If you're trying to determine if you site's business model is doomed to failure or destined for success, a great way to check is to ask yourself the following questions:
Are we actually useful or just fun to play with?
Are we actually innovating or just mashing/copying?
Are there barriers to enter our market, or can anyone be us?
Of course, I stole these from Mike Rundle's Guarding the Gates entry on Web 2.0 firms, but the principle holds true throughout the web world, whether it's 1.0, 2.0 or V.7 (guess which one SEOmoz is?).
So, how do you tell if you meet these criteria? I'll try to provide some of my own opinions on some current market leaders in their fields.
The Wall Street Journal online
- Useful? (if you have a subscription, yes, otherwise, not really)
- Innovating? (not that I can see, they're as old-school as it gets)
- Barriers to Entry? (their reporters and name carries weight in the business and financial world, but I'm guessing that by the time my generation is running the majority of large businesses, the Motely Fool will carry equivalent cache, as will some bloggers)
Skype
- Useful? (only if you like free phone service worldwide and knowing when your friends, family and colleagues are online)
- Innovating? (with everything from WeeMees to integration with eBay, they're definitely on the move)
- Barriers to Entry? (since usefulness is based on subscriber base and Skype has 75+ million. You'd also need an expensive network, some very good software and a killer distribution system, so I'd say yes - high barriers to entry)
How does your site stack up? What can you do to make it fit the mold?
"Fun to Play With" could have long-term prospects if done properly. It seems like it has short-term potential to make money and brand awareness. I guess a long-term strategy for that classification would be for constant enhancements to keep it fresh and fun.