In the dot-com days of the late 90’s internet entrepreneurs would come up with a brilliant idea, pitch it to venture capitalists, get a few million dollars in funding and hire an army of people to develop an unprofitable business.  In those days, as crazy as this may seem today, profitability was not a major concern.  The idea was to grow the business as fast as you possibly could and go public so that you could keep on growing.  And in order to do that you had to spend money – lots of money.  Then reality hit.  The dot-com bubble burst, the Nasdaq crashed, and college graduates gave up their c-level titles and went back to grad school.

A lot has changed since then.  Internet entrepreneurs learned their lessons the hard away and are coming back to ride the wave of Web 2.0.  But this time they are not going after multi-million dollars rounds of financing from venture capitalists.  Instead, the new web entrepreneurs are building their businesses with very little capital, no business plan, and the attitude that the business model will be adjusted along the way.  The key to success now is to experiment with ideas without spending a lot of money.  If it sticks, great.  If it doesn’t, move on to the next idea.  After all, the risks are low and you can afford to experiment until you hit on the right idea.

This has been made possible by a series of developments that have made life much easier for web entrepreneurs.  First, open source has been a phenomenal success and a great source of free software that developers can use to build their applications.  In the past, for example, if a developer wanted to use a database for storing and retrieving information in a reliable and scalable manner they had to buy licenses from one of the database giants such as Oracle.  Today, the free open source database MySQL can be used by most web applications except for the most demanding, high volume transaction systems.  Free development languages such as php have opened the gates for any developer with a very small budget to put together some very impressive web applications.

In addition to open source, outsourcing has been playing a huge role in reducing development costs.  Highly skilled developers in India and other offshore locations cost a fraction of what they would cost in the US.  To give you a sense of the magnitude of what is possible today, take a look at the post By The Numbers: How I built a Web 2.0, User Generated Content, Citizen Journalism, Long-Tail, Social Media Site for $12,107.09 from Guy Kawasaky’s blog regarding his recently launched venture called Truemors.

If you have any doubts about what is possible today and Kawasaki’s own venture is not sufficient to convince you that times have changed, take a look at the video in the post No Plan, No Capital, No Model…No Problem where Kawasaki moderates a panel of entrepreneurs at the Churchill Club.  If you are an aspiring web entrepreneur and this video does not get you excited, I don’t know what will.

Web entrepreneurs are definitely changing the game.  Nowadays the only true barriers between aspiring web entrepreneurs and success is creativity and persistence.  You have to be creative to come up with new ideas, but you don’t have to be right the first time.  The barriers to entry are so low that you can afford to be wrong a few times.  You have to be persistent and be willing to spend the time experimenting with different ideas, but the opportunities on the web today are wide open and the internet just keeps on growing.

As Kawasaki wisely concluded at the end of the panel discussion regarding the prospects for entrepreneurs:

“Life is Good Right Now, Life is good!  Now is the time to do something.”