Several well-known sites have recently been discussing the proliferation of Web 2.0 companies, and, in the words of social media gurus mashable.com, “most web [2.0] companies fail”.

Though it might at first glance resemble the world’s most anarchic game of noughts and crosses, this image (courtesy of another social media expert, Meg Pickard from meish.org) represents the vast majority of Web 2.0 companies in the last three or so years, with their success (i.e. are still going, or were acquired by wealthy third parties) or failure denoted as a cross or circle over the site’s logo.

You can click the image for a larger version.

The important thing to note is that while 57 (wait… 55, 56, yep, 57) of these Web 2.0 and social media startups failed (or, in the case of some, failed dramatically), the other side of the coin saw several other companies being acquired for hundreds of millions of dollars. Like anything else; you win some, you lose some – just like in any other sector. Most startups fail – so why should the internet be any exception? It does seem interesting to note, however, that compared with the failure rate of most small businesses – whether on or offline – the failure rate of the web startups in the image is visibly lower.

Either way, it’s been pretty tough keeping track of all the Web 2.0 sites that have come and gone, so it’s nice at least to have some kind of reference point for the next time someone in the office looks up from their monitor and asks “Hey, whatever happened to _______?”.

Further observations from Meg Pickard on this graphic:

I think it’s important to note that
a) the failure rate is lower than the standard failure rate for companies – this is impressive
b) many, many more companies, services and applications have started up since that point and become fabulously popular and successful (perhaps it’s time someone made a brand new collage of logos?)
c) the number of companies which have managed to flip is impressively high

but perhaps most importantly, considering the context

d) the original image wasn’t comprehensive, and therefore any update of it is only ever going to be an update of a subjective set, rather than particularly revealing of wider business or economic trends. The original designer left out many startups which are still going strong, whose presence would make the graphic today look very different.

In brief: thanks for featuring my update of a famous graphic, but please don’t take it too seriously.