Another great post by Clarence Wooten, this time pondering the investment potential of "bootstrapped startups that leverage open source, blogging and social networks to fuel a Web-based lifestyle business boom."  He looks at the role blogging plays for today’s startups, and how it is fundamentally different from launching a service in the Web 1.0 days.

Unlike during the Web 1.0 era where launching a new website required significant capital and channel relationships to acquire initial traffic, Web 2.0 startups are able to leverage word-of-mouth blog-fueled promotion to gain early traffic and customers to quickly validate their value propositions. Additionally, blogging creates a feedback loop that can be used to quickly improve the product. These developments have further influenced bootstrapping and a sort of “democratization” of the Internet. Through blog communication, startups are now able to bypass expensive advertising, yet still gain enough visibility to demonstrate value quickly by leveraging early customer adoption and feedback to incorporate rapid product improvements."

Word of mouth.  Validation.  Feedback. 3 ways weblogs work for startups.