The problem he's describing is certainly real. There are characteristic traps young founders fall into when thinking of startup ideas.
I don't think he's gotten to the root of the problem, though. The root of the problem is not certain categories of ideas. It's a half-baked way of looking at the world.
As long as you avoid that, there are good ideas to be had in several of the categories he describes. For example, I'm sure there will be huge new businesses that depend mainly on advertising. Is Google going to be the last, ever? And if “Flickr + ___” is a recipe for failure, it wasn't always. YouTube's goal was to be the Flickr of video, and that worked out well for them.
Agreed - worth considering too, that kids like to get into t-shirts because it "seems pretty easy, like, I could make cool t-shirts". Then when it comes time for logistics, shipping, dealing with returns/bad addresses, customers pissed that their shirt hasn't come in the mail, etc, etc, etc. - "I'm done. I quit this f*ing business."
It looks to me like most monumental successes are created one of two ways: Out of love, or out of messing around. Savvy, experienced entrepreneurs and investors can make some bucks just "doing business", but when you haven't got the experience, love or curiosity is the fuel that keeps you going.
For example, I'm sure there will be huge new businesses that depend mainly on advertising. Is Google going to be the last, ever?
For better or worse, Google defines the baseline in online advertising. New companies can't compete on ubiquity, so their service has to be superior in how it targets specific demographics. Assuming that succeeds, they then have to then figure out how to leverage that limited dominance into something broader.
It's certainly possible, but it's also certainly more difficult than it was ten years ago.
The problem with startups comparing their potential success to Google is that your business model probably isn't Google-like at all.
The standard startup ad-based model is: offer content, show ads. This is not Google's model.
Google's model is rather: build up a massive 3rd-party network of ad displays, and then broker ads onto this ginormous network.
Google is not a ad-displayer, they're an ad-broker. Unless you want to tackle things much the same way, you won't be replicating the success of Google.
I thought about pointing this out, but Google displayed ads on their site before anything else, and the ad network was an outgrowth of their initial success.
Anyone who has enough people wanting to advertise with them can create an affiliate network. Creating that initial demand strikes me as much more difficult.
It's true they did - but bear in mind that (AFAIK) displaying ads just on their own pages was never profitable. Google didn't actually start raking in the cash until they got into adwords and adsense.
IMHO it's more difficult to create the affiliate network by virtue of the fact that to be profitable, your affiliate network needs to be obscenely large.
Search ads have much more clicks per page view because they are better targeted. Google generated 67% of their revenues in Q4 2008 from their own site and just 30% from the AdSense network.
>so their service has to be superior in how it targets specific demographics
I think you are mistaken. You are taking ideas from the old magazine world of advertising. I don't think demographics, appealing to a certain demographic or any such thing. Google's success has nothing to do with this. In fact, in many ways it is the opposite of magazine advertising.
The normal ad model is distribute a magazine & plaster ads on it or create an event & plaster sponsors on it. The ad has nothing to do with the thing the ad is on. Google's model is different (for search anyway).
For some businesses, being found on Google means business. They are willing to pay for Google to do what they do anyway, send searchers to web pages. They're genius is that their ads are not ads.
There's always an intermediate step between advertising and making money off the consumer interest it generates. The Internet hasn't changed that.
Google targets people who are searching for a keyword. In some cases, these may be people who are looking to buy a product. However, people looking to hire (say) expert C++ programmers can do better than advertising against a keyword, because searching for that term implies nothing about skill or experience. In this particular case, something like LinkedIn would be a much more valuable advertising resource, because it has much more relevant information about the audience.
Google has an extremely clever advertising model. In many cases it is much more efficient and effective than traditional print and television advertisements. But it's still advertising.
It's not the internet that changes that. It's Google specifically. IE, they are not following an advertising model in the sense that magazines or radio shows are.
They are certainly monetising, but I think it is a mistake toi think of it in those terms. Google is more similar to classifieds, service directories or even ebay then it is to the traditional advertising model.
I don't think he's gotten to the root of the problem, though. The root of the problem is not certain categories of ideas. It's a half-baked way of looking at the world.
As long as you avoid that, there are good ideas to be had in several of the categories he describes. For example, I'm sure there will be huge new businesses that depend mainly on advertising. Is Google going to be the last, ever? And if “Flickr + ___” is a recipe for failure, it wasn't always. YouTube's goal was to be the Flickr of video, and that worked out well for them.