New study on companies worth $100M shows how much of a lie the Web 2.0 fad was

  • There were only 472 companies they could find worth more than $100 million. I know, that sounds like a lot. But it’s really not. There are thousands of companies started every year, and the companies in this group were funded as early as 1998.
  • What’s more: They took a huge amount of cash to get to this point. In aggregate $40 billion has gone into funding these 472 companies. The median amount was $75.8 million per company and the average was $84.7 million. Now a lot of these companies are worth well over $100 million. But on average that’s not exactly a stunning return on investment.
  • Let’s look at that 20 percent in the consumer space. Out of some 80 companies, 34 of them were in the ecommerce space. Again, companies with a model for making money. Out of every company valued at north of $100 million since 1998, roughly 50 are building a business off of advertising. That’s astoundingly low, and kicks the grab-eyeballs-and-figure-it-out-later ethos right in the teeth.

I don’t agree with the “Fad” term, but perhaps not transformational in opportunities for new businesses.

New study on companies worth $100M shows how much of a lie the Web 2.0 fad was

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Dr Dave Chaffey is co-founder and Content Director of digital marketing advice site Smart Insights. We’re a publisher and learning platform that helps our 150,000 active members in over 100 countries plan, manage and optimize their digital marketing activities by applying the actionable advice in our planning templates, guides and interactive e-learning tools.

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