Could the loss of a startup signal the dawn of the next generation?

I lost a friend the other day. Actually, I lost a few dozen. Pownce, a social networking and blogging site that only came out of Beta in January of this year was bought out by Six Apart and is closing its virtual doors for good on December 15. And all that was sent to break the news to me was the following message:

We are sad to announce that Pownce is shutting down on December 15, 2008. As of today, Pownce will no longer be accepting new users or new pro accounts.

And that was that. I have to admit that I was not at all an avid Pownce user but to borrow a line from Alexander Keith – those who liked it, liked it a lot. So as it shocked me to get this note, I’m sure it impacted many others a great deal more. I suppose they weren’t totally heartless, though. Continuing on in this obituary email, they did provide online grief counseling, sort of:

To help with your transition, we have built an export tool so you can save your content. You can find the export tool at Settings > Export. Please export your content by December 15, 2008, as the site will not be accessible after this date.

This was likely my favourite part. Recognizing the circle of online life, Pownce was making it easier for users to take their accumulated Pownce Pals with them. Now, of course, they fully advocate importing your Pownce info to Vox, Six Apart’s blogging/networking platform, but the point is, they’re allowing the digital community to migrate and, hopefully, pick up where it left off.

This in itself is quite interesting, but in these unprecedented economic times, we could be seeing the second go-around of a phenomenon not seen since the tech bust of nearly a decade ago. Sure startup companies are acquired, merged, and closed for business all the time, but in rough financial times – just as in society – the inequities between the ‘rich’ and the ‘poor’ are only magnified.

Layoffs abound as belt-tightening affects even the very un-corporate offices of Silicon Valley. VCs are actively looking to cut the chord on unprofitable startups. People are taking their money out of stocks and putting them into socks to stuff under their mattresses. The last time the tech sector underwent a real crisis like this, it was in its infancy and the heavyweights of today – Amazon, Google, eBay and others – emerged as seemingly the sole survivors, and became the poster boys for the next decade. Now we see web 2.0 properties in the same stage as the internet as a whole was in during the last bust – competing for audiences to define themselves as the market leader, and searching to find the most effective business model to monetize their service.

So what am I getting at here? Glad you asked.

This recession could mark the next evolution in online. As times get tougher (and they will – don’t kid yourself), we are likely to again witness the digital equivalent of natural selection. Those online services with the largest audiences, the most confident financiers and (probably most importantly) the strongest business models are likely to begin to prey on those services that don’t have the financial, or social wherewithal to survive. This is the time for social media, in particular, but web 2.0 in general to finally ‘figure itself out’, because if it doesn’t sites like Twitter could become the next Pets.com.

While it’s tragic to be so pessimistic about the fate of some of these exciting applications, I prefer to focus on the even more exciting concept of the next evolution in online. Economists will tell you that innovation and efficiency are what’s needed to grow, and this is never more true than when times are tough. So it’s time for our innovators to be truly innovative or risk seeing themselves become the prey as the internet evolves and the superior online species take this opportunity to grab control and pownce on the competition. Err…. pounce.

June 27, 2007 (Beta) to December 15, 2008. RIP.

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