How to join the Web Ecosystem

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Presented at Stanford's "Publishing on the Web" Nov. 2007: There are lots of new ways to create value for your brand. Participating in the Web ecosystem in the right ways can create deeper relationships with your users, build new kinds of communities and open up new revenue streams for you. Learn from some of the cutting edge online media services how to take advantage of the opportunities that come with opening up and becoming an active participant in the new market.

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How to join the Web Ecosystem

  1. 1. How to join the Web Ecosystem Matt McAlister Yahoo! Developer Network
  2. 2. TOC • What is the Web Ecosystem • Opening Out • Opening In • Network Effects • Advertising
  3. 3. Ecosystem
  4. 4. Software stacks are made of dependencies
  5. 5. inter- Ecosystems are made of inter-dependencies • Hosts • Parasites • Reproduction • Food chains • Producers • Consumers • Evolution
  6. 6. Platform concepts compared HBR, “Platform-Mediated Networks:Definitions and Core Concepts”, Jan 2007
  7. 7. It’s all about platforms, not destinations It’ “I have really stopped thinking of Hot-or- Not as a destination site and worry about how many people are using our service no matter where they are. The concept of a destination is so 1999. I think you are going to see a big shift. People will go where they will go. The world is evolving. Sites like HotorNot are starting to see themselves as services and less as destinations.” -- James Hong, CEO of Hot-or-Not Source: http://www.techcrunch.com/2007/10/16/should-hotornot-become-just-a-facebook-app/
  8. 8. O’Reilly’s Make/Craft Magazines in the wild Reilly’
  9. 9. Related example: Motorcycle manufacturing “In contrast to more traditional, top-down approaches, the assemblers succeed not by preparing detailed design drawings of components and subsystems for their suppliers but by defining only a product's key modules in rough design blueprints and specifying broad performance parameters, such as weight and size. The suppliers take collective responsibility for the detailed design of components and subsystems. Since they are free to improvise within broad limits, they have rapidly cut their costs and improved the quality of their products.” John Hagel and John Seely Brown, Connecting Globalization & Innovation
  10. 10. Opening Out
  11. 11. Blogging/RSS Opening Out: Blogging/RSS
  12. 12. machine- Give others machine-level access to your data mysite.com startup.com newapp.com Publisher APIs
  13. 13. API Example: Flickr
  14. 14. Opening Out: Pipes mashups
  15. 15. Opening In
  16. 16. The Importance of User Data “One of the key lessons of the Web 2.0 era is this: Users add value. But only a small percentage of users will go to the trouble of adding value to your application via explicit means. Therefore, Web 2.0 companies set inclusive defaults for aggregating user data and building value as a side-effect of ordinary use of the application… They build systems that get better the more people use them. ” Tim O’Reilly “What is Web 2.0?”, September 2005 http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html
  17. 17. Opening In: Community matters more than their comments
  18. 18. Opening In: Instructables
  19. 19. Opening In: Wesabe
  20. 20. Misguided Incentives • quot;An act of love drastically changes meaning when one person offers the other money at its end, and a dinner party guest who will take out a checkbook at the end of dinner instead of bringing flowers or a bottle of wine at the beginning will likely never be invited again.“ – Yochai Benkler, Coases’ Penguin • quot;I've never seen UGC sites as the least bit driven by money. They are driven by pride, the desire to be first, reputation, whuffie. But dollars? That often screws it all up.“ – John Battelle
  21. 21. Network Effects
  22. 22. The Network is the Computer The network effect is a characteristic that causes a good or service to have a value to a potential customer dependent on the number of customers already owning that good or using that service. For example, by purchasing a telephone a person makes other telephones more useful. http://en.wikipedia.org/wiki/Network_effects
  23. 23. Last.fm vs Pandora
  24. 24. over… This battle is nearly over…
  25. 25. …or is it?!
  26. 26. Last.fm is my data broker
  27. 27. Artists I like playing soon and nearby
  28. 28. Advertising
  29. 29. Implicit user data can drive $
  30. 30. Implicit user data can drive $
  31. 31. Advertising networks and exchanges
  32. 32. Conclusion
  33. 33. Hire more engineers…!
  34. 34. The efficiency war is here quot;The average export price of Chinese [motorcycles] has dropped from $700 in the late 1990's to under $200 in 2002. The impact on rivals has been brutal: Honda's share of Vietnam's motorcycle market, for instance, dropped from nearly 90 percent in 1997 to 30 percent in 2002.“
  35. 35. Resources Books, Papers, Articles • “Connecting Globalization & Innovation”, John Hagel and John Seely Brown • “The World Is Flat”, Thomas Friedman • “What is Web 2.0”, Tim O’Reilly • “Coase’s Penguin”, Yochai Benkler • HBR, “Platform-Mediated Networks:Definitions and Core Concepts”, Jan 2007 Blogs About Publishing Business • Rex Hammock • Paul Conley • Scott Karp Important Industry Blogs • PaidContent • ProgrammableWeb • Umair Haque’s Bubblegeneration • Fred Wilson • Lawrence Lessig • John Hagel’s Edge Perspectives • Nick Carr’s Rough Cut
  36. 36. Thank you. Matt McAlister http://www.mattmcalister.com/ mattmcal@yahoo.com 408-349-2705

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