This week kiko decided to close shop and put their code and domain up for sale at eBay. The main reason, also mentioned by Paul Graham, is that they were going head on with Google Calendar. Paul advises not to get in Google’s way, but is Google really invincible?

Paul in his recent blog post correctly observes that it was not so much the kiko’s calender itself that lost against Gcal but the integration of Gcal with Gmail was the killer blow. I agree. Most Web 2.0 (or any other incarnation of business) services like wish lists, to-do lists, calendars, notepads etc. are not going to make it on their own. There has never been much of a marketplace for such standalone services, they belong to more complex solutions. Does it mean that independent entrepreneurs should not innovate in this space? Or the acquisition exit strategy is flawed because your target acquirer could just built these services on their own? I beg to differ.

Let’s look at what is happening here. Say you want to build a new calender and believe you can do it better than Google. But there is no way you can make money doing just the calender. Advertising is not enough and might be intrusive. Paid customers would not come if they can get similar (even less sophisticated) features with Google. One possible way would be to use online version of your app only as a testing mechanism and sell the product to the Enterprise or an Enterprise player, e.g. an eLearning solution provider could use your calender component. But there might be a yet another way, look around for other Web 2.0 (again, used for lack of better term) companies that could use your component. The infrastructure is there and one of the basic tenets of Web 2.0 is integrable services. So, why not partner with other similar small players. This is a win-win-win situation for you, your partners and your users.

As for calender, David posted his reaction to Paul’s post, where he states that 37 Signals also launched a calender recently and even charges for it. Of course, they wouldn’t be able to do so, if it wasn’t part of Backpack. It’s all about an integrated experience.

There are about 1000 Web 2.0 companies on Seth Godin’s Web 2.0 Traffic Watch List. Will all of them survive? I doubt it, but by collaborating with each other they increase their chances many fold.

So don’t give up on your dream and creativity. Kiko’s death doesn’t mean much in the larger context. It’s still remarkably cheap and easy to put together an Internet based business. My web hosting is cheaper than my bank account fees. The only significant investment you are making is your time and even that pays off. Just the lessons learned would be worth the effort. Kiko founders already have ton of job offers and investment for their next project.