Consumer web. People don't visit websites based on who developed them. They visit them because they want to.
It's often difficult or impossible to figure out what consumers want, other than putting lots of ideas in front of them. Usually if you ask them, their responses will be wildly different from what they actually do. (I maintained that Reddit was a failure long after I started using it on a regular basis, and did the same with LiveJournal.)
It's not a business model that works in every field - in particular, you absolutely don't want to try enterprise applications this way (really, nobody will buy from you if you try it, as you remark). But it does work.
That's exactly how it works with consumer Internet projects. Consider that even Google didn't realized how valuable what they had was. They tried to sell their search technology in the early days, but only because nobody would buy it, they had to continue running the company on their own.
The forumla seems to be:
1. Build a basic version of something you think people want.
2. Try it.
3. If people don't like it, modify and try again. Do that for a few times, and if it still doesn't work. Go back to step 1.
It's often difficult or impossible to figure out what consumers want, other than putting lots of ideas in front of them. Usually if you ask them, their responses will be wildly different from what they actually do. (I maintained that Reddit was a failure long after I started using it on a regular basis, and did the same with LiveJournal.)
It's not a business model that works in every field - in particular, you absolutely don't want to try enterprise applications this way (really, nobody will buy from you if you try it, as you remark). But it does work.