Does this mean that the enterprise is back in style again?
Of course, this means that for entrepreneurs starting companies now, consumer may be the way to go. It'll take a couple years to ramp up, and by then, the field has been thinned because investors only want to invest in enterprise startups. So there's more chance of the surviving companies getting the consumer attention they need to survive.
Sucks for people (like me) who started consumer web startups in 2007, though.
Do you have anything you're working on now, Jonathan?
We're doing something consumer focused and are close to breaking even on content costs after about a month in beta with less than 500 users. We're planning to increase our ad spending significantly, and I couldn't care less if our customers spend less money overall as long as we are their best option for the product we sell them.
I could see this being a problem if you have to position yourself as a cheaper, better alternative to established competitors to survive, but the issue there is more about branding than business model; can you move from being a low-cost play into being a premium brand if you need to cut revenues to compete in a crowded market?
Just build your product into the best product it can be and you'll change the market. Let others worry about competing with you and focus on giving people tons of value for the money they give you. As long as the market exists, you'll do ok.
I suspect that there are still many entrepreneurs in a similar boat - as recently as a month ago, there were "Critique my startup" posts that presented startups that really weren't all that useful, and YC has funded a couple that in their present form are pretty weak.