How to Make Money in Web 2.0 Without Knowing Too Much

If you ever wondered where new internet ideas come from – they come from places like the minds of the people who entered the Exit ‘09 contest. The contest, sponsored by a slew of Israeli companies (chief among them Israeli development house Sergata) is open to anyone with a good idea – and if the idea is good enough to get into the contest, they could win a “startup package” worth $250,000 (including $100,000 in cash)! Even better – the format of the contest is a sort of “reality TV” show, where fans of startup ideas can vote for their favorites, with a panel of judges (top people from Google Israel, IBM, The Marker, and others) picking the winner.

Most of the 26 contestants put up a video on the Exit ‘09 site describing their idea or technology. I wrote about the contest in a Jerusalem Post article (which you can see here), but here I wanted to say something about the videos (ie, the ideas) – which got me thinking about the whole business of “innovation.”

There were a couple of really original ideas – one entrepreneur wants to put up a site where people who wear hearing aids can adjust them using a website, another plans a “pet interface” site for dogs and cats who are at home all day alone (they can communicate with their masters, or even with other pets!). Another site would provide a “virtual shrink” for counseling and coaching.

But many of the other ideas seemed to be very similar to already existing web sites and services. So, if the contest was based on “innovation” – having a really good, different idea – many of the contenders wouldn’t have qualified to be in the contest, based on what I could see.

But modern “innovation” – the kind that makes you hundreds of millions on the internet – isn’t necessarily just about having a unique idea. It can be about having a unique twist on an existing idea. It’s about the packaging, the marketing, the way you convince people to use it – the way YOU see it being used. You can take an existing idea and tweak it, turning it into something big – much bigger than the original idea you were tweaking. That’s really all you need!

Believe it or not, one of the biggest “breakthrough ideas” of the internet era – distributing music over a network – is actually a century old! The Tel-Musici Company of Wilmington, Delaware, was, according to this article, streaming music directly to users’ homes in 1909 – via the telephone! Customers would call Tel-Musici and order a selection, and for three cents (seven cents for lengthy operas), the company would stream music to the customer’s phonograph, via a special transmitter connecting the phone and the phonograph that “intensifies and enlarges the volume of sound of all phonographic records but eliminates the metallic, rasping and grating features which have heretofore constituted an objectionable feature of phonographic concerts.”

I couldn’t find any references on whether Napster inventor Shawn Fanning was aware of Tel-Musici, but I wouldn’t be surprised if he was. And there are lots of other examples of successful programs that conquered the market from less well-marketed previous offerings.

In other words, to succeed in the internet business, you don’t necessarily even need an original idea! And one thing I get from watching the videos on the Exit ‘09 site is that you don’t necessarily need much technical knowledge either (many of the presenters say straight out that they don’t have a technical background). And in fact, the premise of Exit ‘09 is that the winning idea gets lots of help from the dozen or so companies offering programming, marketing, and branding help. All that gets outsourced to the service providers. In other words, the only thing you have to bring to the table is the “tweak” – the little twist that will put even an already existing idea into a new light. Exit ‘09 proves it (and a number of friends of mine who began successful startups prove it too).

Wow! It that’s all it takes, what’s stopping us from raking in the bucks?!?