by Tom Foremski and Richard Koman for SiliconValleyWatcher

Joe Kraus, the founder of JotSpot, one of the hottest Silicon Valley startups, stopped in yesterday for a chat at our deluxe meeting rooms (featuring all day breakfast) at the Lucky Penny Diner on Geary St. in San Francisco. He had a glint in his eye, and a grin on his face that some might describe as looking like the "cat that ate the canary."

And why not? JotSpot's enterprise wiki technology has quickly earned a very respectful buzz since its beta launch in late October. It is simple, sophisticated, and easily adaptable for a multitude of corporate IT tasks, with the potential to make a good-sized dent in the enterprise software market. Understandably, Joe would rather not draw that kind of attention from larger players just yet...

"We’ll never be able to produce an application that has the depth of a Salesforce.com," he says. "They will always be better at it than we are." (There you go Marc, no need to worry....)

But it's plain to see that JotSpot has leveraged wikis into a software development platform that fills a large unmet need: create specialized enterprise applications for which there are no vendors (because the market size is too small) -- without involving IT departments. It's also plain that a lot of enterprises are paying huge amounts of money for bloated applications, and that JotSpot apps could deliver required feature sets for many types of businesses.

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When I first met Joe more than 10 years ago, he was one of the co-founders of Excite (the internet search firm), one of the hottest Silicon Valley startups of the time. Excite went on to become a big name in search but it eventually succumbed to competitors and consolidation.

I asked what inspired his latest startup. "About 18 months ago, Graham Spencer [also ex-Excite] and I started using a wiki to brainstorm some business ideas--and after one day I was hooked. I realized that this was a way to develop light, custom applications very quickly and that anyone could do it."

JotSpot allows groups to easily collect information and work together by combining a wiki interface, e-mails, Word and Excel files, and other mixed media, all in one server-side place. It includes unlimited version control, rollback, indexing for full-text search, comments, and permissions.

The app is especially suited for the SME market, where the large enterprise software players cannot play because their installations are expensive, rigid, and cannot be customized by smaller companies. "There's a need for specialized apps that no software company can fill," Joe said. "Today, you have to be rich to customize software." JotSpot means to change that.

Joe pointed out that many small organization actually roll their own applications by creating lists in MS Excel and emailing them around. This tends to happen where the market is too small for a vendor to develop a shrink-wrapped product and the customers are too small to afford customized solutions.

At Demo, JotSpot will show some tools that can further simplify the creation of apps. In our conversation he also signalled a change in JotSpot's business model from its current hosted per-user, per-app fees.

Joe outlined three founding principles for JotSpot:

* Software should be "tinkerable."

* Software should be self-service.

* Software should be cheap. "I'm a low-price, high-volume guy. I love that model."

Joe said his team was inspired by Flickr's open data, closed source model. "We love what they did with APIs. It's closed source but it feels open. I think that open data will be more important than open source," Joe said. Like Flickr, JotSpot allows third parties to write supporting apps via an open API and allow users to easily get their data out.

These seem to be the characteristic of the new types of applications/technologies emerging in Web 2.0: to become open platforms, able to mix and match with other applications/technologies/media. This means nothing is pre-ordained as in current enterprise and off-the-shelf software packages, users continually discover unexpected ways of using the technologies.

"This time, it is all about the writeable web rather than the readable web," Joe said.

I’ve often said that in the same way that the web browser was important in enabling the first phase of the internet, the browser window is very important in this Web 2.0 phase--except that this time we get to play on the other side of the glass.

"We see it exactly the same way," said Joe. "We even wanted to use Escher’s drawing of a hand drawing a hand but we couldn’t make it into a decent looking logo."

We discussed Google, the company that pushed Excite out of the search business. "We could not scale our search operations as fast as Google because we were using a proprietary architecture."

"Google reminds me a lot of Microsoft in 1987, everybody is trying to second guess where Google is heading and trying to keep out of the way."