Echoing some of the thoughts in my last post – built to last, exit criteria and venture economics ought to change in the new venture economics of Web 2.0. Some of the key factors that determine the value of a company include founding team, cashflow, members/customers in the community, visitors to a web site and the technology. Not many years ago, intellectual property and patents used to be extremely important for determining the valuation of a company. But apparently in the new venture economics, more and more focus is kept on the community.
Naval Ravikant, has done an insightful analysis on valuation of one of the most successful Web 2.0 companies – Craiglist. Naval proves (hypthetically) that Craiglist is worth more than Ebay. I agree.
Let’s change the world!