Web 2.0: Why we got here, and what’s next Rolf Skyberg [email_address] Disruptive Innovator for eBay, Inc. Wednesday, May 27, 2009

my job title at eBay is both fun, and confusing

the role of “Disruptive Innovator”

is part Product Manager, part evangelist,

sometimes developer,

and always watcher .

my main job is to inspire and excite individuals both inside and outside eBay

by any means necessary.

a little history about myself:

my University major was business,

but I also minored in theatre

and later pursued graduate studies in System Science

“ System Science” is the study of complex interactions over time,

including topics like: computer networks, economics, traffic flow and human actions.

this morning I will be talking about:

people,

ploughs,

power,

horses,

dishwashers,

France,

bears,

beers,

windmills,

and maybe the internet.

(actually, the bears are just a joke)

this is in fact, a bear-free presentation.

and because there are no bears,

let’s start with windmills .

when I say “windmill”,

most people think about:

but I’m not talking about Dutch windmills

I’m talking about:

much as Dutch windmills opened up new land

by removing water,

American windmills were a critical part of settling the “ Great American Desert ”

by adding water.

“ Oh, you’ve never heard of the Great American Desert? ”

much of the American west was purchased from France

by President Jefferson in 1803 as part of the Louisiana Purchase,

essentially sight-unseen.

?

seeking to explore this land and encourage settlement,

the federal government dispatched a mission of exploration in 1819

which surveyed the land for a total of 4 years.

in 1821, Stephen Long published journals including this map:

on which he added the cautionary text:

“ frequented by roving bands of indians who have no fixed place of residence, but roam from place to place in search of game ”

his annotation was associated with an area he called the “ Great Desert”

it wasn’t a desert like the Sahara desert,

but it was extremely harsh.

for the first settlers

coming from the wet, hilly Atlantic coast,

lands West of the Mississippi

appeared to be hostile to settlement and farming.

Long’s description discouraged settlers

and the reality of what was in the West didn’t help either:

no trees,

no water,

soil you couldn’t plow because of thick native grasses,

and far away from civilization and transportation.

the first issue was solved by a technical pioneer:

the ploughs designed for the sandy soil of the East

were entirely useless in the thick clay soil of the West,

so he invented (and became rich from)

the steel plough

but even though you could plough the soil,

you still couldn’t grow anything

because there wasn’t enough rain.

Daniel Halladay solved this problem in 1854

with his autonomous wind-pump

these pumps tapped a huge underground water source

just a hundred meters below ground

called the “Ogallala Aquifer”.

prospects started looking better,

but the West was still a desolate, lonely place.

even if you could grow enough grain to sell at a market, there was no way to get it there

the final step in settling the west came in the form

of a trans-continental railroad

completed in 1873, the railroad linked farms with markets

finally making it possible for families to earn a living.

this area is now known as The Great Plains,

and is one of the most productive areas of farmland in the world.

just a hundred meters below ground.

European settlement of the west

happened only because it was enabled by a series of technologies.

working together, windmills, steel ploughs, and train transport

enabled settlers to enter an environment entirely new and different,

and created the movement we call “settling the west”.

Web 2.0 is the same pattern.

western settlement wasn’t a “thing”, it was an era .

Web 2.0 also isn’t a “thing”, but a t ime.

Web 2.0 is the time when many events,

both technological and social

have converged to create apparently boundless opportunity.

“ But if it’s not a thing, why all the excitement?”

let’s look at how people think,

how about a graph?

TIME

TIME now we need something on this graph

what we can do what we can’t do TIME

what we can do what we can’t do TIME “ our expectations”

“ inflections in expectation”

as our expectations exceed what a product can deliver, we lower our expectations over time

of course, products are always improving

and our expectations rise again

when we see “ something new”

these are “ inflections of expectation”

of course, in our excitement, we forget this portion of the graph

so when we see this part of the graph

we go here

but remember this part of the pattern?

because we’re really going here

? and what’s this space here?

the bubble

“ Are you telling me that, Web 2.0 is all fluff and bubble then?”

no, absolutely not,

but who is telling you it is important?

marketers and pundits?

bloggers?

analysts?

beware of anyone who claims they can “do” Web 2.0 for your business.

the rules of business have not changed

the most important thing you can do is serve your customers well.

if you feel you must embrace Web 2.0,

approach each new technology as you would any other for your business

carefully consider the reasons for implementing it,

and the value payback.

however, it may be likely that you do not have the expertise

to know what is “best” for your customers in this regard.

“ And how will I know what is best for my customers?”

here are two simple things you can do to make your customers love you:

(get our your pencils)

1 ) give them what they need

2 ) don’t steal from them

to understand what they need,

let’s look at some similar patterns:

Tom Standage

200 years ago

Claude & Ignace Chappe

built a network

transmitting

military & governmental information

their system

optical telegraph

(556 nodes)

(4,800 kilometres)

swinging arms

“ telegraph”

“ far writer”

fast!

indeed,

fast-er

s l o w

2 words per minute.

the concept behind optical telegraphy

laid the groundwork

Samuel Morse ... .- -- ..- . .-.. / -- --- .-. ... .

initially used by railway lines & government

also commercialized

private entrepreneurs

speculated

business people would be willing to pay

for this rapid communication

so they launched

pay-per-word services

[only] businesses

high cost per message

nonetheless:

expanded

interesting thing happened:

some people

free,

un-metered access:

the operators.

young,

talented,

very bored.

when you don’t have to pay…

jokes

stories

friends, court, marry.

we start to see a progression of human priorities:

(1) support your military

(11) make a dollar

(111) “chat”

we see the same pattern,

with telegraph’s successor:

radio

rich history in the story of radio,

but we’ll start at:

1944

Motorola “Handie Talkie”

infantry field radio

after the war,

business saw the value of wireless connectivity

commercialized the technology

built a cellular network

1984

Motorola “ DynaTAC” 8 000 X

“ the brick”

pitched at the business market,

pretty much its only market,

with a $4000 price tag

21 years later…

Motorola RAZR

in pink, commonly sported by adolescent girls

for almost entirely social purposes.

if we trace the priorities again,

1. fear money initially funds a technology

2. business money expands the network

3 . the network is adopted for social needs

in simpler terms,

the order of the market’s priorities seem to be:

1. safety

2. prosperity

3. socialization.

luckily, we’ve seen this pattern before

“ Maslow’s Hierarchy of Needs”

Abraham Maslow

his paper: “A Theory of Human Motivation”

1943

model

describes the needs, wants, desires of individuals.

the model itself:

“ levels” or tiers

survival

security

belonging

esteem

enlightenment.

lower levels supersede upper levels

for example:

you wouldn’t want to

be social belonging

security losing your job

similarly,

you probably wouldn’t care

security drop your wallet

survival chased by wolves

the tiered system enforces an “order” to priorities.

markets as a whole,

follow this same hierarchy.

if we look at a market

market == collection of individuals

each individuals’ actions

combine to create

“ market pressure”

markets act like the individuals in that market.

we see the same pattern in the

Internet

first, something everybody can agree upon

Web 0 .0 (ARPANET) defense

protects everybody’s basest level of needs

now that we all feel like we’ll survive,

“ ensure our future, make a buck”

commerce Web 1 .0

Web 1.0 focused on selling things,

because things are easy to count

and therefore easy to prove profit-margins on.

lastly

“ individual needs”

social beings Web 2 .0

“ What I’m hearing, is that I should build a social network?”

yes and no.

actually, please don’t.

there are much better things that you can spend your money on.

highly successful businesses understand this hiearchy

and use it for profit.

remember, these priorities are innate to all humans,

so these motivations apply both online and offline.

for example:

(here’s the audience participation time) (test your global business knowledge)

what thing?

all sell,

not related to their core business?

hot dogs.

why?

because they want you to participate

commerce shop

but as a human you still need to fulfil

survival eat

two at once:

survival eat commerce shop

“ profit!”

“ rounding error”

considering human needs

increases business

by enabling their users

to focus on their product.

now that we’ve understand the model

let’s look at:

How to use this model (for fun and profit)

going back to MySpace for a second,

the model helps us frame some “miraculous” things we’ve seen.

while at the Web 2.0 Expo, I overheard:

“ MySpace --- and who would have guessed that would take off? ”

now, for their target market,

putting food on the table and paying the mortgage aren’t the most important things,

so they have a lot of time and energy,

to focus on these two needs,

higher on the pyramid

be social be myself MySpace sweet spot

we’re surprised that teens are drawn to a place where they can:

listen to music

talk loudly

and express themselves without parental supervision?

we had MySpace before,

but it was called “the ice cream parlor”

or the arcade,

or “down by the river”

or the hayloft .

even as adults, we seek places where we can

talk loudly, listen to music, and possibly act like a fool

we call this “ the pub”

if you don’t believe in the possibilities of this business model,

consider the “ Ye Old Trip to Jerusalem”

since 1189.

I encourage you to look beyond

how you currently serve your public

and deliver on products which address their whole human,

above and below the commerce levels if possible.

I should warn you,

the pyramid has strong influences that are not to be ignored

at even the most fundamental product level

an example from eBay’s own experience

“ eBay Blogs”

we thought we were building:

esteem expression be myself

so let’s look at a typical blog entry from last night:

“ nighty nite all >*o*< sweet dreams my friends i have to work early so i prob wont see yas tomorrow morn. have a good night ”

>*o*<

and the “ blog comments” on that entry?

good night SWEET DREAMS Nite - new banner - nice - sleep well dear - catch ya sometime tomorrow. Good night dd. Have a nice day at work tomorrow. Have a good night! Nite! Good Night

good night

SWEET DREAMS

Nite - new banner - nice - sleep well dear - catch ya sometime tomorrow.

Good night dd. Have a nice day at work tomorrow.

Have a good night!

Nite!

Good Night

[not] eBay Blogs

eBay chat.

eBay chat. a very terrible

unfulfilled

belonging social beings be social

new tool?

my needs.

If all you have is a hammer, everything looks like a nail.

we gave them a screwdriver,

which is found to be a poor hammer

(but that’s not going to stop anybody from pounding nails with it).

“ But didn’t you say something about not stealing?”

yes.

don’t steal,

nobody likes a thief,

and they will only put up with it as long as they have no alternative.

but all businesses “steal”,

so the business that steals the least, wins .

in the hierarchy model,

as tiers increase, expendable resources decrease

because total resources are finite.

illustration

ten below zero

eleven at night

$65

hotel: $55 dinner: $5 the movie channel: $10

survival security belonging esteem enlightenment $55 + $5 for lodging and food

survival security belonging esteem enlightenment all our money spent right here

the more energy our members waste in finding the basics,

such as

help

search

login

submit

and “ contact us ”,

the less energy they have to actually enjoy your product.

and if you don’t want them spending their precious time there

make it so they never need to ask for help.

because making them work to use your site

is stealing their time

and flushing it down the toilet.

they don’t like their time wasted,

and it’s not making you any money.

make products that delight and empower your users.

your members will continue to be humans

and human needs aren’t changing

so success will go to the products,

that fulfills the most needs,

with the least amount of waste

waste =

“ anything which doesn’t delight or empower your users ”

because anything else, you’re stealing their time

you can only get by stealing for so long.

now that I’ve given you some new tools,

lets sum this all up by applying some of them

New Ways of Looking at the World

we should stop being fascinated

that our phones and cars and toilets are ‘internet enabled’

just like you’d never say,

OMG, UR DISHWASHER RUNZ on ELECTR1CITY ??!!!

the most successful of us

will stop looking at the internet as Web X.Y ,

but as a tool to help us cope with our inability

to store, process, retrieve and transmit massive amounts of information

with other humans not near me.

without amplification, the human voice carries maybe 100 meters,

since the dawn of time, humans have been looking for way to amplify that voice

and the internet is the latest (fastest) version of that desire yet.

but it is fundamentally no different than the letter, telephone or telegraph.

another lesson from the pyramid,

what about the social aspect of what you’re doing?

imagine reading a book, but you couldn’t tell your friends about it

imagine buying a house, but you couldn’t throw a party?

the pyramid shows us that we are fundamentally social creatures

the internet has the capability to provide rich interaction

and where it makes sense, interweaving that social nature can dramatically add to our experience

so here’s the tricky part:

building a product is like building a house

water and electricity are useful things to nearly everybody

the skill lies in knowing what rooms need what

and the last one (which is really more of a warning)

it is important to temper hype with clear thinking,

there will be many ill-conceived uses of recently “discovered” aspects of computing

on the web, I’m talking about discoveries such as: AJAX social networking community filtering badges widgets RSS viral apps

just because something works in one place, doesn’t mean it has a use every place

consider an advertisement from 1909 during a similar “2.0” time of history:

For weakness in men and women, personal exhaustion bringing back lost strength and power, over brain work, vitality, impotency, rheumatism, lame back, railroad back, insomnia, melancholia, kidney disorder, dyspepsia, disorders of the liver, poor circulation, weak heart action and almost every known disease and weakness . The constant soothing alternating electric current is ever at work touching the weak spots, building up the system, stimulating the circulation. ALL THAT ELECTRICITY WILL DO FOR YOU WILL BE RECEIVED!

you know all about “ usability studies”

but what about “ feasibility studies”?

I’m sure the enhancement is technically feasible

but will it survive in the market?

McDonald’s knows how to setup a “restaurant”

but before they build one,

they study the streets, the demographics, the foot traffic, and their competitors.

they do this because installing a business is a costly experiment,

so they need it to stick around for awhile.

ask yourself,

am I investing in something that will last in the long run?

luckily, there is an easy way to think of these things:

“ does this make me laugh or help me out?”

“ does this product directly address a basic human desire?”

“ would this be useful to a villager in a developing nation?”

to build tools, services and experiences which empower and delight your users and employees

not only makes sense,

it’s good for business.

I believe:

in “life, liberty and the pursuit of happiness…”

and together,

we can bring that spirit to everyone.

The End.

Rolf Skyberg [email_address] http://rolfskyberg.wordpress.com

Thank you to: Lawrence Lessig, for the presentation style Dick Hardt, for the inspiration Inkscape, for a wonderful vector graphics tool Rebecca Rijnders for inviting me EMERCE for e.day and you, (yes you), for coming

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Rolf Skyberg [email_address] http://rolfskyberg.wordpress.com