A VC’s View of Web 2.0

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An interesting interview with Ray Lane of Kleiner Perkins about Web 2.0 in BusinessWeekonline:

“Does that mean that ultimately big companies, such as existing software companies, will get most of this business?

Not necessarily. I see a lot of software companies today saying, “We’re going to change our business from a product company to a service company and put our software online.” But there are problems with that.

No. 1, the software company typically does not have the DNA to be a service company. It is a software company because the smartest guys in the company are developing new code, and that’s what they want to do, as opposed to what is the boring task of serving a customer. Salesforce.com does that. They’re not a perfect company, but they were developed with an intent from the start to be a service company.

Also, product management is different. The sales force is different. Every function of the company needs to be changed if you’re serious about being a service company. It’s a two- or three-year transition at minimum. It’s not a flip of the switch.”

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