The twist is Path lets you have a maximum of 50 friends, which means, theoretically, you are limited to having real friends within your network as opposed to friends of friends of friends, acquaintances and people you don’t know. At first blush, Path is definitely different. The question is whether 50 or fewer friends will have any kind of appeal in a world in which collecting friends seems paramount. As well, can Path establish a foothold in an already crowded market. (See my recent “New Kid on the Block” post about the challenges facing newcomers taking on giants.)

Another important question is whether Path is a novelty or whether the social network pendulum is starting to swing back after an enthusiastic couple of years that has seen Facebook explode. With Path and other social networks such as Diaspora, there appears to be a move towards smaller, more private networks that, frankly, operate more like real-world networks.

While Path is focused on small, Diaspora is focused on privacy. Both seem to be a direct backlash to Facebook, which is focused on large social graphs and making as much of your information public despite its ever-changing privacy control adjustments.

Personally, I have been waiting for the social pendulum to start swinging back, although to what extent is unclear.

Right now, it feels like a wild party in which anything goes. Everyone is building large social networks based more on numbers than people we know or value. We’re sharing astounding and alarming amounts of information about our personal and professional lives with little sense of the potential consequences, including the fact many people are surrendering any kind of privacy. And we’re engrossed within our digital worlds while other parts of our lives such as fitness and friends get less time and attention.

Don’t get me wrong, I’m as much a digital animal as the next guy or girl. But there doesn’t seem to be a healthy balance between digital and non-digital. The Internet has come so far, so fast in the past decade, we have hardly had time to breath. At some point, I think people are going to run out of breath, look around, and wonder “How the hell did I get here?”

One way to look at start-ups such as Path is to consider them telltale signs or clues of what may be over the horizon for people looking for a new and different experience with the Web. For that matter, you could throw in the growing number of start-ups looking to wrestle e-mail to the ground given the amount of time we spend in our inboxes. And then there is the whole content curation movement.

All of these developments point to the fact people are starting to think the Web is out of control, and controlling too much of our lives and time.

The problem is a combination of not having enough time to check out RockMelt and Blekko and, as important, the challenge in changing hard-coded behaviour. When doing a search, the default is Google; when using a Web browser, it’s Chrome or Firefox. These are tools that are an engrained part of my Web toolbox, which makes it difficult to add new or different tools – even tools that could be more interesting or different.

This is likely something most Web users face. Once you start using particular services or software, it can be difficult to switch to something new. We are creatures of habit, and that extends to our use of the Web.

This makes it an significant challenge for new players to establish a foothold, even a modest one. Not only does a new service have to be significantly better and/or different, its benefits and features need to be clearly articulated, and it has to get the story distributed and told to as many people as possible to gain any kind of traction. Even then, people who learn about a new service may decide to ignore it or check it out later.

The question is what can a new service do to break into a market with a dominant player? Here are some thoughts:

1. It needs to be superior, different or provide a better user experience. I would argue a service that is easier and more intuitive to use has more of a chance to succeed than a new service that tries to compete by having more bells and whistles.

2. It needs to fill a need that has been solved properly or in an elegant way. Perhaps the best example is DropBox. While there have been lots of online storage options, DropBox has captured many users by offering a service that provides needed the functionality in a user-friendly way. The free offer of 2GB of storage provides an attractive option for many people, along with DropBox’s innovative and easy-to-use file-sharing technology.

3. The messaging has to be crystal clear. A new service must quickly articulate what it does and the benefits it offers, otherwise time-strapped consumers will move on. The message needs to be dead simple so people immediately say “Yes, I get it”. A good example is Freshbooks, whose Web site proclaims it is “The painless way to track time and invoice clients”. I’m also a big fan of a well-produced 60-to-90-second corporate video that tell people what a service does and why someone should care. These videos can be expensive to make but they are well worth the investment because they can be used for a variety of purposes.

4. The service needs to reach a wide audience based on the idea only a small percentage will pick up on it. This means a company has to craft stories that will resonate with the needs of particular target audiences. As well, opinion leaders have to be brought into the mix to take advantage of their influence and large audiences.

5. There has to be as little “grit” as possible. If the home page makes it difficult to understand what a company does, it will turn off a potential user. The same goes for a registration process that is too complex or time-consuming, an “About Us” page that isn’t short, sweet and clear about the benefits for the user, or a bad FAQ. Anything that could cause a potential user to walk away has to be eliminated.

The bottom line is it can be an enormous challenge being the new kid on the block. It’s not enough to be better or different. That said, it is not an impossible task to establish a foothold by taking the right approach. With some luck and enough people spreading the word, new services have a shot of making it even in the shadow of a large and dominant player.

But, by far, the most popular request from clients has been the creation of new or refreshed Web sites, which not only includes design and development but new content, including videos.

My take is many companies ignored their Web sites during the economic boom because why changes something when you don’t have to do it. But now that the economic landscape is still volatile and the Web has become more important as a communications, marketing and sales vehicle, many companies have decided now is the time to refresh and update their Web sites.

At the same time, many customers want more control over the look and feel of their Web sites. They don’t want to depend on a Web developer to make small changes and, as important, get charged for them. This is why we have been building most of Web sites using WordPress because it gives customers control over content – something they have been enthusiastic about.

Given this approach, it was interesting to see the Yellow Pages announce plans to build Web sites for smaller clients as the company attempt to drive more digital revenue.

From the outside looking in, Yellow Page will build cookie-cutter Web sites for small businesses that have more to do with being Google-friendly than have great design. This approach is good if you want a functional Web site but probably doesn’t do much if you’re looking for a Web site that really engages visitors. Then again, many businesses don’t have Web sites so the Yellow Pages is probably a good way to get started.

“Artistic value doesn’t rank very high – doesn’t rank anywhere on the Google algorithm,” said Yellow Pages CEO Marc Tellier in describing the company’s approach.

For many companies, this cookie-cutter approach is fine but from what we’ve been seeing, there are lots of companies looking for a high-quality Web site that does more than appeal to Google’s algorithm. As well, a compelling Web site is more than having some widgets and a few pages, it also needs good content.

It’s called NudgeMail, and it’s a simple, yet smart, tool to remind yourself about important e-mails as opposed to trying to put them in special folders or trying to remember them.

NudgeMail lets you send yourself reminders about things that have to be done, meetings, conference calls, etc. All you need to do is send an e-mail to an nudgemail.com address to set things up. Even better, NudgeMail is free and you don’t have to register.

So, here’s how it works. Let’s say you have a phone call tomorrow. To create a reminder, you would send or forward an e-mail to tomorrow@nudgemail.com. Or you could send an email to nov4@nudgemail.com. These are just a few examples of NudgeMail’s different commands.

While NudgeMail may not be for everyone, it’s a pretty interesting service for those of us with too many emails and too much to remember. NudgeMail works with pretty much anything – GMail, iPhone, Blackberry, Outlook, Android, etc.

The online porn industry, however, has a huge presence on online, millions of customers, and a reputation for promoting new technologies – e.g. e-commerce, DVDs, video streaming, etc.

Given porn is the elephant in the room, maybe it’s time to legalize it or maybe regulate it so cash-strapped governments can get a piece of the action. Maybe the time is right to bring online porn into the fold rather than pretending it doesn’t exist.

While I’ve never been an advocate or online porn consumer (really!), my quasi-thesis that I don’t really believe is based on some interesting developments in Ontario, the province in which I live.

First, the cash-strapped Ontario government, which has just over a year left on its mandate, plans to get into the online gambling business. It argues that lots of people are doing it, and that $400-million of revenue a year is leaving the province for off-shore or legal gambling sites. The government is already a major player in the lottery and sports gambling business so online gambling isn’t that much of a stretch.

Second, the government recently agreed to legalize mixed-martial arts starting in 2011. If you’re not a fan of MMA, it’s a sport that basically involves letting two people getting into a ring, and then trying to beat the crap out of each other using their fists, feet and other body parts. MMA is a brutal and violent “sport” that has captured the imagination of a growing number of people, which explains why the Ontario government caved in to lobbying efforts as it prepares for the next election.

So, this brings us to online porn. If you think about it, online porn is bad and evil while online gambling and MMA are allowed in the “house” because they are better behaved. What? All of them are bad to some degree but in Ontario two are legit while the idea of regulating or sanctioning online porn won’t be touched with a 10-foot stick.

Don’t get me wrong, I’m not a supporter or advocate of the porn industry. But it seems hypocritical to make gambling and MMA acceptable even though they encourage bad or harmful behaviour. And the argument they are regulated and sanctioned because lots of people are gambling or watching MMA doesn’t hold much watch because lots of people are consuming porn.

Of course, Ontario is a place in which alcohol can only be bought at a government-operated store because we’re not responsible enough to buy it at a grocery or convenience store – even if it’s just wine and beer. Now, if you want to gamble online or watch some MMA, you will be able to do that soon with the government’s blessing.

Go figure.

So, what else does an online startup need to make it?

1. Perhaps the biggest “ingredient” is having a service that meets a need in a new or different way. Too many startups are vanity projects that cater to someone’s personal interests or needs as opposed to the larger market. They fail because they serve a niche that is far too small to create a viable company.

2. The service must be easy to “get” what the startup is offering and why a potential user should care. In the multi-tasking, time-strapped world in which we live, startups have small windows of opportunity to capture someone’s attention.

If consumers fail to quickly understand the service is being offered, they’ll quickly move on. This means a startup needs messaging that is clear, well-articulated and user-friendly. I’m personally a big believer in the power of the demo video because many people will watch a video before reading even the most well-written text.

2. The service or product has to do the job well. This is something that should be a given but you’d be surprised by how many startups create mediocre or, worse, bad services. This includes startups that launch an alpha or beta that instantly disappoints. Even if the messaging is clear, a bad service will quickly kill any interest from consumers.

4. The service has to be intuitive and user-friendly. Any hurdles, or “grit”, will quickly kill any kind of traction. This starts from the registration process to how quickly someone can start using the service or product. People have little patience, and want a gentle learning curve so having a service that is intuitive and user-friendly.

5. Fanatical customer service is also a key ingredient, particularly in the early days when a service is still being developed. The ability to quickly and effectively deal with problems or issues and actively solicit suggestions and feedback can make a huge difference.

6. Identify and nurture your champions and evangelists. As much as great messaging, terrific customer service and being active within the social media community are must-dos, the real marketing magic happens when a user is so excited with a service that they enthusiastically and actively start telling anyone and everyone. By identifying and supporting these people, a startup can jump-start its marketing and sales efforts.

There are, of course, a lot of other variables that go into creating successful startups such as having terrific employees and, if required, financing, but the ones above are “low-hanging fruit”.

What do you think are the most important “ingredients” for a successful startup?

The more people use the Web, the more services they consume, including growing amounts of video, the more they want a better, faster online connection, even if it means paying more for it. The high-speed service providers have been more than happy to meet this demand by offering new tiers of premium services. Rogers, for example, has five broadband services, capped off – for now – by an Ultimate package that delivers 50Mbps for $99.99/month.

In other words, high-speed access is a good, high-margin market even taking into account that cablecos and carriers have had to make major investments in their infrastructure to offer better, faster service.

At the other end of the spectrum are the players that supply the content that makes high-speed access so valuable and necessary. This group include newspapers, magazines, video sites, software-as-a-service for businesses and consumers and games. Without high-speed access, it would be difficult to deliver a good experience.

As a group, the content players are struggling. Newspapers, for example, are trying to figure out how to generate enough advertising revenue to support shrinking infrastructures. Google is still working away on making the ever-increasing YouTube profitable, while online start-ups are hoping that subscriptions may emerge as an alternative to advertising as a revenue source.

In other words, one group – the high-speed players – is thriving, while the other is scrambling to make money. At some point, something has to give become the current situation doesn’t appear to be viable in the long-run. You can’t have a healthy ecosystem when one group is fat and happy, and the other is sick.

At a Canadian Telecom Summit panel that I moderated yesterday, this was an interesting topic of discussion that could have been even more interesting if someone from a content company has been there.

While the broadband players are working with content suppliers to expand their distribution and, in the process, hopefully make more revenue, the theme that struck me is how high-speed companies such as Rogers are starting to drive even more revenue by expanding their service footprint.

Rogers, for example, recently launched video-on-demand online, and offers access to content through it wireless network. The strategic thrust for Rogers is “convenience” so consumers can access content any time, anywhere on any device. Of course, you have to pay for convenience but, again, consumers seem to be willing to pay for access to get content.

Content may be king but on the Web, connectivity is where you’ll find the money.

I have come to the conclusion that this approach is untenable because there’s too much risk and uncertainty inherent in the belief that a business model will eventually emerge. As a result, I think start-ups should have a revenue-generating business model from the start, even if it’s a freemium model with a free, basic service.

Given this philosophical approach, it was interesting to hear Sean Ellis’ presentation at meshU yesterday. In a nutshell, Ellis believes many startups should launch their services without charging for them. Instead, he suggests start-ups focus on creating services that resonate with a small group of engaged users, who will provide them with insight, guidance and feedback on how to evolve a service so can have broad appeal.

This is a process Ellis describes as the “gratification engine” – something that start-ups need to spend more time focused on as opposed to trying to attract more users by adding features.

When the start-up has a better idea of the service and how it meets the needs of consumers, Ellis said it can introduce a paid service, while providing the original users with a discount as a reward for their contribution.

When I pushed back about coming out of the gate without charging for services, Ellis said making money from early or beta users is somewhat irrelevant given the more significant revenue could come, in theory, from the large amount of users who come on board afterwards.

To be honest, I’m still not completely convinced that only having a free service is the right way to go. If people want to pay for premium services, there should probably be a way to take their money.

So, why should you come to mesh’10, which happens May 18 and 19 in downtown Toronto?  Here are five reasons:

1. It is the most vibrant, fun and diversified networking opportunity within Canada’s Web community. There’s really no other place that features entrepreneurs, investors, academics, government officials, marketers, public relations folks, advertisers, developers, designers, people from non-profits and those just interested in how the Web is changing how we work, live and play.

If you haven’t been to mesh before, you’ll discover the breaks between the keynotes and panels are pretty long, and people like it that way because it provides a real opportunity to meet new people and catch up with friends and colleagues.

2. The mesh keynotes. Truth be told, getting the right keynotes is one of the most challenging things about putting on mesh. Every year, we spend hours thinking about the right people who can provide insight about what’s over the online horizon.

So, we’re really excited about our keynote line-up of Chris Thorpe (The Guardian), Joseph Menn (hacker expert and author), Scott Thompson (Paypal) and Arvind Rajan (LinkedIn).

3. The swag. Once again, Right Sleeve is the official mesh partner for all things swag so you can expect Mark Graham and his swag gang to come up with something cool and creative.

4. The workshops and panels. If you could get a sneak-peek of the behind the scenes action, you would discover that we spend countless hours discussing and exploring the programming for mesh. For us, programming is paramount and a pillar.

5. The people who come to mesh. We just organize mesh, it’s the people who attend mesh who really make it happen. They come with enthusiasm, energy, curiosity and optimism. They jump-start the programming by getting engaged with the speakers (and asking lots of questions!), they network like crazy and make everyone feel welcome, and then they socialize in a major way.

So, are you coming to mesh? If you haven’t bought a ticket yet, I suggest you get one soon ’cause they’re going fast. They’re available here.

What struck me about the news was not so much what bit.ly did but the fact bit.ly is just one of dozens of URL shorteners battling for users. It wasn’t that long ago that tinyurl.com was pretty much the only game in town. Now, I don’t see tinyurl as much. Instead, there’s a non-stop number of URL shorteners with all kinds of strange names.

The question is whether and when the URL shortening bubble will bust. While bit.ly offers a premium service, many URL shorteners are free – and we all know how successful the free model has been beyond a handful of anomalies.

Here’s a chart comparing traffic for bit.ly and tinyurl.com:

For more on bit.ly changes, check out ReadWriteWeb.