If you aren’t already familiar with what web 2.0 is, start here and here. Required reading.

The world is in a tizzy over web 2.0.

I know you feel as dirty as I do using the web 2.0 buzzword, but it’s the most convenient way to refer to the new way the web works, the new way people behave, the new way to do business.

Even people who aren’t web geeks get it by now, if my clients are any indication. The prescription is standardized: write a blog, tweet, connect on social networks, let visitors add user generated content, be transparent and honest and real.

It’s all about the people, man.

Look, I’m not a fervent detractor of web 2.0, nor am I an apologist. I think we can be more nuanced than that.

The strategists say “join the conversation”, myself included. We glaze over the far more important point: you can only be a part of the conversation if you have something worthwhile to say.

Web 2.0 isn’t easy

If I tried to tackle Brandon Jacobs (the 264-lbs running back for the glorious New York Giants), I would simply die. I’d burst into a cloud of Josh particles, and my mom would be sad.

That’s why I don’t play in the NFL, and neither do you. There is no way to fake being good at football.

It’s easier to fake business. In business, the power mostly lies with producers (as opposed to consumers), so producers can research the best claims to legally make for superiority, then market the hell out of it.

(The same is true in politics. Alaska is the biggest state, but by population size, landmass, average height, or most people with the name “big”?)

Web 2.0 is a social movement, a transfer of power away from producers due to the organization and mobilization of consumers. Consumers can buy whatever they want, from wherever in the world it is made, compared directly against all competitors, while hearing what everyone else thinks about it.

Karl Marx would be positively giddy, if German philosophers knew how to smile.

Like football, Web 2.0 can’t be faked. The big winners are consumers and the producers they care about.

But I don’t think the world is split into dueling camps of companies worth caring about and the fakers who want to be. At least, not yet.

Being worth caring about requires limiting your scope

If I avoided Brandon Jacobs and the NFL, instead focusing on pee wee football, I may very well be the best out there (and a bit of a weirdo).

It’s a lot easier to be the biggest fish if you pick a small pond. Web 2.0 is for leaders; whether the market is large or small doesn’t matter.

Most companies are the leaders of some market, just not the one they try to sell to. But if you’re making money in the wrong market, I’m not going to ask you to stop just because the world changed while you were on top.

Web 2.0 costs time and money

Where the whole “it’s FREE!” thing comes from baffles me.

It’s free, except for the part where it takes 10+ hours a day, technology chops, and preferably some graphic design and copywriter backup.

You either need to be the person who is a social butterfly, web geek, designer and writer all rolled up into one, or you need to hire the people who are.

If you cannot justify these costs with a plan that shows how you eventually make money, you should be avoiding web 2.0 like the plague.

But know this: if you can’t come up with a plan that converts word-of-mouth into profits, you’re on the wrong side of a big change in the way our world works.

If you’re not growing, you’re dying

Strategies are offensive or defensive, but never both. You’re either growing or dying.

There is nothing wrong with dying. Society advances when older things die and newer things take their place.

You have a right to milk dying profits for all they’re worth, but you have to know that the more defensive you get, the harder it will be to grow into something else.

Newspapers aren’t dead — everything you read about that is hyperbole. But they are hurting, and they’re not going to be the ivory towers of news ever again.

Web 2.0 is a growth strategy, and it accelerates your growth because it doesn’t need a big organization or distribution chain. On the contrary, those things slow it down.

Which brings us to the point:

You need to honestly evaluate whether you are in growth or decline, and adopt the right strategy. If you try to use a growth strategy on the way out, you will accelerate your demise by wasting time and money.

This sounds cynical — “die quietly, please”. But what I’m really saying is, don’t put all your eggs in one basket. Leverage your declining assets to launch The New Hotness.

If newspapers spent less time gasping for breath on a classifieds business model made obsolete by craigslist, they’d be able to focus on the things they actually do better than anybody else, like investigative journalism.

And if you’re starting something now, and you’re still small and nimble with no entrenched interests, you’d be crazy not to build your business around the new paradigm.