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Web 2.0: Lies, Mystery, and Opportunity


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Web 2.0: Lies, Mystery, and Opportunity

  1. Web 2.0: Lies, Mystery, and Opportunity Rolf Skyberg [email_address] Disruptive Innovator for eBay, Inc. Monday, 16 June 2008
  2. I often get asked:
  3. “ what exactly does a disruptive innovator do? ”
  4. I am tempted to say,
  5. I innovate,
  6. disruptively.
  7. but that’s simplifying things.
  8. I do innovate disruptively,
  9. but I also have the roots of an evangelist,
  10. and it’s in the combination of the two,
  11. that I can be most effective.
  12. sometimes, my disruption is the innovation
  13. sometimes, my innovation is the disruption
  14. more to the point,
  15. the wider I can spread new ways of looking at the world,
  16. the more disruption I can cause, by proxy.
  17. and hopefully, that disruption
  18. starts with you.
  19. last year I told you about
  20. horses,
  21. radios,
  22. birds,
  23. dishwashers,
  24. and France.
  25. this year will be
  26. no different.
  27. I also told you
  28. that you should sell hotdogs,
  29. imagine the social aspects of your business eat shop
  30. and to stop being fascinated
  31. that your toilet is internet enabled.
  32. of course, not to mention,
  33. my favorite slide
  34. the electric jock strap.
  36. this year I'm going to tell you a new story
  37. twice as shocking as the electric jockstrap,
  38. and no less important.
  39. it starts, now:
  40. The Lie (we all wanted to believe)
  41. the title of my presentation last year was:
  42. "Web 2.0: Why We Got Here and What's Next"
  43. I remember thinking as I stood before you
  44. "well isn't Web 2.0 a little dated?
  45. “ isn't it kinda already over?"
  46. but based on the reception I received,
  47. the message that I gave was right on target.
  48. I'm going to start this presentation
  49. by reminding you of last year's message,
  50. "Web 2.0 is great and all,
  51. but it can be even better if you fulfill needs.”
  52. perhaps the part of the previous sentence left off
  53. is the why .
  54. of course it's implied:
  55. by fulfilling needs, you increase your business
  56. and therefore profit.
  57. but what if you're not generating any profit in the first place?
  58. what if you’re just starting out?
  59. is Web 2.0 still the path to riches?
  60. this morning I'm going to paint you a picture
  61. of where others have left off
  62. and your opportunity begins.
  63. maybe I should have entitled this session:
  64. Web 2.0: show me the money
  65. so let's start with a story:
  66. since ancient times
  67. it was known that rubbing a piece of amber jewelry
  68. with a patch of fur
  69. could create an electric shock
  70. specifically, the rubbing would create static electricity.
  71. an imbalance of electrons <ul><li>+ </li></ul>+ + + + + + _ _ _ _ _ _ + _ _
  72. wanting to “jump back” from where they came from. + + + + + + + _ _ _ _ _ _ + _ _
  73. you've probably been shocked
  74. when exiting your car
  75. even though your seat is not made of amber,
  76. and your backside is not covered in fur.
  77. for a long while,
  78. static electricity was regarded as a curiosity:
  79. something known, but not understood.
  80. in the 1700's experiments started in earnest
  81. and scientists got pretty adept at creating a charge
  82. but they still didn't know what to do with it.
  83. so, they took turns igniting tins of alcohol,
  84. shocking themselves and each other,
  85. lining up monks in a mile-long row
  86. and shocking them,
  87. shocking birds and beasts at a distance,
  88. and even lining up 900 soldiers
  89. having them hold hands
  90. and shocking the wits out of them
  91. for the amusement of the royalty.
  92. electrity was great,
  93. a fun party game
  94. but what to do with it?
  95. they made all sorts of fascinating devices
  96. some for shocking
  97. some for sending sparks shooting across the room
  98. one was a tiny cannon you filled with swamp gas,
  99. corked the end, and ignited with a spark.
  100. heady with passion of the era,
  101. embracing both the ducats
  102. and the time's discoveries,
  103. these illustrious researchers
  104. created a series of fantastic contraptions.
  105. their elaborate machines
  106. were financed by the kings and queens,
  107. or lords and barons
  108. (some of whom they were themselves)
  109. and often drew a large audience,
  110. or at least the consternation of popes.
  111. and yet, electricity was still a novelty:
  112. while these machines might be good
  113. at making dead frogs dance,
  114. hardly was this a path to riches.
  115. the real value of electricity
  116. wouldn't be known for another 150 years,
  117. when someone figured out how
  118. to turn it into a reliable light source.
  119. shocking each other was amusing
  120. for a century and a half,
  121. but darkness itself was the problem electricity was to eventually solve.
  122. let me tell you another story
  123. with a similar beginning,
  124. and a twist near the end.
  125. in the dark days following the first dot-com bust
  126. the world was flush with opportunity:
  127. massive investment
  128. in internet-delivered dog food
  129. was now sunk cost
  130. and the raw materials for growth
  131. were abundant.
  132. one raw material was the trained professionals
  133. and as you would expect:
  134. with no dot-com to boom,
  135. they were bored.
  136. the curious among them started picking up the pieces
  137. mashing them together in interesting ways
  138. and creating new fantastic machines.
  139. eventually they needed help,
  140. and additional dollars,
  141. and it wasn't long before the engineers and VCs came
  142. attracted by a hunger
  143. to be part of the next big thing.
  144. the gadgets with promise
  145. attracted the most attention,
  146. and collectively began to take shape.
  147. whatever that thing was with the old web,
  148. this new one is awesom r !
  149. instead of watching dead frogs dance
  150. you could view numa numa dance on YouTube
  151. let your friends know through Digg,
  152. bookmark it with,
  153. spam your contacts on their myspace wall
  154. all while snapping photos of their reaction
  155. to then post on Flickr
  156. and what was the twist?
  157. lumbering giants of the first internet age awoke
  158. reached for their wallets
  159. and plonked down fat stacks of cash.
  160. these new startups should fit nicely
  161. with their existing cash streams.
  162. suddenly, the new exit strategy wasn't an IPO
  163. it was getting bought out.
  164. create a machine that's fantastic enough
  165. and somebody wealthier than you
  166. will step in and make your dreams come true.
  167. yippeee!
  168. massing their arsenal,
  169. the remaining entrepreneurial among them
  170. smelled the fortune and dove in with both feet.
  171. the lie we all wanted to believe
  172. was that all it takes is a quirky idea,
  173. grab some pieces,
  174. and a whole lot of pastel graphics.
  175. then,
  176. step 4 profit!
  177. and perhaps it wasn't a lie really,
  178. nobody told us that we'd attain fame and fortune
  179. but we hoped,
  180. we believed.
  181. we watched a lucky few come up all cherries
  182. in round two of the web.
  183. yet some held back
  184. “ I don't get it,” they'd say
  185. “I don't believe it,” said others.
  186. the skeptics were unswayed by the new web
  187. at lunch time, the old guard and new guard would spar:
  188. &quot;how are you going to make money showing videos on the internet?&quot;
  189. &quot;doesn't matter!” they reply,
  190. &quot;we'll just put some ads on it!&quot;
  191. and therein lay the mystery:
  192. if the coffers of Web 1.0
  193. wouldn't cough up the cash for all of their projects
  194. how were they going to make money?
  195. it's wonderful if you can create: the next social network around categorizing and tagging media via your mobile phone
  196. but is anybody going to pay to use it?
  197. The Mystery (of what to do next)
  198. problem was,
  199. many of these fantastic machines
  200. were novel toys,
  201. stunning in their own right,
  202. but still largely
  203. flights of fancy.
  204. they were solutions without problems,
  205. or at least:
  206. solutions without problems people would be willing to pay for,
  207. yet.
  208. how do you monetize something never designed to make money?
  209. if cash flow wasn't part of your original objectives,
  210. it's unlikely it will exist in the final product.
  211. to understand the future, we must look to the past,
  212. the pieces that I've been mentioning
  213. are ones you should all recognize,
  214. in fact, I mentioned most of them last year.
  215. what's interesting is to understand how they fit in context.
  216. Web 1.0 pushed our technology hard
  217. and we saw giant improvements in big databases and cheap connectivity.
  218. the databases gave us a place to put all our stuff,
  219. and the connectivity let us get it back out again.
  220. the ability for users to upload created a flood
  221. from niche markets,
  222. amassing us something to &quot;put&quot; in our new services,
  223. and creating a sense of purpose.
  224. surely all these people
  225. with all this stuff
  226. must need services!
  227. throw in the next generation of
  228. synchronous and asynchronous communication
  229. and you've got some &quot;life&quot; around stuff,
  230. there are people here and it's interesting!
  231. these five pieces laid the groundwork for the next five:
  232. major websites built names around the voting and ranking of content,
  233. delivering the &quot;best&quot; stuff to the most people.
  234. on the fast, cheap storage
  235. we had plenty of space to squirrel away
  236. rich resources like photos and video.
  237. and once we had the interesting stuff to watch and view,
  238. the technological cleverness of AJAX
  239. let us achieve this without hassle
  240. and also stream this across the web,
  241. via embedded widgets.
  242. other major building blocks
  243. are the creation of reputation over time,
  244. mass-user editable content,
  245. social networking functionality,
  246. pushing info out through feeds,
  247. or aggregating it in,
  248. and embracing the mobile world.
  249. so imagine this petri dish of a world
  250. and what happens when you let it grow…
  251. flickr is built of these parts
  252. so is YouTube,
  253. Wikipedia,
  254. Digg,
  255. and Facebook.
  256. they all share a common DNA
  257. and their success would have been impossible without it.
  258. this world was flush with investment and enthusiam,
  259. everyone pumping the environment with hopes and dreams
  260. it's not suprising to assume,
  261. &quot;surely you could do something with these pieces?&quot;
  262. and of course you can build fantastic machines
  263. and they can solve real-world problems,
  264. but this isn't quite the real world, is it?
  265. these fantastic machines,
  266. these weird creatures,
  267. evolved in a world
  268. where they didn't have to make money <ul><li>? </li></ul>
  269. where the bottom line, was more of a
  270. &quot;hazy area&quot;.
  271. so where do you come in?
  272. what hope are we left with to make a buck?
  273. The Opportunity (before you)
  274. in the wake of 2.0 fervor,
  275. opportunities have multiplied.
  276. while some might regard Web 2.0 as an interesting,
  277. if ultimately over-hyped era,
  278. the clever among us don’t see the opportunity lost,
  279. but found.
  280. if you attempt to extrapolate
  281. the current group of Web 2.0 products,
  282. you get a very skewed conception of making money.
  283. lack of monetization pathways
  284. doesn't signal there's no future,
  285. but it does signal that the present is not a good indicator
  286. of what's to come.
  287. just like web 1.0,
  288. the 2.0 era included massive investment,
  289. and some of the work of our generation's best minds.
  290. the relative rarity of new millionaires
  291. doesn't imply the work done was for naught.
  292. because as the hopeful were toiling away
  293. crafting elegant and useful solutions
  294. to problems in their own special spheres,
  295. they were also sharing their solutions
  296. though open source and open platforms.
  297. and what we're left with is an incredible wealth,
  298. of potential solutions.
  299. so let's examine a few of the pieces
  300. to give you an idea of what I'm talking about:
  301. RSS feeds
  302. what we think they do: keep us updated on the latest news
  303. what they actually do: represent a uniform, user-controlled method of staying informed by providing a conduit to share information asynchronously across multiple platforms
  304. (this is a big deal!)
  305. opportunity fields: marketing, CRM, inventory management, metrics reporting
  306. voting
  307. what we think it does: allow users to rank the &quot;most popular&quot; of items
  308. what it actually does: with the right algorithm, separate the good from the bad
  309. opportunity fields: spam filtering, fraud detection, market research, collaborative creation, data normalization, taxonomy bootstrapping
  310. AJAX
  311. what we think it does: cool stuff on the web
  312. what it actually does: reduces operator fatigue, reduces wasted bandwidth, is a bridging tool between the document-based web and the next
  313. opportunity fields: personalized experience, live data integration, visualization and creation, navigation and click-through activity tracking, web-application creation
  314. social networking
  315. what we think it does: spam your inbox with vampire invites
  316. what it actually does: create &quot;protected spaces&quot; with in-built relationship roles and de-facto whitelists where members express themselves in often machine-parseable ways
  317. opportunity areas: CRM, marketing, opinion research
  318. mobile
  319. what we think it does: shows me tiny, painful little websites
  320. what it actually does: provides an always-on real-time bi-directional portal to the rest of the world, usually within 36 inches of the user, capable of monitoring physical location, capturing voice, video and photo
  321. opportunity areas: (can you even begin to imagine?)
  322. your opportunity
  323. is to find the problems
  324. these solutions solve.
  325. everyone in this room should know
  326. who wants these solutions.
  327. the people who want the answers,
  328. want the processes,
  329. are the people who can afford to pay
  330. because it's not an expenditure to them,
  331. its an investment.
  332. a rich new set of problems is waiting to be solved,
  333. and two major types of opportunity abound.
  334. if you want this all as a simple graph
  335. get out your pencils:
  336. we start with a line:
  337. now add web 2.0, draw your favorite fantastic machine
  338. and there are two stops in the middle:
  339. let’s label them for now:
  340. let’s label them for now: <ul><li>? ! </li></ul>
  341. oh, and we need a goal. ? !
  342. add in your favorite of your choice: ? !
  343. ? !
  344. on one side, we have the fantastic machines ? !
  345. on the other side, we have the businesses with problems. ? !
  346. notice how far apart Web 2.0 and the money are ? !
  347. because we forgot about that detail in our excitement. ? !
  348. businesses will reward you, ? !
  349. if you can flow through points one and two. ? !
  350. so what’s Point One?
  351. disassemble the fantastic creations of crazy inventors
  352. test the parts independently
  353. and characterize their output,
  354. then implement them again,
  355. and make them your own.
  356. technological sophistication has increased at a such a rate,
  357. few (if any) know the latest and greatest
  358. in scope or capability.
  359. bridging the gap between the unknown and known
  360. is a valuable ability worth paying for.
  361. after we know what the pieces are capable of
  362. we can speak of their abilities with familiarity and confidence
  363. “ I know that if we did X on our site, it would be so much better,”
  364. “ do you know how to do X? Can you do it for us?”
  365. “ Absolutely ,”
  366. you reply with a swagger.
  367. but Point One and a swagger only gets us half way there.
  368. Point Two is where the real brilliance shows up.
  369. after you know what these parts can do
  370. its your opportunity to find the problems they fix.
  371. “ I know that if we did X for your company, it would be great,”
  372. “ and it would make you Y dollars,”
  373. “ all it takes is for you to sign here…”
  374. anticipating the needs of your clients
  375. and delivering on them
  376. because you understand their business
  377. can create profound loyalty
  378. (and revenue)
  379. there’s no need to seek new Web 2.0 dragons to slay
  380. when there are plenty of yaks to be shaved right nearby.
  381. and remember,
  382. because a lot of these technologies
  383. came from the creative minds of people with no money
  384. they often solve problems in uniquely cost effective ways.
  385. not only do the latest gadgets add the shiny-shiny to your site,
  386. there’s also the opportunity for massive return on investment.
  387. so to the web(!) my ladies and gentlemen,
  388. start accepting those vampire invites,
  389. (but only to dissect them)
  390. voting on that news,
  391. (to see if you can game the algorithm)
  392. and sign up for a Twitter account,
  393. so you can “Tweet” and not feel funny about it.
  394. the world awaits,
  395. and some of them have the cash to distribute,
  396. if you can make them more.
  397. Thank you for attending, (especially after lunch)
  398. my best of luck in attacking points One and Two,
  399. and I hope you create some fantastic money-making machines in the process.
  400. The End.
  401. Rolf Skyberg Disruptive Innovation, Team Lead [email_address] twitter: @rolfsky
  402. Thank you to: Lawrence Lessig, for the presentation style Dick Hardt, for the inspiration Inkscape, for a wonderful vector graphics tool my lovely wife and you, (yes you), for coming
  403. Slide #
  404. Rolf Skyberg [email_address] Share, reuse, and remix this talk These slides are available under the Creative Commons Attribution-Noncommercial-Share Alike 3.0 License.