Warning Signs for Entrepreneurs

Two weeks back I derisivelymentioned Microsoft’s Live.com gadget creation contest (wherethey’re trying to egg on development of gadgets for their web appby contest giveaways). Now Ebay is getting into the game – they’ve announced prizes for the bestapplications that hook into Ebay, extending the value of theirservices. So Ebay gets a more vibrant developer community, withmore tools and services for their highly lucrative clients, and thedevelopers get…a remote chance at winning some token prize.

As a professional software developer and enterpreneur, thisserves as a huge omen, yelling out “There is no moneyto be made in this market“. The normal carrot that drawsdevelopers into a niche is revenue, with which there is little needfor additional incentives (e.g. Why would I care about your tokengame machine when I’m planning on selling 50,000 copies of mysoftware at $49.95 each?). So when an organization becomesdesperate enough to start doing giveaways, you know that niche isundergoing pretty unhealthy times.