Life cycle of a web 2.0 startup

These days it seems like everyone is working on a social network, web 2.0 start up that is going to be funded by advertising.

It's getting to the point that whenever someone tells me they are launching a site, I ask them the following questions:

• Is it a Web 2.0 site?
• Is it a social network?
• Is it a mashup?
  
• God forbid, is it written in Ruby on Rails?
• Are you going to use advertising to monetize it?
• Are you going to use Google AdSense to monetize it?
  

Scarily, more often than not, the answer is yes to most of these questions. Recently I asked a friend about what is the business model of his employer? To which he replied:

“We don't have a business model but we have buttons with rounded corners”
Today I found an article by Stacey Higginbotham that highlights some of the same concerns. The title of the article is 5 stages of a consumer web startup.

1. In the beginning
2. The launch
3. Launch a social network widget
4. 12 months later
5. The end is near

Some of the interesting links she mentions in her post:

• Selling Ads for MySpace is a hard work
  “We remain incredibly optimistic about social media. But there are specific challenges 1) Tons of inventory. Lack of scarcity creates a liquidity challenge. Working on bringing big brands aboard. 2) People who are visiting social networks there for different reasons, different uses. Figuring out how to target. 3) What's the value of a "friend"? Trying to figure out new metrics to communicate with marketers.”
• Enough Already: People Please STOP LAUNCHING AD NETWORKS
• What are your pre-launch priorities?