Web 2.0


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A presentation I gave at McKinsey to introduce web 2.0 and it's impact on business.

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  • Web 2.0

    1. 1. WEB 2.0 The web is certainly making an impact somewhere near you. Laurent HAUG [email_address] www.liftconference.com
    2. 2. Table of contents <ul><li>Defining web 2.0 </li></ul><ul><li>What’s happening? </li></ul><ul><li>You’re in (try to enjoy the ride) </li></ul><ul><li>Business 2.0 </li></ul><ul><li>What’s next? </li></ul>
    3. 3. DEFINING WEB 2.0 A billion people, a billion definitions.
    4. 4. http://www.oreillynet.com/lpt/a/6228
    5. 5. Tim O ’Reilly’s Web 2.0 <ul><li>The Web As Platform </li></ul><ul><li>Harnessing Collective Intelligence </li></ul><ul><li>Data is the Next Intel Inside </li></ul><ul><li>End of the Software Release Cycle </li></ul><ul><li>Lightweight Programming Models </li></ul><ul><li>Software Above the Level of a Single Device </li></ul><ul><li>Rich User Experiences </li></ul>
    6. 6. 1.0 <-> 2.0
    7. 7. Core Competencies of Web 2.0 Companies <ul><li>Services, not packaged software. </li></ul><ul><li>Control over unique, hard-to-recreate data sources that get richer as more people use them </li></ul><ul><li>Trusting users as co-developers </li></ul><ul><li>Harnessing collective intelligence </li></ul><ul><li>Leveraging the long tail through customer self-service </li></ul><ul><li>Lightweight user interfaces, development models, AND business models </li></ul><ul><li>Source: O’Reilly </li></ul>
    8. 8. A disputed term <ul><li>No real boundaries </li></ul><ul><li>Multiple interpretations </li></ul><ul><li>Defining a moving concept </li></ul><ul><li>Web can’t be versioned </li></ul><ul><li>Original vision of the web </li></ul>
    9. 9. A disputed term <ul><li>World Economic Forum Annual Meeting 2007 - The Impact of Web 2.0 (check the video on videos.google.com) </li></ul><ul><ul><li>“ Web 2.0 definitely is a buzzword, and it’s overused. But the movement is only starting. That movement is about leveraging the power of people” CHAD HURLEY </li></ul></ul><ul><ul><li>“ What we’re seeing is a return to the roots of the web.” CATARINA FAKE </li></ul></ul><ul><ul><li>Web 2.0 “is enabling a fundamental shift in power that really is giving power to the consumer” MARK PARKER </li></ul></ul><ul><ul><li>“ It’s a way to collaborate with your customers, to allow them to co-create with you”. PETER SCHWARTZ </li></ul></ul>
    10. 10. WHAT’S HAPPENING (AND WHY?) Why you can’t not care about the internet anymore
    11. 11. New players
    12. 12. ONLINE $
    13. 13. The end of the 50% of useless ads <ul><li>Total U.S. Internet Spending (M$) </li></ul><ul><ul><li>2000: 7’134 </li></ul></ul><ul><ul><li>2006: 15’998 </li></ul></ul><ul><li>Search Advertising </li></ul><ul><ul><li>2000: 286 </li></ul></ul><ul><ul><li>2006: 6’681 </li></ul></ul><ul><li>8% of total US advertising online in 2006E, 13%+ within 5 years. </li></ul>Source: The State of the Internet, Morgan Stanley
    15. 15. Tools for the people <ul><li>Blogs </li></ul><ul><li>Technorati </li></ul><ul><li>coComment </li></ul><ul><li>Wikis </li></ul><ul><li>Digg </li></ul><ul><li>CMS </li></ul><ul><li>Sourceforge </li></ul><ul><li>IM </li></ul><ul><li>Chat </li></ul><ul><li>ADSL </li></ul><ul><li>RSS </li></ul><ul><li>APIs </li></ul><ul><li>ASP </li></ul><ul><li>ROR/LAMP </li></ul><ul><li>Ajax </li></ul><ul><li>Tags </li></ul>
    17. 17. From an elite/geeky media to grandma’s living room Source: The State of the Internet, Morgan Stanley Mobile Internet 1’000+ 1’343 2007 600+ 1’191 2006 300+ 1’039 2005
    18. 18. <ul><li>10-15%user growth </li></ul><ul><li>20-30%usage growth </li></ul><ul><li>30%+ monetization growth </li></ul><ul><li>Source: The State of the Internet, Morgan Stanley </li></ul>
    20. 21. Idea = business <ul><li>Cheap hardware </li></ul><ul><li>Cheap platforms (Linux, Apache) </li></ul><ul><li>Open source = you never start from scratch </li></ul><ul><li>Coders everywhere </li></ul><ul><li>Money, reputation, location, network don’t matter as much as before. </li></ul>
    21. 22. Startuping is cheap <ul><li>DropSend: Build $48,012 / Monthly $3,625 </li></ul><ul><li>Freshbooks Build $20,000 / Monthly $46,000 </li></ul><ul><li>Maya’s Mom: Build $70,000 / Monthly $30,000 </li></ul><ul><li>Mobissimo: Build $60,000 / Monthly $150,000 </li></ul><ul><li>Wesabe: Build $200,000 / Monthly: $3,000 </li></ul><ul><li>http://thebankwatch.com/2007/03/15/how-much-does-it-cost-to-build-the-best-web-apps-today-and-how-should-banks-react/ </li></ul>
    22. 24. scoble
    23. 25. Techcrunch
    24. 27. [email_address] www.liftconference.com technorati technorati.com/search/cocomment
    25. 29. BUZZWORD?
    26. 30. A new reality <ul><li>Customer as the new center of gravity </li></ul><ul><li>Global competition, open world </li></ul><ul><li>New markets (china, russia, senior citizens, long tail) and spaces (online worlds, TVoip, voip, advertising, work collaboration) </li></ul><ul><li>New audiences </li></ul><ul><li>Impact on all aspects of business </li></ul>
    27. 31. New rules <ul><li>New balance of power </li></ul><ul><li>New workforce </li></ul><ul><li>New tools </li></ul><ul><li>New competition </li></ul><ul><li>New business models </li></ul><ul><li>New lifestyle </li></ul><ul><li>New environment </li></ul>
    28. 32. New players <ul><li>GYM </li></ul><ul><li>Amazon </li></ul><ul><li>Ebay </li></ul><ul><li>Wikipedia </li></ul><ul><li>Feedburner </li></ul><ul><li>Flickr, blogger, Skype, technorati, techcrunch, mybloglog, cocomment, weblogs inc, numsum, writely, etc etc… </li></ul>
    29. 33. New opportunities <ul><li>New possibilities </li></ul><ul><li>New audiences </li></ul><ul><li>New markets </li></ul><ul><li>New worlds </li></ul>
    30. 34. New challenges <ul><li>Share control </li></ul><ul><li>Competition everywhere </li></ul><ul><li>Ideas everywhere </li></ul><ul><li>Privacy / transparency </li></ul><ul><li>Sustainability of business models </li></ul><ul><li>Bubble? </li></ul><ul><li>etc… </li></ul>
    31. 35. New concepts and ideas <ul><li>Markets are conversations </li></ul><ul><li>Customer is king </li></ul><ul><li>Folksonomies </li></ul><ul><li>Wisdom of the crowds </li></ul><ul><li>Crowdsourcing </li></ul><ul><li>Network effect </li></ul><ul><li>Open is sustainable </li></ul><ul><li>Co-creation </li></ul><ul><li>Social Network </li></ul><ul><li>Perpetual beta </li></ul><ul><li>Open source </li></ul><ul><li>Mashups </li></ul><ul><li>Long tail </li></ul><ul><li>The world is flat </li></ul>
    32. 36. Markets are conversations <ul><li>Micro publication </li></ul><ul><ul><li>Blogs, podcasting, vlogs </li></ul></ul><ul><ul><li>Decentralization of information gathering </li></ul></ul><ul><ul><li>Barrier to entry is talent </li></ul></ul><ul><ul><li>Audiences are up for grab </li></ul></ul><ul><li>Somebody out there is talking about you </li></ul><ul><li>Nobody can control the online conversation </li></ul><ul><li>“ The cluetrain manifesto”, Doc Searls, David Weinberger, etc… </li></ul><ul><li>“ Naked conversations”, Robert Scoble and Shel Israel. </li></ul>
    33. 37. Customer is king (no kidding!) <ul><li>People want to participate and have the tools to do so. </li></ul><ul><li>Trust in peers, not in marketing discourse. </li></ul><ul><li>People can now force a company to change it’s path (Sony, Kryptonite, Broadcast flag, Vichy, Google bombs) </li></ul>
    34. 39. Google bombs
    35. 40. The world is flat Thomas Friedman (NYT columnist) “ the world is becoming flat. Several technological and political forces have converged, and that has produced a global, Web-enabled playing field that allows for multiple forms of collaboration without regard to geography or distance - or soon, even language.” http://www.wired.com/wired/archive/13.05/friedman_pr.html
    36. 41. Friedman’s 10 Great Levelers <ul><li>Fall of the Berlin Wall </li></ul><ul><li>Netscape IPO </li></ul><ul><li>Work flow software </li></ul><ul><li>Open-sourcing </li></ul><ul><li>Outsourcing </li></ul><ul><li>Offshoring </li></ul><ul><li>Supply-chaining </li></ul><ul><li>Insourcing </li></ul><ul><li>In-forming </li></ul><ul><li>Wireless </li></ul>
    37. 42. The long tail
    39. 44. The web is out of its silo <ul><li>It is having an impact on your market, your strategy, your people, your competitors, your processes, etc.. </li></ul><ul><li>Take it out of the IT department. </li></ul><ul><li>www.liftconference.com </li></ul>
    40. 45. YOU’RE IN You are already making the new web better.
    41. 46. Passive contributions <ul><li>Every time you search, you make Google better </li></ul><ul><li>Amazon </li></ul><ul><li>Gmail </li></ul><ul><li>Analytics </li></ul>
    42. 47. Active contributions <ul><li>Blogging </li></ul><ul><li>Commenting </li></ul><ul><li>Tagging </li></ul><ul><li>Digging </li></ul><ul><li>Wikiing </li></ul>
    43. 48. People are talking about you <ul><li>Technorati </li></ul><ul><li>coComment </li></ul><ul><li>Video/audio search </li></ul><ul><li>Flickr </li></ul>
    44. 49. BUSINESS 2.0 Buckle up
    45. 50. A few examples <ul><li>User generated content </li></ul><ul><li>Communities </li></ul><ul><li>Co-creation </li></ul><ul><li>Outsourcing </li></ul><ul><li>Global microbrand </li></ul><ul><li>3D </li></ul>
    46. 51. Youtube <ul><li>User generated content </li></ul><ul><li>Targeted ads </li></ul><ul><li>See also: vPod, DailyMotion, mySpace </li></ul>
    47. 52. MTV <ul><li>Following changes in audience habits </li></ul><ul><li>Moving from TV to community </li></ul><ul><li>Complete change in business model </li></ul><ul><li>Complete change in competitive landscape </li></ul><ul><li>See also: Le Monde, Guardian, BBC </li></ul><ul><li>BREAKING NEWS: Read the latest State of the Media 2007 report! http://www.stateofthemedia.org/2007/ </li></ul>
    48. 53. Lego <ul><li>Co-creation with customer </li></ul><ul><li>Lego mindstorm </li></ul><ul><li>And also: Lafraise, Microsoft, Google. </li></ul>
    49. 54. L’oréal <ul><li>Outsourcing of critical (and fun) tasks to customers </li></ul><ul><li>Focus on practical side </li></ul><ul><li>current_TV ( tinyurl.com/25kr3v ) </li></ul><ul><li>See also: IBM brainstorm, Apple, Wikipedia. </li></ul>
    50. 55. Stormhoek <ul><li>Global microbrands, leveraging the long tail </li></ul><ul><li>And also: Moo.com, 37signals, English Cut, Thingamy, TVBgone, Cafepress, Stardoll </li></ul><ul><ul><li>“ most of our members are girls and boys between the ages of 7 and 17. Stardoll is one of few places on the Internet developed with an emphasis on girls’ self-expression and fantasy fashion play” </li></ul></ul>
    51. 56. World of warcraft <ul><li>Persistent 3D world </li></ul><ul><li>Parallel economy </li></ul><ul><li>See also: Second Life, Playstation home, Xbox live </li></ul>
    52. 57. WEB 2.0 BUSINESS MODELS
    53. 58. Service based <ul><li>Moo.com </li></ul><ul><li>Service model </li></ul><ul><li>Probably 2-3 months of coding </li></ul><ul><li>Built on top of Flickr </li></ul><ul><li>25$ for 100 business cards </li></ul><ul><li>Most viral product ever </li></ul>
    54. 59. <ul><li>Meetic </li></ul><ul><li>Freemium / subscription based model </li></ul><ul><li>Millions of people </li></ul><ul><li>Moved past early reserves (now it’s the normal behaviour) </li></ul>Freemium
    55. 60. <ul><li>Action based advertising </li></ul><ul><li>Netvibes, Kelkoo </li></ul><ul><li>Empty toolbox </li></ul><ul><li>Built on top of the web </li></ul>CPA
    56. 61. CPM <ul><li>Mass (but targeted) display advertising </li></ul><ul><li>Joost, feedburner </li></ul><ul><li>Precise knowledge of audience location and behavior </li></ul>
    57. 62. Revenue sharing <ul><li>Make money on users’ content </li></ul><ul><li>Revver </li></ul>
    58. 63. <ul><li>Flickr camera info </li></ul><ul><li>Data mining </li></ul><ul><li>Creating value from data without violating privacy </li></ul>Datamining
    59. 64. BEYOND WEB2.0
    60. 65. If I could be sure of this slide, I would be in the Bahamas right now <ul><li>Intention economy </li></ul><ul><li>Mobile </li></ul><ul><li>New centers of gravity (post, infosnack) </li></ul><ul><li>New kings </li></ul><ul><li>3D </li></ul><ul><li>Communicating objects </li></ul><ul><li>Semantic web </li></ul>