ReadWriteWeb

Entrepreneur and professor Steve Blank authored a blog this morning that expressed his opinion that business plan competitions are useless to startup culture and should be scrapped for business model competitions. Business plan competitions are just what they sound like: students are encouraged to submit a business plan and a winner is selected by a panel of judges, often resulting in some monetary reward for the triumphant student. Blank argues that models, not plans, are much more applicable to the iterative startup atmosphere, but not everyone agrees that business plans are entirely irrelevant.

Well would ya look at that? It's April already! The first quarter of 2010 is in the books and we are (hopefully) through all the April fools antics. In this week's ReadWriteStart Weekly Wrapup, we talk about how MBAs and entrepreneurship may not mix as well as they hope, how some of the best companies using freemium models have made them work, and how to brainstorm your next big idea by letting your creative beast come out and play. We also learned about a new freelance marketplace started by TechStars' Andrew Hyde, as well as a BizSpark-like program being created by IBM.

The Freemium Summit, an event focused on discussing the ever popular business model and how new companies can best take advantage of it, was held last Friday in San Francisco, and since then, interesting stats and bits of information have been popping up on blogs and news sites. New business models have been a hot topic of discussion lately as we've debated both the benefits of freemium and it's possible replacement model, subscriptions. For any company taking its first steps into the freemium model, it takes careful consideration when deciding how to structure a freemium model, from how much to charge, to which services to charge for.

There is a significant risk and reward that comes with developing products that leverage third-party application programming interfaces, or APIs. Twitter has used its API to let others spread the word for them; applications like Tweetie and TweetDeck help Twitter reach a broader audience on a variety of devices while making money for themselves. However, downtime for a service offering their API to developers means downtime for every service that relies on it for its API data. In the case of Facebook application developers, continuing reliability issues with the platform have become a cause for concern.

Back in early February, while aboard a red-eye to New York, Dave McClure wrote a long, humorous, rambling, profanity-laden rant of a blog post that focused on startup business models. While it makes for an entertaining read, McClure's post is also very insightful and makes a solid case for why startups should shift from advertising models and instead build their new businesses on subscriptions and micropayments. Earlier this month I had the chance to visit the headquarters of ZooLoo, a startup that witnessed this very shift first-hand with their own business model.

Lately at ReadWriteStart we have talked with a few people working with startups in the co-creation and mass customization industry. Some of these startups use on-demand production techniques to minimize overhead costs and create early cash flow for their businesses. Of course, this business technique is nothing new; larger companies have put this to practice for years, like Dell which custom fits computers to customer specifications.

Last week we talked about managing split teams with Danny Wong of Blank Label, a site for creating custom men's dress shirts and a startup in the growing field of co-creation. These types of startups, which have gained more traction overseas than in the U.S., run on a model of on-demand production, which allows them to become cash-flow positive in a relatively short period of time. Wednesday I had the chance to talk about co-creation with Carmen Magar, a German woman living in New York who works for chocri, a German startup that sells customizable chocolates.

Consulting firm McKinsey has just released a report on the Internet of Things, one of ReadWriteWeb's top 5 trends of last year. The report, available for free if you sign up as a member of McKinsey Quarterly, focuses on the "new sensor-driven business models" that Internet of Things brings.

McKinsey sees two categories for emerging applications: "information and analysis" and "automation and control." Many of the applications listed are for large companies or specialized industries (for example automobile manufacturers). But consumers should take note too, because there will be a lot more data about us flowing onto the Internet.

A new study commissioned by the European Union has finally proven what many have suspected all along: internet users don't want to pay for content. Period. And nothing is going to change their minds. The report finds, in a surprising contradiction to what industry executives have been spouting for ages, consumers' behavior has nothing to do with the peer-to-peer technology (P2P) that has given rise to all-you-can-eat systems for free downloads of copyrighted content. In fact, many people claim that they wouldn't pay for online content even if all other free options were taken away. This finding has dramatic implications for the future of business, and not just in the entertainment industry, either. If people won't pay for content, how will companies survive?

This is the second in a 3-part series, by Bernard Lunn, on the new Web. Part 1 was The Whatchamacallit, Post Recession Phase Transition.

Recessions change consumer behavior, drive weak businesses and models to the wall and enable new businesses and models to thrive. This recession is likely to have a greater impact on Web ventures than past recessions for two reasons: