Do you wonder what all the Web 2.0 hype is?

Do you want to read an article that explains it in business terms, rather than technology terms?

Well honestly the technology is way more fun than the business view in this discussion, but it’s not that the business view isn’t cool. It’s just that it’s not nearly as different as the tech.

Paul Graham totally demystifies this topic in his excellent article on his website. He has a real gift for writing about technology. For months I’ve been trying to figure out how to explain the business opportunity to some folks, and he does it in one sentence.

If you can figure out a way to turn a billion dollar industry into a fifty million dollar industry, so much the better, if all fifty million go to you.

That’s pretty much all the business mind needs to know about Web 2.0. Obviously there’s much more about how to do that, but there you are.

I highly recommend you read the whole article.

Last week I talked about how small businesses couldn’t afford to invest in technology projects that didn’t show immediate returns. I offered that 30 days is the outer limit of acceptable time to implementation.

So how does a small business get anything meaningful done within 30 days?

Automate a specific business activity that you already do and understand. Automate just that activity. This will help you get something that can show an immediate return for your business because it will have a clearly defined purpose. This may seem kind of hard to understand, or confusing. If it does it’s probably because we’re so used to buying packaged software, which is commonly referred to as “Commercial Off the Shelf Software”.

Naturally this becomes an acronym COTS because computer concepts seem to get acronyms quicker than, well, anything I can think of.

COTS is targeted to many customers in many different business environments. Most small businesses only have experience buying this kind of prepackaged software, and so really struggle with purchasing custom developed software. For many business applications COTS software is just fine because the costs of buying it and deploying it can be very low compared to custom application development.

Custom application development is completely different from buying software off the shelf and implementing it. In this post I’ll talk about the three biggest mistakes that small businesses make when they approach custom application development projects as if they were buying off the shelf software.

These three mistakes are based on approaching custom software developers with these questions:

• We’re used to buying software from a catalog and making it work, why can’t we just treat this like that?
• We can’t decide what features are really going to be useful so why don’t we just ask for everything and then see what we can afford?

• Finally the biggest mistake everyone makes. We don’t want to spend alot of time on this internally so can you just build for us what everyone else in our business asks you to build so we can spend as little time on it as possible?

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Businesses are focused on a pretty discrete set of activities, based on their size

• Startups and small businesses should focus all their efforts on finding new customers.
• Medium Sized Businesses should focus their efforts on growing their organization by solving their cashflow challenges by streamlining their accounting and investing in growth for their most profitable lines of business (as indicated by their accounting)
• Above medium size, investing in internal IT staff and infrastructure starts to make sense. This means that below 10M in annual revenue you have to execute your growth strategies while using outside consultants or vendors for your technology projects.

For the last two years I’ve been looking for ways to serve the needs of startups, small businesses, and even some medium sized businesses. I’ve been focusing on those businesses that are looking for technology, specifically web/internet based technology to provide a growth opportunity.

I’ve come to the following conclusions

• If all you need is a simple web site. Don’t go out looking for a “web shop” that can implement a simple website, rather start blogging about your business.
  A simple online journal, that you regularly post to, will deliver both a simple website and provide you much, much more visibility than an online brochure ever could.
• If you’re looking for technology to provide you a growth opportunity, you have to invest in creating something really unique and easy to explain.
  You should be able to easily describe your repeatable, profitable business process. If you can do that, then quantifying how much to invest in automating that process becomes very easy.
• You must implement your solution and get it in front of it’s intended audience in no more than 30 days