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Archive for December, 2008


Web 2.0 Was About Building Experiments, Not Businesses

It looks like we are coming to the end of another bubble, if it’s not already over. In March of 2006 I added the definition of Web 2.0 to Urban dictionary.

“Web 2.0 – Interactive media theory where an infrastructure focusing on content creation, management, and dissemination is built for the user to generate that content in a community framework.”

I think we have taken that theory and successfully put it into practice.   In a few rare cases we even accomplished this with normal people, a feat that was all but impossible during the first bubble.  It’s a major step forward. The Angel Investors and Venture Capitalists that funded this research over the last few years deserve to be recognized.  They took a big gamble, and their efforts have helped to move an industry forward that will define our era.

The Early-Stage industry may need to tell their limited partners that they were making investments in businesses, but anyone in the Social-Media industry knows the truth.  We didn’t create businesses, we created experiments.

In October VCs sent letters to their portfolio companies telling them that now is the time to cut costs because raising money will be difficult.  The subtext to this is that now is the time to start generating revenue because the safety net is gone.  Shouldn’t they have invested in companies that were doing this from the start?  Maybe not.  Maybe the early stage industry is wise to invest in innovation,  but lets call a spade a spade.  The truth is that now is the time to generate a little revenue to subsidize the funding of innovation until the economy picks up.

It’s possible that the early-stage industry has had enough of funding innovation.  Maybe now really is the time to stop messing around with experiments and to create real businesses online.  We have spent 3 years thinking about innovative way

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s to engage people, and then figuring out how to monetize that later.  We can thank Google for the strategy.  It may be the best way to radically innovate.  It may even be a great strategy to make money when everyone else believes that a site with engaged users is valuable.  Whatever the motive, funding innovation is a noble pursuit and we really do owe them a debt of gratitude.  However, now may be the time to flip that strategy around; determine what people will pay for, and then figure out how to get people engaged.

Thinking this way will probably not result in radically innovative social media applications.  We will have businesses that aren’t as sexy, not as fun, and probably won’t classify as social applications.  They will be boring, revenue generating businesses.  It’s not play anymore, it’s the real thing, but the real thing makes money.

If we get serious, and start building businesses for revenue instead of for innovation and community, what happens to the Web 2.0 social applications?  Should we abandon them as a flight of fancy of an opulent time?

I think we just need a shift in perspective about what they are. A great social application is more like a movie than a business; it’s a piece of interactive entertainment.  A movie can be monetized, which makes it valuable to create, but nobody thinks of a single movie as a businesses.  The movie industry is run by people who make many movies and then monetize those assets.  In that sense the internet is already very much like the movie industry, only our studios are Google and VC Funds.

We should keep creating social applications because they expand our ability to express and open up new possibilities for information transfer.  Social applications that can generate money to justify the investment of the patrons of innovation are even better.  But let’s all stop pretending.  We are creatives innovating around a radically new medium.   It’s not some mystery why we haven’t turned these into businesses.  The truth is that they were never businesses to begin with.

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Delicious.com is for normal people

Everyone who uses the Internet uses bookmarks.  Anyone who uses the bookmaking features of a web browser has a massive list of unorganized sites.  Show any normal person Delicious.com and watch their eyes widen.  You don’t need to explain what it is, just start using it and they will ask you.  Explain it and they will want it.  They won’t believe that such a great service exists and nobody told them.

Delicious is for everyone.  Bookmarking is something that everyone already does, it’s easy to use, and it’s immediately useful.

The reason that Delicious didn’t make it to normal people is because Yahoo never packaged it in a way that a normal person could understand.  Go to Delicious.com and try to determine what’s going; it’s impossible.  You would never think that Delicious is a bookmarking service for YOU.  It looks like a site to find new interesting sites, an activity that is popular among geeks.

The entire product category is called Social Bookmaking.  There is nothing less social than bookmarking a site for YOUR future reference.  The concept doesn’t make sense to a normal person.  Delicious bookmarks are public by default, which at first would be weird for a normal person.  The trick is to lead with the value proposition of a personal, organized bookmaking system, available anywhere.  Describing it as a social bookmarking tool leads with the one piece of Delicious that they are least likely to be comfortable with.

I have said before that the formula for creating an application for normal people is to let a technology marinate for 2 years and then dumb it down 100%.  The bookmarking features of Delicious are pretty simple.  In fact, they are even simpler than Google’s Bookmaking service.  Now they need to dumb down how they present themselves and how to get started.  Stop confusing people

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with a site discovery application, stop pushing the social features, and focus on creating a site with a clear value proposition: A personal, organized, online bookmaking tool so bookmarks aren’t trapped in the browser.

Could someone else swoop in with a simpler product to capture the market?  Maybe, but I doubt it.  You still need the installed base of geeks who have vetted the service to tell their friends about it. Despite the fact that they have dropped the ball for years now, because of their userbase, Delicious is still in the best position to bring online bookmaking to the masses.

Delicious is Yahoo’s biggest failure.  I don’t know how a company full of smart people could have overlooked their most valuable acquisition.  Then again, that’s the story of Yahoo.  Acquiring companies and then failing to leverage them.

The semantic web is the holy grail in the search engine wars.  How do you beat Google? Have thousands of people describe web pages instead of scanning keywords, put those sites into categories, and point to which is the most popular.   Yahoo has this with Delicious and it should be their top priority to integrate that rich data set into search engine results.  Their second priority should be to broaden the demographic of the userbase so more pages in different subject areas are tagged.  I find myself using Delicious as a search engine quite often.  The interface is too confusing for your average person, but the results are excellent.

I’m not saying that integration would be easy, and they did make an attempt at the beginning of the year.   I’m sure there are many reasons why this is much more difficult than it seems, and a challenge that the Delicious product team has likely rammed their head into the wall to figure out.  Despite this, it is the single most valuable asset that Yahoo holds that Google does not.  If I were them, I would be focusing on that instead of a merger with AOL.

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