Made It to Web2.0 Expo – Wow!

It’s a gorgeous day in San Francisco, and I arrived at Moscone West about 11:00 am to find it one crowded place. Still trying to get my bearings, and starting to run into people I know… But I was able to bop right into one session before lunch: “Open Source Business Models for Web2.0.” John Roberts, CEO and cofounder of SugarCRM, told us about the non-traditional way his company started: really as a project, then it wasn’t incorporated for almost two years. Funding came even later. “Companies are starting differently these days,” he said. Now, SugarCRM has 100+ employees, 1200 customers in 30 countries, 100,000 users, and 7000 registered developers. How are they 2.0? “We sell subscriptions, not licenses,” he said. “And, as Tim O’Reilly would define it, we trust our users as co-developers.”

Sharing this session with Roberts was Marten Mickos of MySQL. The Web2.0 motto, he said, should be “Fail fast, scale fast” — alluding to how software iterations and testing can be so much faster today. He said MySQL is now up to 50,000 downloads per day. He guesses there are about 30 million developers on the ‘Net today. “That’s 100x my estimate of the number of developers it took to get us this far in the current information society.” He noted that his closed-source competitor has 56,000 paid employees “who go to work each day whether they like it or not.” Whereas MySQL has “50,000 new, passionate amateurs volunteering to help make our product better every day.” Mickos then gave us a rundown of the Web2.0 business models he sees today: (1) do it as a hobby and have fun, (2) get acquired, (3) build traffic and sell ads, (4) build a virtual world and sell premium goods, or (5) build a service and sell subscriptions.

An audience question at the end was interesting, addressed to both speakers: “What’s your revenue per employee?” To which Mickos had this to say: “Neither of us is operating at scale yet. We’re both very popular, but we’re still not at potential as a business model.” Roberts of SugarCRM added: “We’re building our brand.”