Yesterday Mike was going through all the posts we’ve written on TechCrunch since it first began, and getting them into an OPML file that Dave is now using on Scripting News. One thing we were talking about during the time was the surprising amount of companies that we haven’t heard anything from since they were first profiled for the site. The conclusions to take from this are simple:

• Most development happening now is as a proof of concept. A showcase of what the new “web 2.0″ methodology allows. Services, mash-ups, social networks. Most of the new projects out there don’t have a business model, or a plan to move forward (keep in mind that I love projects built for the pleasure of development). They exist because they can exist.
• Investment seems to stifle innovation. Some of these companies I’m talking about are funded. Some had A rounds of several million bucks. Some had some real cash flow going on. But once the money lands on the bank accounts, bang: innovation stops. This is an unfortunate, general case.

One of my favourite projects out there was Flickr. I remember when I first saw it and began testing it out. I bought a pro account. I love it. But since they’ve been acquired by Yahoo, there’s nothing new. When they were independent, they were listening to their users, adding cool stuff, making my time on Flickr worthwhile.

Now I’m using them as an example because I love them. There are so many others like that out there that I wonder about the future of this “era”. Does innovation come in waves of money out / development in, money in / development out? It seems like it, and that’s a shame.

I can only hope to myself continue innovating. And that others do the same. Even if their bank account looks (much) better than mine.

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