Web 2.0 and the return of the startup incubator - May 1, 2007:
(Business 2.0 Magazine) -- Naval Ravikant is a classic Silicon Valley entrepreneur: He never stops moving. In the past decade, he's helped launch four companies, including consumer reviews site Epinions, and invested in many more as a VC, including blog aggregator Technorati.
And he isn't about to slow down now. His next project, he explains while jogging around a Peet's Coffee & Tea in San Francisco, will bring a group of engineers together, share resources, crank out a bunch of Web-based companies, and hope for at least one hit that makes a pile of money for the whole enterprise.
During the dotcom bubble, such startup factories were called incubators. At the peak, there were about 700 for-profit incubators, most focused on technology, according to the National Business Incubation Association.
Many were notoriously high-pressure environments where a lucrative exit strategy was more important than the half-baked products.
More than 80 percent of them collapsed when the bubble burst. At its height, "people were pitching companies to incubate the incubators," says Charles River Ventures VC George Zachary.
Not surprisingly, today's entrepreneurs shy away from the word "incubator." Ravikant says his venture, tentatively named Hit Forge, will be based on a Hollywood model.
"This is like a movie studio," he says. "It's about milestone-based development, piloting concepts, access to distribution" -- not to mention finding the next blockbuster.
"The Web is the most hit-driven business the world has ever seen," Ravikant says. "The problem is finding that next hit."