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Web2.0: Why we got here and what's next

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What is Web 2.0 and why are we so excited by it? How should it affect business decisions?

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Web2.0: Why we got here and what's next

  1. Web 2.0: Why we got here, and what’s next Rolf Skyberg [email_address] Disruptive Innovator for eBay, Inc. Wednesday, May 27, 2009
  2. my job title at eBay is both fun, and confusing
  3. the role of “Disruptive Innovator”
  4. is part Product Manager, part evangelist,
  5. sometimes developer,
  6. and always watcher .
  7. my main job is to inspire and excite individuals both inside and outside eBay
  8. by any means necessary.
  9. a little history about myself:
  10. my University major was business,
  11. but I also minored in theatre
  12. and later pursued graduate studies in System Science
  13. “ System Science” is the study of complex interactions over time,
  14. including topics like: computer networks, economics, traffic flow and human actions.
  15. this morning I will be talking about:
  16. people,
  17. ploughs,
  18. power,
  19. horses,
  20. dishwashers,
  21. France,
  22. bears,
  23. beers,
  24. windmills,
  25. and maybe the internet.
  26. (actually, the bears are just a joke)
  27. this is in fact, a bear-free presentation.
  28. and because there are no bears,
  29. let’s start with windmills .
  30. when I say “windmill”,
  31. most people think about:
  32.  
  33. but I’m not talking about Dutch windmills
  34. I’m talking about:
  35.  
  36. much as Dutch windmills opened up new land
  37. by removing water,
  38. American windmills were a critical part of settling the “ Great American Desert ”
  39. by adding water.
  40. “ Oh, you’ve never heard of the Great American Desert? ”
  41. much of the American west was purchased from France
  42. by President Jefferson in 1803 as part of the Louisiana Purchase,
  43. essentially sight-unseen.
  44.  
  45. ?
  46. seeking to explore this land and encourage settlement,
  47. the federal government dispatched a mission of exploration in 1819
  48. which surveyed the land for a total of 4 years.
  49. in 1821, Stephen Long published journals including this map:
  50.  
  51. on which he added the cautionary text:
  52. “ frequented by roving bands of indians who have no fixed place of residence, but roam from place to place in search of game ”
  53. his annotation was associated with an area he called the “ Great Desert”
  54.  
  55. it wasn’t a desert like the Sahara desert,
  56. but it was extremely harsh.
  57. for the first settlers
  58. coming from the wet, hilly Atlantic coast,
  59. lands West of the Mississippi
  60. appeared to be hostile to settlement and farming.
  61. Long’s description discouraged settlers
  62. and the reality of what was in the West didn’t help either:
  63. no trees,
  64. no water,
  65. soil you couldn’t plow because of thick native grasses,
  66. and far away from civilization and transportation.
  67. the first issue was solved by a technical pioneer:
  68.  
  69. the ploughs designed for the sandy soil of the East
  70. were entirely useless in the thick clay soil of the West,
  71. so he invented (and became rich from)
  72. the steel plough
  73. but even though you could plough the soil,
  74. you still couldn’t grow anything
  75. because there wasn’t enough rain.
  76. Daniel Halladay solved this problem in 1854
  77. with his autonomous wind-pump
  78.  
  79. these pumps tapped a huge underground water source
  80. just a hundred meters below ground
  81. called the “Ogallala Aquifer”.
  82.  
  83. prospects started looking better,
  84. but the West was still a desolate, lonely place.
  85. even if you could grow enough grain to sell at a market, there was no way to get it there
  86. the final step in settling the west came in the form
  87. of a trans-continental railroad
  88.  
  89. completed in 1873, the railroad linked farms with markets
  90. finally making it possible for families to earn a living.
  91. this area is now known as The Great Plains,
  92. and is one of the most productive areas of farmland in the world.
  93. just a hundred meters below ground.
  94. European settlement of the west
  95. happened only because it was enabled by a series of technologies.
  96. working together, windmills, steel ploughs, and train transport
  97. enabled settlers to enter an environment entirely new and different,
  98. and created the movement we call “settling the west”.
  99. Web 2.0 is the same pattern.
  100. western settlement wasn’t a “thing”, it was an era .
  101. Web 2.0 also isn’t a “thing”, but a t ime.
  102. Web 2.0 is the time when many events,
  103. both technological and social
  104. have converged to create apparently boundless opportunity.
  105. “ But if it’s not a thing, why all the excitement?”
  106. let’s look at how people think,
  107. how about a graph?
  108. TIME
  109. TIME now we need something on this graph
  110. what we can do what we can’t do TIME
  111. what we can do what we can’t do TIME “ our expectations”
  112. “ inflections in expectation”
  113. as our expectations exceed what a product can deliver, we lower our expectations over time
  114. of course, products are always improving
  115. and our expectations rise again
  116. when we see “ something new”
  117. these are “ inflections of expectation”
  118. of course, in our excitement, we forget this portion of the graph
  119. so when we see this part of the graph
  120. we go here
  121. but remember this part of the pattern?
  122. because we’re really going here
  123. ? and what’s this space here?
  124. the bubble
  125. “ Are you telling me that, Web 2.0 is all fluff and bubble then?”
  126. no, absolutely not,
  127. but who is telling you it is important?
  128. marketers and pundits?
  129. bloggers?
  130. analysts?
  131. beware of anyone who claims they can “do” Web 2.0 for your business.
  132. the rules of business have not changed
  133. the most important thing you can do is serve your customers well.
  134. if you feel you must embrace Web 2.0,
  135. approach each new technology as you would any other for your business
  136. carefully consider the reasons for implementing it,
  137. and the value payback.
  138. however, it may be likely that you do not have the expertise
  139. to know what is “best” for your customers in this regard.
  140. “ And how will I know what is best for my customers?”
  141. here are two simple things you can do to make your customers love you:
  142. (get our your pencils)
  143. 1 ) give them what they need
  144. 2 ) don’t steal from them
  145. to understand what they need,
  146. let’s look at some similar patterns:
  147. Tom Standage
  148.  
  149. 200 years ago
  150.  
  151. Claude & Ignace Chappe
  152. built a network
  153. transmitting
  154. military & governmental information
  155. their system
  156. optical telegraph
  157. (556 nodes)
  158. (4,800 kilometres)
  159. swinging arms
  160.  
  161. “ telegraph”
  162. “ far writer”
  163. fast!
  164. indeed,
  165. fast-er
  166.  
  167. s l o w
  168. 2 words per minute.
  169. the concept behind optical telegraphy
  170. laid the groundwork
  171.  
  172. Samuel Morse ... .- -- ..- . .-.. / -- --- .-. ... .
  173. initially used by railway lines & government
  174. also commercialized
  175. private entrepreneurs
  176. speculated
  177. business people would be willing to pay
  178. for this rapid communication
  179. so they launched
  180. pay-per-word services
  181. [only] businesses
  182. high cost per message
  183. nonetheless:
  184. expanded
  185. interesting thing happened:
  186. some people
  187. free,
  188. un-metered access:
  189. the operators.
  190. young,
  191. talented,
  192. very bored.
  193. when you don’t have to pay…
  194. jokes
  195. stories
  196.  
  197. friends, court, marry.
  198. we start to see a progression of human priorities:
  199. (1) support your military
  200. (11) make a dollar
  201. (111) “chat”
  202. we see the same pattern,
  203. with telegraph’s successor:
  204. radio
  205. rich history in the story of radio,
  206. but we’ll start at:
  207. 1944
  208. Motorola “Handie Talkie”
  209. infantry field radio
  210.  
  211. after the war,
  212. business saw the value of wireless connectivity
  213. commercialized the technology
  214. built a cellular network
  215. 1984
  216. Motorola “ DynaTAC” 8 000 X
  217. “ the brick”
  218. pitched at the business market,
  219. pretty much its only market,
  220. with a $4000 price tag
  221. 21 years later…
  222. Motorola RAZR
  223. in pink, commonly sported by adolescent girls
  224. for almost entirely social purposes.
  225. if we trace the priorities again,
  226. 1. fear money initially funds a technology
  227. 2. business money expands the network
  228. 3 . the network is adopted for social needs
  229. in simpler terms,
  230. the order of the market’s priorities seem to be:
  231. 1. safety
  232. 2. prosperity
  233. 3. socialization.
  234. luckily, we’ve seen this pattern before
  235. “ Maslow’s Hierarchy of Needs”
  236. Abraham Maslow
  237. his paper: “A Theory of Human Motivation”
  238. 1943
  239. model
  240. describes the needs, wants, desires of individuals.
  241. the model itself:
  242. “ levels” or tiers
  243. survival
  244. security
  245. belonging
  246. esteem
  247. enlightenment.
  248. lower levels supersede upper levels
  249. for example:
  250. you wouldn’t want to
  251. be social belonging
  252. security losing your job
  253. similarly,
  254. you probably wouldn’t care
  255. security drop your wallet
  256. survival chased by wolves
  257. the tiered system enforces an “order” to priorities.
  258. markets as a whole,
  259. follow this same hierarchy.
  260. if we look at a market
  261.  
  262.  
  263. market == collection of individuals
  264. each individuals’ actions
  265. combine to create
  266. “ market pressure”
  267. markets act like the individuals in that market.
  268. we see the same pattern in the
  269. Internet
  270. first, something everybody can agree upon
  271. Web 0 .0 (ARPANET) defense
  272. protects everybody’s basest level of needs
  273. now that we all feel like we’ll survive,
  274. “ ensure our future, make a buck”
  275. commerce Web 1 .0
  276. Web 1.0 focused on selling things,
  277. because things are easy to count
  278. and therefore easy to prove profit-margins on.
  279. lastly
  280. “ individual needs”
  281. social beings Web 2 .0
  282. “ What I’m hearing, is that I should build a social network?”
  283. yes and no.
  284. actually, please don’t.
  285. there are much better things that you can spend your money on.
  286. highly successful businesses understand this hiearchy
  287. and use it for profit.
  288. remember, these priorities are innate to all humans,
  289. so these motivations apply both online and offline.
  290. for example:
  291. (here’s the audience participation time) (test your global business knowledge)
  292. what thing?
  293.  
  294. all sell,
  295. not related to their core business?
  296.  
  297. hot dogs.
  298. why?
  299. because they want you to participate
  300. commerce shop
  301. but as a human you still need to fulfil
  302. survival eat
  303. two at once:
  304. survival eat commerce shop
  305. “ profit!”
  306.  
  307. “ rounding error”
  308.  
  309. considering human needs
  310. increases business
  311. by enabling their users
  312. to focus on their product.
  313. now that we’ve understand the model
  314. let’s look at:
  315. How to use this model (for fun and profit)
  316. going back to MySpace for a second,
  317. the model helps us frame some “miraculous” things we’ve seen.
  318. while at the Web 2.0 Expo, I overheard:
  319. “ MySpace --- and who would have guessed that would take off? ”
  320. now, for their target market,
  321. putting food on the table and paying the mortgage aren’t the most important things,
  322. so they have a lot of time and energy,
  323. to focus on these two needs,
  324. higher on the pyramid
  325. be social be myself MySpace sweet spot
  326. we’re surprised that teens are drawn to a place where they can:
  327. listen to music
  328. talk loudly
  329. and express themselves without parental supervision?
  330. we had MySpace before,
  331. but it was called “the ice cream parlor”
  332. or the arcade,
  333. or “down by the river”
  334. or the hayloft .
  335. even as adults, we seek places where we can
  336. talk loudly, listen to music, and possibly act like a fool
  337. we call this “ the pub”
  338. if you don’t believe in the possibilities of this business model,
  339. consider the “ Ye Old Trip to Jerusalem”
  340.  
  341. since 1189.
  342. I encourage you to look beyond
  343. how you currently serve your public
  344. and deliver on products which address their whole human,
  345. above and below the commerce levels if possible.
  346. I should warn you,
  347. the pyramid has strong influences that are not to be ignored
  348. at even the most fundamental product level
  349. an example from eBay’s own experience
  350. “ eBay Blogs”
  351. we thought we were building:
  352. esteem expression be myself
  353. so let’s look at a typical blog entry from last night:
  354. “ 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 ”
  355. >*o*<
  356. and the “ blog comments” on that entry?
  357. <ul><li>good night </li></ul><ul><li>SWEET DREAMS </li></ul><ul><li>Nite - new banner - nice - sleep well dear - catch ya sometime tomorrow. </li></ul><ul><li>Good night dd. Have a nice day at work tomorrow. </li></ul><ul><li>Have a good night! </li></ul><ul><li>Nite! </li></ul><ul><li>Good Night </li></ul>
  358. [not] eBay Blogs
  359. eBay chat.
  360. eBay chat. a very terrible
  361. unfulfilled
  362. belonging social beings be social
  363. new tool?
  364. my needs.
  365. If all you have is a hammer, everything looks like a nail.
  366. we gave them a screwdriver,
  367. which is found to be a poor hammer
  368. (but that’s not going to stop anybody from pounding nails with it).
  369. “ But didn’t you say something about not stealing?”
  370. yes.
  371. don’t steal,
  372. nobody likes a thief,
  373. and they will only put up with it as long as they have no alternative.
  374. but all businesses “steal”,
  375. so the business that steals the least, wins .
  376. in the hierarchy model,
  377. as tiers increase, expendable resources decrease
  378. because total resources are finite.
  379. illustration
  380.  
  381. ten below zero
  382. eleven at night
  383. $65
  384. hotel: $55 dinner: $5 the movie channel: $10
  385. survival security belonging esteem enlightenment $55 + $5 for lodging and food
  386. survival security belonging esteem enlightenment all our money spent right here
  387. the more energy our members waste in finding the basics,
  388. such as
  389. help
  390. search
  391. login
  392. submit
  393. and “ contact us ”,
  394. the less energy they have to actually enjoy your product.
  395. and if you don’t want them spending their precious time there
  396. make it so they never need to ask for help.
  397. because making them work to use your site
  398. is stealing their time
  399. and flushing it down the toilet.
  400. they don’t like their time wasted,
  401. and it’s not making you any money.
  402. make products that delight and empower your users.
  403. your members will continue to be humans
  404. and human needs aren’t changing
  405. so success will go to the products,
  406. that fulfills the most needs,
  407. with the least amount of waste
  408. waste =
  409. “ anything which doesn’t delight or empower your users ”
  410. because anything else, you’re stealing their time
  411. you can only get by stealing for so long.
  412. now that I’ve given you some new tools,
  413. lets sum this all up by applying some of them
  414. New Ways of Looking at the World
  415. we should stop being fascinated
  416. that our phones and cars and toilets are ‘internet enabled’
  417. just like you’d never say,
  418. OMG, UR DISHWASHER RUNZ on ELECTR1CITY ??!!!
  419. the most successful of us
  420. will stop looking at the internet as Web X.Y ,
  421. but as a tool to help us cope with our inability
  422. to store, process, retrieve and transmit massive amounts of information
  423. with other humans not near me.
  424. without amplification, the human voice carries maybe 100 meters,
  425. since the dawn of time, humans have been looking for way to amplify that voice
  426. and the internet is the latest (fastest) version of that desire yet.
  427. but it is fundamentally no different than the letter, telephone or telegraph.
  428. another lesson from the pyramid,
  429. what about the social aspect of what you’re doing?
  430. imagine reading a book, but you couldn’t tell your friends about it
  431. imagine buying a house, but you couldn’t throw a party?
  432. the pyramid shows us that we are fundamentally social creatures
  433. the internet has the capability to provide rich interaction
  434. and where it makes sense, interweaving that social nature can dramatically add to our experience
  435. so here’s the tricky part:
  436. building a product is like building a house
  437.  
  438. water and electricity are useful things to nearly everybody
  439.  
  440. the skill lies in knowing what rooms need what
  441.  
  442.  
  443. and the last one (which is really more of a warning)
  444. it is important to temper hype with clear thinking,
  445. there will be many ill-conceived uses of recently “discovered” aspects of computing
  446. on the web, I’m talking about discoveries such as: AJAX social networking community filtering badges widgets RSS viral apps
  447. just because something works in one place, doesn’t mean it has a use every place
  448. consider an advertisement from 1909 during a similar “2.0” time of history:
  449. 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!
  450.  
  451. you know all about “ usability studies”
  452. but what about “ feasibility studies”?
  453. I’m sure the enhancement is technically feasible
  454. but will it survive in the market?
  455. McDonald’s knows how to setup a “restaurant”
  456. but before they build one,
  457. they study the streets, the demographics, the foot traffic, and their competitors.
  458. they do this because installing a business is a costly experiment,
  459. so they need it to stick around for awhile.
  460. ask yourself,
  461. am I investing in something that will last in the long run?
  462. luckily, there is an easy way to think of these things:
  463. “ does this make me laugh or help me out?”
  464. “ does this product directly address a basic human desire?”
  465. “ would this be useful to a villager in a developing nation?”
  466. to build tools, services and experiences which empower and delight your users and employees
  467. not only makes sense,
  468. it’s good for business.
  469. I believe:
  470. in “life, liberty and the pursuit of happiness…”
  471. and together,
  472. we can bring that spirit to everyone.
  473. The End.
  474. Rolf Skyberg [email_address] http://rolfskyberg.wordpress.com
  475. 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
  476. Slide #
  477. Rolf Skyberg [email_address] http://rolfskyberg.wordpress.com

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