enjoyment in your work, to some people, seems to be less important than being able to afford a life of luxury.

With companies in so many fields having grown into big faceless monsters, leaving the people aspect behind for sake of making large profits – it is wonderful to find companies like yours who value their staff and aim for a comfortable living, rather than trying to become the next big giant. I think Carsonified are an inspiration, making your points on this topic all the more valid and poignant.

In the middle of launching a little venture myself with a team of very talented freelancers (more on the design and teaching front than app development) – we are motivated by similar principles, hoping to do work which is worthwhile as well as profitable enough. Valuing our team work, job satisfaction and happiness over the large pay-cheque has been the driving force which will hopefully get us there.
(actually, I’m hoping you will be doing another ‘start up clinic’ soon? – I’d love to attend and learn from you and your team)

Thanks for your thoughts ;)

However, it depends on the business you are trying to build – some businesses justify a lot of capital, the problem is when they are forcing themselves down that route.

btw take welovelocal off the list it just flipped to to G-cap! (plus the guys who built it had a lot of capital to invest from their other businesses).