Cambrian Era: Culling and Evolution of Social Media Startups

I continue to think it’s interesting to draw parallels from natural sciences and what’s happening to the social industry, and also how communities behave and grow. From the five eras of the social web (my inspiration was the stratification of this beach cliff), and watching the enterprise software players (my inspiration was spending a day at a tropical aquarium), there’s yet a third metaphor to explore.

The Cambrian explosion is still hotly debated between creationists and evolutionists, a period of time when millions of species proliferated in a relatively short period of time. This explosion, in theory, gave a tremendous amount of deviation of species that paved a way for the creatures who developed the right features to quickly adapt to the changing environment. Despite the millions of species created, only a few survived and evolved to the modern species we now know.

There’s a lot of similar things happening within the startup space, we saw an explosion of startups appear in this second wave of the web, yet this graphic shows that many are going extinct, and a few were acquired by other organisms. What caused this explosion? At least two factors: Injection of VC money into the developer community, and the low barriers to entry for startups to get going. Opensource development software is virtually free, there are many platforms people are building on top of (Facebook platforms is like an operating system, with instant users), and the need for a large data center can be ‘offshored’ to the cloud.

As the industry matures, we should expect some of the few startups to mature, take the lead and become the dominant species, same as what we saw in the first web wave with, ebay, craigstlist, google, yahoo, and others. There were thousands of companies that didn’t make it (I saw this first hand as I worked at the massive web host Exodus in Santa Clara). Going with this metaphor, it’ll be interesting to see which companies develop the features of long term monetization –something we haven’t fully seen across the industry –that will foster an increased chance of survival.

Back to you: Aside from generating revenue, what are the key features these young species/companies need to develop?

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