Status update: the future of the web is here!

image taken from http://dressarchie.blogspot.com/2008/06/worst-blog-post-ever-no-not-this-one.html

We're all idiots

/rant on

I read a number of posts in the last week that seem unrelated but ended up making me think about this social media circus we are in. Unless you are deaf, blind, and have been sitting on a deserted island the past weeks you must have noticed the hype the media are now creating around Twitter. Respectable media like the NY Times are running Twitter stories almost on a daily basis. We now know how it was thought out, that investors think loads of money will be made on search, that they turned down an offer by Facebook, and especially that it is now going mainstream. We’ve had a few terrible accidents and disasters and Twitter users were able to beat “old-media” bringing the news. As a result every respectable reporter now turns to Twitter not only hoping to pick up some early scoops as well, but more importantly look really cool at the same time too. And don’t forget about real-time search on Twitter, the next Google killer (yeah right).

Personally, I think it is a load of crap. Twitter is currently flooded by people and organizations “playing the system”. Twitter has embraced the hailed network effect of web 2.0, and that is also it’s biggest tragedy. Twitter has become an eyeballs game, just like any other service that shows unhealthy growth. Twitter isn’t growing with twitter users, it is flooded with bots and spam playing with the weakness in the system and its management. Sorry , if management wanted, they could get rid of the spam and bot excesses easily. But since they are addicted to web 2.0 growth steroids there is no compelling reason to help users not get harassed by spam and bots. Why? Because removing it would also ensure that Twitter shows less growth than expected. Making the “mainstream” bubble pop. So instead of doing what is right for its users, Twitter not only lets bots and spam free but even plays its own game with handpicked suggested users for you to follow.

Then there was this post by the BBC in which they interview smart people from the industry that claim that social networks are the “new e-mail”.  Yes, they did call it e-mail 2.0, because that makes it sound even cooler. Digging into the article we find little treasures like one from the founder of Yammer:

Mr Sacks said: “What people want to do on social network these days is post status updates. We think it’s all people want to do.”

Paul Buchheit is quoted:

“I think it’s a new form of communication; not quite e-mail, more lightweight and more real time, often with little bit of a publishing flavour to it,” said Paul Buchheit, founder of FriendFeed, and the creator and lead developer of GMail, while at Google.

And there is this engineer from Facebook that takes it one step further:

Ari Steinberg, an engineering manager at the firm, told BBC News: “It’s been interesting to see the way people change the way they communicate. “You used to e-mail content to people and you had to choose who you wanted to e-mail it to and you didn’t know if your friends even wanted to see it. “Now you can passively put something out there and let people engage with it.”

Notice how each of them highlights their own service strength in these pearls of wisdom that provide insight into our future. Our online future seems to be driven by status updates and passively watching others interact with that. The growth of Facebook, is unprecedented, but as Ari tells us, it’s mostly about status updates. Research from the  Facebook data team suggests that we may have loads of friends on Facebook, we interact with only a few of them. The rest are passive relationships.

I’ve always wondered if my personal experience with Facebook is very different from others. There is the first excitement of joining, getting new (and old) friends. But after a while the excitement wears down and I’m left with a service I can’t get any value from, no matter how hard I try. I can’t explain it any better than this hilarious and ironic article written by Matt Labash in the weekly standard:

One by one, my non-joiner friends have succumbed. As one reluctantly joined the world of “poking” and getting “poked” by people he already talked to, people he had no interest in talking to, or people he didn’t know at all–all conducted under the suspect rubric of “friendship” so that they can look at each other’s photos and write dreary “status updates” on their “walls” (brief squibs about what you are doing at that exact moment, usually with emoticons and inappropriate quotation marks: “Matt Labash is wondering how long to marinate human flesh to get out that ‘gamey taste’ :-)”)–he was almost apologetic about it. Within two days of his birth on Facebook, he said, “I have 198 friends. I have never heard of most of them. This is so dorky, I hate myself for doing it.”

Being a true friend, I didn’t allay his guilt. I told him he was a very sad man, that collecting Facebook friends is the equivalent of being a catlady, collecting numerous Himalayans, which you have neither the time nor the inclination to feed. “You have obviously never been on Facebook,” he said. “It’s so much worse than collecting cats.” By this week, however, he’d lost all ironic distance. When I told him that he now took it all way too seriously, that I liked the old, conflicted him better, and that he should take a hard look at himself, he sloughed me off. He was now just another friend-whore: “I don’t need to look at myself. I have 614 Facebook friends to do the looking for me.”

We're a bunch of Chimpanzees

We're a bunch of Chimpanzees

A new generation is learning that the best the web has brought us is the status update. That friends are measured in terms of quantity, and that interaction can be done passively. We need pokens to connect (my brain just melted by this infantile invention). If that is the future of the web, then you can count me out. I spend the last week without any social media tools and concentrated on real-life relations in both my private and working life. There is no online experience that can remotely match those interactions. We are all sitting behind our screens like a bunch of dressed up monkeys, confusing status updates with real interactions, and failing to see the wonders of life as it passes by. It’s pathetic.

What is the root cause of this idiocy? I firmly believe it has to do with the way business models evolved on the web. When eyeballs, page views, CPM, unique visitors, traffic, and network became more important than individual users we took a wrong turn. We let the web evolve into into a big market place where “Advanced Ads Targeting Features” have become more important than individual value. The web has become a marketing play, instead of a place where we get real value when connecting online.

I’m with 37Signals here who openly wonder why the web lost faith into charging for stuff? Our online future is reduced to a status message and a million marketeers are making plans to exploit that nonsense. I can understand that. Marketeers can’t help it, they are just idiots. But to hear the Web finest entrepreneurs reduce the web’s future to status updates and refer to this as email 2.0 is more than idiocy. It’s mediocre. And it is scary to think that all our creativity, technological progress, and plain smartness has lead to this ultimate achievement of mankind.

It is time to end this madness and start charging people for the value that they get. Sure, you will lose eyeballs, traffic, status and all those other destructive measures the web currently brings us. But you will gain something too. You will get happy customers and you will deliver user value instead of network value. You will have fans instead of statistics. There are plenty of reasons to start today with a user centric, or user-driven business model. The question is, are you brave enough to deal with that possibility?

/rant off

Posted in business model, Facebook, Friendfeed, social interaction, social media, social networks, Uncategorized, web 2.0 | Tagged , , , , , , | 19 Comments

Why the real-time web isn’t important

I have been thinking a bit about this notion of a real-time web. Having access to real-time information, as soon as it is published, seems to be a possible Achilles heel for Google according to some (here and here). People who say that do not understand the real strength of Google or it’s possible innovator’s dilemma. But the question that interests me is the user value question. Does it provide us value to have access to information, the moment it gets published? The answer is that it isn’t nearly as important as something else (will get to that).

I guess there are cases where this can have value. An area that comes to mind is big events. The Obama inauguration, a plane crash, earth quakes, the super bowl final.

I’ve tried to use Twitter search and Friendfeed’s real-time options, and honestly, I find the experience mediocre. A bit of nuance might be in place here as we are only discovering the first potential of such services. However, I am trying to grasp what the specific real-time component adds to the experience. And I can’t put my finger on it. I can think of a few reasons why:

  1. Life doesn’t jump from one big event into the next one. When watching the Obama inauguration, seeing the Twitter community discussing and commenting it gave a sense of added value. The information added value to the experience at that moment. If I look for Obama on Twitter now I get an incredible amount of useless information. The context defines value. Currently is no context in which real-time search results on Obama now provide me much value. There are times when there is such a context, but most of the time life goes on.
  2. Immediate knowledge doesn’t always add value. If there is an earthquake in San Francisco (or anywhere else for that matter) we now see Tweets reporting in within seconds. But that information is only relevant if you are in it (you didn’t need a Tweet to tell you about it), you have people you know live in that area, or you need to know it for professional reasons (e.g a reporter). The randomness of the waterfall of information getting through makes it hard to understand what is really happening out there. A recent plane crash in Amsterdam appeared within a few minutes on Twitter. It gives people a reason to discuss it (terrible tragedy) at the coffee corner, but did it really provide value? Not unless you had a relative in that plane crash.
  3. Real-time information is hard to verify and trust. People are saying a lot of things on services like Twitter. Without context or understanding more about the people tweeting, it can be really difficult to understand the trustworthiness and accuracy of the information. You can already see the algorithms being drawn up that take reputation, reliability and trust into account, but this problem can’t be solved easily. Reputation, reliability and trust aren’t real -time characteristics. They take years to build. The only way these characteristics can be determined on information is for that information to be published, read, and responded to by large amounts of people. A blog post can build up trust, reputation and reliability if it has been exposed to readers, critics etc. But a tweet that appears in seconds doesn’t follow that process, no matter what the reputation of the person is that sends it out.

Does all of this means that the real-time web and search has no value. Off course not. Getting the news out fast is important, and it has caused many of he traditional media to get online to join this rat race. But in my opinion speed really isn’t the most important factor.

I do think that it becomes increasingly difficult to find information with enough relevance. There is just too much out there. Google can’t index the entire web fast enough, nor is it able to display the most relevant links in any particular situation. Aggregators, no matter what kind, tend to do a pretty poor job of aggregating relevant information timely for us (yes that includes Friendfeed, Digg, Reddit, and most of the major tech blogs). If you want to know more about that, then read this excellent post by Paul Graham who talks about his experiences with setting up and running the Hackernews community. Excellent read.

It seems we do a much better job at storing and retrieval of information that doesn’t lose value as time passes by. Encyclopedia’s, history, arts, dictionaries, etc. There are however some experiments that try to approach the problem of information organisation very differently. I’ve always been very font of the work that Jonathan Harris is doing this area. Check out his universe demo, and his “We feel fine” project. Seriously, give it a spin and then come back. I’ll hold.

Jonathan’s work proves to me that we haven’t reached the depth of possibilities to handle information. I’ve said this before, but if I were Google or anyone else interested in organising the world’s information, I would definitely get someone like Jonathan on board. His work actually makes me crave for more information. I can get lost in the universes he has created and I return frequently to dive in for some more.

The real-time web sounds cool, but right now it isn’t much more than another technical capability. I don’t really get passionate  about that. Instead I’d like to see what happens if we let non-tech people like Jonathan redefine the way we would be able to access information. I’d say we would find some more ground-breaking and relevant ways of information organisation and retrieval than the “real-time” web. I’d take this one step further and say that it isn’t relevant if published information gets indexed  and found in real-time. The only relevance we should be focusing on is getting the user the right information at the exact right time!

Posted in Friendfeed, Google, Jonathan Harris, real-time web, Twitter | Tagged , , , , , | 12 Comments

The network effect in web 2.0 is also its biggest tragedy

Side effects of using steroids

Side effects of using steroids

Robert Scoble, nicely served by his friend Loic Le Meur, started a discussion on Friendfeed in which he states that Twitter is broken and that unfollowing everyone might be the only solution. You can find it right here. The story got picked up immediately. Loic triggered this because he unfollowed everyone in Twitter and then build up a much smaller list of friends.  Loic has a good post up about his reasons for unfollowing everyone and starting with a clean slate.  Valid arguments and Loic states to have improved his Twitter experience tremendously.

I’m going to ignore thoughts about Robert and Loic following thousands of people themselves and using the strength of Twitter for their own needs as well. Following people by default leads to exposure to spam. I won’t discuss the topic of everything getting posted on 20 different places thus leading to a whole lot of duplication and pretty much useless aggregation. It is sufficient to say that this duplication increases the perceived growth of a service and it fuels our attention on size and growth.

Diving a bit deeper into what is going on leads to another discussion on Frienfeed, where we can read that Twitter itself is playing a questionable role in the way they have implemented a friend recommendation scheme. From that it seems that Twitter hasn’t put a lot of effort in getting rid of the bots populating the service right now. The underlying reason seems simple enough. Spam is profitable and the metrics we use to measure web service successes are flaky.

What are the most important external measures to determine the growth and success of web services? Things like traffic, page views, unique visitors, registered users. As a result, the more spam bots Twitter has in its network, the higher each of these measured variables. Getting rid of spam bots equals value destruction for them. Can you imagine a headline at the major tech blogs  stating Twitter traffic drops dramatically, only to find out this has happened because Twitter did its community a service by removing spammers. It’s not going to happen. And that is where Twitter and the rest of this web ecology are taking a wrong turn.

We're a bunch of Chimpanzees

We're a bunch of Chimpanzees

The constant pressure to perform towards the outside world, the Tech blogging community, investors, traditional media, is caused by this stupid growth rat race. Fueled by the initial successes of companies harnessing the network effect, we are now all drilled as a bunch of chimpanzees to measure the success of a web service by its millions of page views, visitors, registrations. Every month the major tech blogs give us the ‘Compete’ or ‘Comscore’ benchmark. Are you in or out? Who has the biggest …(you can fill that in yourself). You do not have millions of visits daily? Fail! Web 2.0 on steroids.

It is sick. I can’t think of a better way of expressing this. This whole rat race towards world domination is one of the worst aspects of the network effect. We like to think of the network effect in a positive way. A service gets better as more people use it. There is a major downside to it that we seem to ignore. The network effect causes the network to be more important than the users in it. It is more important to acquire and lock in new users than it is to keep existing users happy and satisfied. Users have become statistics in Google Analytics. Our performance dashboards for the valuation of companies do not include anything other than growth figures. Installations, registrations, page views, visitors, bounce rates, uninstalls etc.  And that sucks, big time.

I do not want to be reduced to a number, a statistical value. I want service providers to care about me. I want them to spend more time on keeping me satisfied in their service than spending time on getting more users in the network. I want large companies to act small and personal. I want the growth of a service to be truly organic, instead of getting ‘orchestrated’. I want investors and entrepreneurs to stop feeding web companies steroids to grow big. I want them to start holding companies accountable for generating revenues. I want people to stop caring too much about what TechhCrunch, Compete, Comscore or anyone else has to say about the growth of web services because it only keeps this rat race going. I want CEO’s and journalists/bloggers to start talking about customers instead of taking about the growth of their network (check a few interviews and you’ll see what I mean). I want the web to be the place where user value is more important  than network value.

I realize I am an idealist in many ways. I’m fine with that. But I have enough experience to know that focus on user value delivers the best type of business and revenues. All it takes is a bit of courage and to stop ‘competing’ on growth and world domination. Focus on users and give them the best experience you can deliver. If Twitter would be doing that these spam bots would be gone in days. But Twitter is trapped in this steroid growth race. So they won’t be doing that. See how this leads to wrong decisions? Value destruction instead of creation.

If you deliver user value, you can scale using the opportunites the web brings you. If your strategy is ‘growth first’, then user value can never be added later. And don’t think focus on user value can’t be combined with growth! There are enough good examples of that. Amazon can do it. And so can you.

The praised network effect is also web 2.o’s  biggest tragedy.

Posted in business model, Robert Scoble, Twitter, web 2.0 | Tagged , , , , | 18 Comments

Demystifying Social Media for companies

What does it take to be a great Social Media Expert (GSME)? Let’s look at a few basic characteristics. The GSME is someone that knows his grand mothers pearls of wisdom and re-uses them to his advantage on daily basis. He will swing quotes at you that summarize what social media is about. Brilliant nuggets of wisdom that seem appropriate in this confusing age of  web interaction:

  • “Give, and ye shall receive”
  • “Failure is the stepping stone for success”
  • “If at first you don’t succeed, try, try again”
  • “Give respect, take respect”
  • “The best things in life are free”

The GSME will tell you and your company that the key to a Social Media enabled marketing campaign is to leverage all thinkable social media channels. Exposing your brand out there, making sure people take notice. Joining the conversation. Get yourself on Twitter, create a Facebook page. If you are part of a bit of a geeky company then make sure you are on Friendfeed too. Start creating video messages. Post them on YouTube. Viral is the key to growth. Start blogging.

The GSME will have blazing fast, shiny, visual powerpoint slides to back up that story. More than 1 Bn people on the web, 160M potential customers on Facebook, Twitter, the new conversational tool (“Even Stephen Fry is on it! Who?”), Millions of people will watch and share your video on YouTube, half of the web is blogging, the other half reads it. Everyone older than 2.5 yrs old has a mobile phone these days, most even two. Calling is out, SMS and web browsing are in. It’s on big global conversation out there, and your company needs to be part of that.

You might feel overwhelmed, energized, seeing new opportunities to get you brand out there. But as a newbie you don’t know where to start. You may want to ask the GSME to help you out. After all, he is the expert and he can set out the winning strategy for you and your company.

Sound familiar? I’ve seen many of these GSME’s and heard many of their stories. And while the story gets better every day I feel that many of them do not have a clue how to leverage the power of social media. Let’s see a few examples where Social Media gets you nowhere:

  1. Brand exposure: In essence Social Media brings us new channels for brand exposure. It sounds great to build up a prescence in each of these channels. It is cheap and convenient. There are no costs involved to start Twittering or building a Facebook fan page. The GSME tends to forget to mention that brand exposure in itself provides community users no value whatsoever (unless you are a pop band and have fans ;-) ). Your brand will be out there, but no one will be paying attention to it.
  2. Getting your message out there: With all these great social media channels you can now reach out to millions of potential customers. The GSME fails to mention that you can send for free, but there is no guarantee that anyone wil listen.
  3. Going viral: We all know the examples of video’s at YouTube going viral. Attracting the attention of millions of users. The GSME knows how to ‘play’ the system. Getting traction and making sure the video gets picked up and launched into the huge community. The GSME fails to mention that the current online generation has seen thousands of these attempts pass by. They may watch but the impact it has on their life is about as big as  a huge advertisement in a newspaper or on TV. It gets ignored. A great side effect is that if your video is isn’t up to the standards, users will thank you for it by creating brilliant parody video’s exposing your brand and message to the fury of the community. Hey, any exposure is good exposure, right?
  4. Start blogging. Open a WordPress account and start writing. Before you know it people will subscribe to your feed and you will have yet another way to be in touch with your customers. And since you are a busy person, we might as well get a PR agency to write posts for you. And let corporate communication will be in charge of that. The problem with that is of course that people will immediately sense who is actually writing. And if it isn’t genuine there won’t be anyone reading it.

The point is that getting involve in Social Media isn’t simple at all. It’s easy to get deceived by the low entrance barrier. But setting up free accounts isn’t the hard part of Social Media. If you want to be part of Social Media you first need to acknowledge what it is. It’s all about interaction. Or, as Chris Brogan writes nicely, web 2.0 is a 2-way web. Being there is isn’t good enough. Exposing your brand isn’t either. You are not acknowledging the 2-way channel.

Playing the system, getting people to write for you, these are all tactics that sound great but simply don’t provide you or your potential customers any value. The technology may have changed, human behavior hasn’t. People don’t accept it if you ‘play’ them. If anything the technology has enabled transparency, enabling people to figure out fast enough if you are genuine or not. if you really want to be part of the conversation then there is only one way to do it. Join in and accept the consequences.

It means adding value without expecting direct return. Being there every day. Getting the employees of your company to start interacting too, without a big corporate manual telling them what to do. Getting your management to empower their team to interact. It involves making a big company look and act small again. It means adding value to conversation, to communities and not directly linking that to your product or brand. You need to bring your expertise into the interaction to help people forward.And if you are willing to put the effort in, and willing to do that for a long time, then social media might pay off. Social media is more about giving than receiving. Don’t listen to GSME’s giving you advice. Heck, don’t listen to me neither.  Getting into Social Media is hard work, and you’ll have to be willing to put the effort in.

Turns out my grandmother was right after all!

Posted in social media, Uncategorized | Tagged , | 7 Comments

On Google’s Innovator’s Dilemma

Every once in a while a new product or service appears that is immediately labeled as the new ‘Google’ killer. Usually by the major tech blogs who need to say something smart to get the traffic going to their site. Sometimes by the product company itself who might think that that any publicity is good publicity. I rarely read those posts. The idea itself makes me smile a bit as I personally believe that anyone boasting about such a possibility  rarely really understands the nature of the power that Google has build up in the past years.

The nature of the strength of Google can be derived from their mission  “to organize the world’s information and make it universally accessible and useful”

The first thing that comes to mind when reading that is their audacity to think beyond reasonable boundaries. Google doesn’t want to organise a specific set of information, they want to organise all information. I do not know a single company that publicly dares to think this big. The consequence of dreaming this big is that you have to act upon in. And that brings us to another strength of Google. If you wan tot organise the world’s information you need unprecedented data storage and manipulation capabilities.

Many people will recall the search engine when thinking about Google. Others might think about Google maps, GMail, Google Earth,  Adwords, or other remarkable services Google provides. I tend to think about the infrastructure that is needed to accomplish the daunting task of organizing all of our worlds information. The infrastructure of Google i s as immense as their mission. They own huge server parks, run some of the largest infrastructures in the world and own probably the largest and most important glass fiber backbone infrastructures in the world. It is nearly impossible for a piece of data traveling the world not to pass Google infrastructure. And they are extending their reach into all networks, including the mobile network.

Imagine the sheer computational capabilities, the ability to store endless amounts of data, the ability to transport unlimited amounts of data, and you are slowly getting the picture that competing with Google isn’t about a product or a service. You are competing with bricks and mortar, with iron, and motherboards, with glass fiber and server parks. The investments needed to overcome that are beyond any ones reach at this moment.

Does that mean that Google can’t be beaten? I doubt it. History learns that all empires that rise up at some point will come down again. But what is Google’s Innovator’s dilemma? Where will a disruption come from that can overthrow what Google brings on the table right now? I honestly don’t know. But with their ability to diversify, their incredible computational power and infrastructure, their current money generating platforms it has to be something that hurts them in their core. Forget about individual services, walled gardens, huge traffic drivers like Facebook or MySpace. Google’s walled garden is the entire planet. Who has the audacity to think big enough and overthrow that?

Posted in business model, Google, Innovator's dilemma | Tagged , , | 2 Comments

The Facebook business model is the root cause of a lack of transparency

Mark Zuckerberg just announced that Facebook will revert back to the old terms of service as too many people complained about the new ones. I think it is a honorable that Facebook is retracting a pretty bad plan. It is also good to see that they are now engaging with their community about where to take this. In the post Mark states:

Going forward, we’ve decided to take a new approach towards developing our terms. We concluded that returning to our previous terms was the right thing for now. As I said yesterday, we think that a lot of the language in our terms is overly formal and protective so we don’t plan to leave it there for long.

More than 175 million people use Facebook. If it were a country, it would be the sixth most populated country in the world. Our terms aren’t just a document that protect our rights; it’s the governing document for how the service is used by everyone across the world. Given its importance, we need to make sure the terms reflect the principles and values of the people using the service.

Our next version will be a substantial revision from where we are now. It will reflect the principles I described yesterday around how people share and control their information, and it will be written clearly in language everyone can understand. Since this will be the governing document that we’ll all live by, Facebook users will have a lot of input in crafting these terms.

It’s a difficult thing to get right. Facebook has obligations to shareholders, advertisers, business partners, 3rd party application developers, the employees of the company, and yes, the user too. What makes the task even more daunting is that the Facebook business model (free, advertised based) forces them to leverage the size of the network, instead of monetizing on individual user value. It puts them in a balancing act where the advertisement capabilities need to outweigh the individual user rights in order to keep a decent revenue stream. In other words, the more freedom Faceook has to use the data coming from user profiles and interactions, the more capabilities they have to create revenues.

Why do people sign up for Facebook? I suspect in most cases to have a good time and connect with friends. They do not want or need advertisement. It’s a distraction from the core value they wish to receive from Facebook. At the same time, you can’t provide 175M people a free service without some way of creating revenues (although it remains to be seen if advertisement is going to create enough revenues). The problem is that most people are not aware of this and Facebook is not providing the transparency to make sure people are taking a conscious decision when they sign up for the service.

If anything, it is this lack of transparency that should be solved first. The TOS is only one aspect of that. When you sign up for Facebook it should be clear how the service is making money. It should be clear that when you start adding friends, interact, upload content, etc. that all these actions are monitored and stored. It should be clear that even when you are setting privacy controls to a high level it only affects other users, but that it doesn’t protect you or your interactions from Facebook. It should also be clear what Facebook does with 3rd party developers, advertisers and other companies that use the Facebook ecology to create businesses or revenues themselves. And when all of that is clear, then a user can take a conscious decision whether all of that is ok or not.

That is the dillema Mark faces. How are you going to educate 175M people about your business model and all its effects? A User-Centric or User Driven business model would force you to do the right thing for the user, and as a result of this you create revenues. Facebook is forced to do the right thing for the company in order to protect its revenue streams. And that is a big difference.

Posted in advertisement trap, business model, Facebook, Mark Zuckerberg, privacy | Tagged , , , , | 5 Comments

Mark Zuckerberg is answering the wrong question, and we fell for it again

There has been quite a bit of uproar about Facebook changing their Terms of Service. Unfortunately, no one is asking the right question, thus letting Mark get away with answering the wrong one. The section that created this uproar reads:

You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising, each of (a) and (b) on or in connection with the Facebook Service or the promotion thereof. You represent and warrant that you have all rights and permissions to grant the foregoing licenses.

In other word. Anything you publish on Facebook can be used by Facebook. TechMeme sees a large number of replies to this change and this forces Mark Zuckerberg to write a post explaining Facebook’s motives. He writes:

Our philosophy is that people own their information and control who they share it with. When a person shares information on Facebook, they first need to grant Facebook a license to use that information so that we can show it to the other people they’ve asked us to share it with. Without this license, we couldn’t help people share that information.

[stuff deleted…]

Still, the interesting thing about this change in our terms is that it highlights the importance of these issues and their complexity. People want full ownership and control of their information so they can turn off access to it at any time. At the same time, people also want to be able to bring the information others have shared with them—like email addresses, phone numbers, photos and so on—to other services and grant those services access to those people’s information. These two positions are at odds with each other. There is no system today that enables me to share my email address with you and then simultaneously lets me control who you share it with and also lets you control what services you share it with.

Mark tries to explain the complexity that arises when users start sharing information. He explains that this TOS change is needed to allow users to have access to shared information , even when the original sender/sharer has deleted his or her account. In other words, if I share a photo with you, and I decide to delete my account, should you then not have access to that photo anymore?

While Mark does a good job explaining this process and it’s complexities I cannot help but feel that the blogging community has let Mark get away with answering the wrong question. He has done a perfect job in avoiding a much more important privacy issue than the issue that arises when two people share information via Facebook.

The questions Mark should have answered are the following:

What exactly does Facebook do with all the user data has been collected on Facebook, and how exactly does it monetize that, even after a user has deleted his or her account?

I could care less about the information I share with others via Facebook. That sharing process is a conscious act. I know that if I share that whatever gets shared is out of my control.  What I do not know is what Facebook does with that information. Why do they tap into all of my interactions and my data? What do they store, and how do they monetize that exactly? If I set my privacy settings as strict as possible do they still see everything? How is that data being used outside of Facebook? Do 3rd parties get access to that information as well, even if I do not want them too?

The problem at hand isn’t users sharing things on Facebook. It isn’t even controlling privacy on Facebook. The problem is that I do not have a clue or option to protect myself from Facebook. Any service that monetizes user data and interactions indirectly using a free but advertisement business model puts the value of the network in front of the value of the individual user. You get a free service, but you do not know exactly what you are giving up for that. And that is what Mark should be explaining. The rest is just a decoy so that the really difficult questions do not need to be answered.

I might not even mind that Facebook monetizes my user data, my friends, and my interactions. But right now, I don’t know how Facebook uses that data.We might think that our online lives are not connected to our real lives. We might even think that privacy is dead. But the problem is not that privacy is dead, but that it is distributed unevenly. In other words, the user is forced into total transparency when signing up for services like Facebook. But the service itself lacks transparency. There is no way we are going to find out what Facebook does with us. And it is this unbalanced relationship that we should be worried about. Mark Zukcerberg does a great job answering the wrong question, and we all fell for it again.

Posted in advertisement, business model, Facebook, Mark Zuckerberg, privacy | Tagged , , , , | 23 Comments

Are you enslaved by your mobile device? Take this test!

We are all becoming slaves of our communication habits. With our mobile devices as the new high priests, we hail the prayer of information and we are bonded by blackberry and iPhone. You do not recognize yourself in this description?

Take this small test to see if you have become a slave to your mobile device:

  • Do you never leave home without your mobile device? Get uncomfortable when you do?
  • Are you holding your mobile device as soon as you have to wait longer than 30 seconds?
  • Do you look at your mobile device, even use it, while someone else is standing next to you and talking with you?
  • Do you check e-mail or messages every few minutes, even when there weren’t any the past few minutes?
  • Are you using it while you are watching TV, or worse, while talking with your husband/wife/partner/friend?
  • Are you using it while sitting on the toilet? Ever dropped it there?
  • Do you turn it off, after the plane has taken off? Or even not turn it off at all?
  • Do you turn the device back on before you have even left the plane? Or landed?
  • Do you use it while talking with customers, business partners, family, friends?
  • Does your child have to wait to say something to you until you are done checking your e-mail?
  • Is your battery always empty, or are you always complaining about it?
  • Is your mobile phone lying next to you when you are in bed?

If you can answer 3 or more of these questions with “yes”  then I suspect you are enslaved by your mobile device. You will probably experience cold turkey shivers when you are separated from your device. You are also alienating yourself from those that stand with you trying to interact.

The problem with these devices is that they suck up all your attention. When you are looking at the screen, it takes away your ability to focus on anything else. Especially while using a touch screen. It is impossible to multitask. It makes you look arrogant and uninterested if you give your mobile device more attention than another human being standing next to you. We are addicted to real-time information. We take our high priest of information with us to dinner, parties, at a bar, work, home, on the street, while we are waiting, and even to our beds when we go to sleep. It is enslaving us each time we receive new information. We become information addicts, and feel we gain status when we handle the information beast in public.

It’s time to face this and start taking control of our lives again. Focus again on those things that really matter. Instead of messaging someone electronically, why not pay genuine attention to the person standing next to you? We might find that all this access to real-time information gives us a false sense of control. It doesn’t really make your life better, it just makes you more distant.

Me? I score 7 out of 12. I think I can still be saved, but it won’t be easy.  I’ve decided I’m going to get rid of my ridiculous behavior. How about you?

Posted in addiction, Blackberry, human behavior, iPhone, Mobile, social interaction | Tagged , , , , , | 5 Comments

Privacy is not dead, it is distributed unevenly

A famous oneliner from the CEO of Sun, Scott McNealy, in 2001 was “Privacy is dead, get over it”. It sounds true. This generation is growing up with Google, social networking, and having all relevant data on the web. We exchange private details of our live in order to receive service and value. We willingly share personal information in order to connect and interact with friends on the web. We are used to services exploiting our user data and don’t mind getting advertisement served in return.

The early adopter crowd jumps on every new social service inviting the rest to join in as well. In a Friendfeed discussion recently, Robert Scoble called privacy dead too. I responded by saying that that’s a stupid thing to say. Robert then explained what he meant. He exchanges privacy for service and gets value. I think that is a perfectly legitimate way of controlling privacy on the web.

Unfortunately, most do not understand the dangers of publishing or sharing personal information on the web. Nor do they know how to control this trade off Robert talks about. Privacy is currently diminished to privacy settings of Facebook. Not only are users not even aware of the availability of these settings, but they fail to realize that these settings do not protect them from Facebook. People don’t realize when they enter a zip code to find a restaurant, or look at the weather, they are giving away crucial information that can be used to determine an identity. Zip code, gender and birth date are often enough to figure out someones identity.
Most people are not aware that their Internet Service Provider has access to everything you do on the web. They know exactly which sites you visit and when. Your e-mail is available to your e-mail provider, unless you use encryption. Even openly deployed schemes, such as having to hand over private and personal information about yourself when signing up for a service like Facebook doesn’t make users worried.

Let’s look at 5 reasons why the sound byte “Privacy is dead, get over it” shouldn’t be taken for granted:

1. Financial theft
The most obvious problem related to a lack of privacy is theft. Credit card theft is big business. Spyware, malware, unprotected transactions on the web, phishing sites where you think you are signing up for a trusted serves that asks for a credit card nr, the possibilities are endless. It is relatively easy to get access to long lists of stolen credit card details. And once your credit card details are known it opens the door for fraudulent financial transactions. It sometimes takes months to figure this out yourself. I bet that everyone that reads my post knows a person that has been a victim of credit card fraud. It is a widespread thread.

2. Identity theft
Identity theft has become relatively simple on the web. We leave many traces of ourselves and our personal information behind on the web. Each piece of information in itself might not be harmful, but we tend to forget how easy it is to collect a much larger collection of personal information using Google, or for example a more personalized people search engine. For identity theft we really only need a few pieces of information. Birth date, gender, zip code. With any luck you can find out where a person lives, which college he went to, who he is married to etc.etc. The possibilities are endless. Chances are a person has published his mail somewhere on the web. Combining relevant personal information from that person his e-mail account can be hacked. And that same e-mail account is likely to be used for bank services. From identity theft we get back to financial theft and more.

3. Reputation
Our reputation in the old days was contained within the social relationships we were involved with. These relationships were naturally confined to locations, time and people we knew. On the web this has changed dramatically. Now everybody has access to personal information of anyone online. You do not have to meet someone to find out about him. Use Google or any other search engine to find out information about a person. You may argue that since you have nothing to hide there can be no harm done. But what if an insurance company sees that you love to skydive, or a photo of you smoking at a party? What if a company that you contacted for a job sees your old college photos where you and your friends were just having a good time? Or they see you having an online quibble with a friend and wonder about your ability to handle conflicts? Or notices that a blog post you wrote gets negative comments from (anonymous) readers? What if a bank investigates you on the web when you apply for a loan, only to find out that you haven’t been working at a job for more than 6 months in a row? Each of the pieces of information are totally harmless when places in one context, but are quite damaging to your reputation in another. Your reputation is now publicly searchable and without the context of a social environment you are acting in, this can lead to harmful situations.

4. Gossip
This is probably an unexpected danger when we build up an online profile. We are much more vulnerable to rumors and gossip. Where this used to remain within the social borders you moved in, they can now reach the entire online world. Anyone that wants to do you harm has a platform to (anonymously) start gossip and rumors about you. As your online reputation gets harmed you will find that it is extremely difficult to protect yourself from this.

5. Databases never forget
When we go online we leave traces everywhere. The site we visit, the things we search, the people we interact with, the transactions we perform. Everything is stored in databases. Often the information stored contains errors. There is no way for us to control what is being stored about us. But once stored, that information doesn’t disappear. And in most cases it doesn’t harm us. A friend of mine once was denied a loan because investigation showed that he was a bad debtor. It took him weeks to figure out that he once forgot too pay a bill of $10 for goods he bought online. He corrected his mistake, but nevertheless, the store had reported his behavior and it was stored away in a database that gets accessed when you apply for a loan. An example of how a small mistake can lead to considerable damage.

There are many more examples thinkable in which the public accessibility of personal information can lead to harm. We are so used to publicizing and sharing personal information that we simply can’t imagine the potential harm it can do us. Just because everyone shares personal information as if it has no value doesn’t mean we should accept that. Just because we all use Google and social networks doesn’t mean we should also accept that privacy is dead. Just because social networks let you sign up for free and encourage you to connect to as many people as possible doesn’t mean you shouldn’t be aware of the possible consequences.

I feel that one of he most dangerous aspects of the “Privacy is dead, get over it” sound byte is the unequal relationship between those that have power over those that do not. A government, take the United States as an example, demands full transparency and doesn’t accept privacy as a constitutional right. But these same rules do not apply to the government itself. It doesn’t provide us transparency. We do not know what the government is doing with our personal information. There is no way for us to gain insight.

The same thing holds for services on the web. In order to join a service we have to disclose personal details. Yet we are not allowed to see or know what that web service is actually doing with our personal data. We disclose personal information to receive value. But we do not have a clue what we are giving away and how it will be used at some point.

This is the fundamental flaw in privacy on the web. It isn’t dead, it is unevenly distributed. The powerful enforce full disclosure without disclosing anything themselves. And as long as this inequality exists we shouldn’t accept the mantra that “privacy is dead” but instead actively work on solutions to help users control their own privacy.

Posted in Facebook, Friendfeed, Google, privacy, Robert Scoble, web 2.0 | Tagged , , , , , | 6 Comments

It’s ok not to be a futurist

It doesn’t happen every day that someone tells me it is “ok” not to be a futurist, especially if that person is a Web celebrity. It happened to me today when Chris Brogan responded to a comment I wrote on his blog post about Google Lattitude (It felt a bit like a father tapping a child on the shoulder assuring him it’s ok ;-) ). My comment to him comes from a post I wrote yesterday called “Just because Google can track your friends doesn’t make it valuable”. Chris’s reaction  got me thinking about my own views about technology.

Chris is right of course. I’m not qualified to be a futurist. I’m not even qualified to be an early adopter. I’m not a breaking news blogger, but write from personal experience and observations. My strengths are within different fields ranging from technology to the human factor. I understand technology, I work for a great startup right now,  and I’ve spent a lot of my working life in what I call the “first use” of technology.

Based upon my own experiences, I have found that first use of new technology is always about 2 things: the human factor and the business model. Technology needs to work but it’s impact is often less important than the attention it gets from us geeks. Technology needs to work for its user, not the other way around. It needs to solve a problem, enable something, but mostly, it needs to be dead-simple (a criteria that is hardly ever met when a new service is launched). These views disqualify me from being an early adopter because I do not get overly excited over the technology itself. I get excited over the use of that technology in real life.

The business model is equally important. I care about User-Centric business models. The choice of a business model affects the value a user receives from a service. We tend to underestimate that importance. The best business models are those that create user value and monetize directly on that value. Why? Because it forces you to keep providing user value in order to guarantee revenue. The commonly used free advertisement based business model is an example where this is not the case (most of the times). In that business model the network value is more important than user value. As a result it forces you to focus on growth and customer lock-in, instead of user value and user freedom. Big difference imo.

Being a futurist is different. That is the area where you are allowed to dream. There isn’t a right or wrong, there is just imagination. Or as Chris puts it:

“One more thing: not everyone’s a futurist, and that’s okay. I make my money by figuring out the jump move instead of the obvious here and now.”

I am a dreamer, in many ways, but I think I disqualify from being a good futurist. Main reason for this is that I tend to look for questions instead of answers. I imagine all kinds of possibilities but I find that I am more fascinated by the questions that these future predictions provide. It is precisely for this reason I write.

Writing helps me understand the way things work. It isn’t about being right or wrong. To me it is more of an exploration. It helps me to write down my thoughts and shape them as people start reacting and responding. I hope that it makes people think. But I also feel that it will help me learn new things too. If you want to know what gets me excited then you can read about the Zen of my blogging.

I might sound negative about new technology and question it’s value. But for me these questions are what new technology should be about. I do not care about the technology itself. I care about its First Use. About the value it creates in our daily lives. The rest is just play.

Posted in Chris Brogan, early adopters, First Use, ZEN of blogging | Tagged , , , | 6 Comments

Just because Google can track your friends doesn’t make it valuable

I have an interest in new technology. I can get fascinated by the things it can bring us. I get even more enthusiastic when technology can be applied in daily life to improve things. At the same time I’m not a big fan of technology being pushed without intent. We need people to develop without intent other than curiosity or a desire to break barriers. I just get more excited with First Use. The First Use of a new technology isn’t defined by the technology itself. It is defined by the user who may or may not decide to incorporate this technology in his daily life. Breaking up existing patterns to build new ones. First Use is the crucial test for any technology. It answers the following question:

Is a user willing to put in the effort to learn about this new technology and incorporate it in his current habits?

The answer in any case is that willingness is related to either solving a problem or creating another type of value for the user. If this isn’t obvious from the start, then the user is not committed to put in the effort of integrating this technology into his life. Note that this isn’t necessarily related to design or usability or complexity. It helps if your development scores well on those factors. Bottom line however is whether or not the user conceives enough value to put the effort into it.

Early adopters tend to make the mistake that since they adopt quickly the rest of the world will follow. This is an entirely wrong assumption. They confuse passion for technology with the value being delivered by the new technology. There are lots of technologies developments that I love but rarely if ever use. These technologies simply do not pass my First Use experience.  For that very reason I do not consider myself an early adopter. I am interested in technology, but I am more fascinated by its use.

Answering the First Use question is something developers rarely address. It is a hard and painful process that draws away energy from the development process itself. It might even lead to the insight that there isn’t any value to be discovered making the technological effort useless. Not knowing the answer to First Use does not make any development useless. But not addressing the question makes the effort of development less effective. Sometimes you just have to let your users define the value of your developments. It’s a tactic used often by companies like Google (since they have near unlimited resources and capabilities to just try things out).

I was thinking about that when I saw the announcement of Google Lattitude, reviewed here by the WSJ. The idea of location based services is quite old, but combining it with a social aspect has revived the technology and now we see many examples of such services pop up. Chris Messina wrote a good post on this very topic, what if location was available everywhere?

Technology wise Google Lattitude looks great. In terms of First Use there are many questions that remain to be answered. If we move past the coolness factor (“Wow, I can see where Joe hangs out”) it becomes more difficult to envision using this in your daily life. Early adaptors will tell you it’s cool because yo get to see where your friends hang out and meet up easily. It will help you to get great retail discounts when you pass a store and are willing to tell them you are hanging out there. It is great to be able to automatically inform anyone willing to listen on your social networks where you are right now.  And so on.

I may be wrong, but not one of these advantages will overcome the barriers the technology brings right now to ask me to change my habits. In other words, there is no compelling reason for me to start using it. No problem is solved or real value created. Does that mean the technology is useless? Hard to say. This is a typical example where the market will decide if the technology has use. We will need to have an ecology of services in which location is used as one of the default inputs. One thing is for sure. Real revenues need to back up developments like this. Let’s hope we will not enter yet another free advertisement based ecology here. Instead focus on real user value and get users to pay for that. It will do the technology and the user value a lot of good. Otherwise this technology is bound to become yet another advertisement trap.

Posted in advertisement trap, First Use, Google Lattitude, Location Based Services | Tagged , , , | 8 Comments

5 reasons why a User-Centric business model always wins

A few posts drew my attention this weekend. first there was Chris Anderson talking about the economics of giving it away. It seems to me that Chris is changing his tone of voice in FREE. Whereas he often has focused on the zero cost distribution of FREE, he now talks about the revenue side of things. He notes that in a market where both venture capital and advertisement investments dry up startups need to make real money. This quote says it all:

What about those companies trying to build a business on the Web? In the old days (that would be until September of last year) the model was pretty simple. 1. Have a great idea. 2. Raise money to bring it to market, ideally free to reach the largest possible market. 3. If it proves popular, raise more money to scale it up. 4. Repeat until you’re bought by a bigger company.

Now steps 2 through 4 are no longer available. So Web startups are having to do the unthinkable: come up with a business model that brings in real money while they’re still young.

Fred Wilson follows up with a post about the need to not only look at revenues, but also at costs. He writes:

Chris goes on to suggest that Internet entrepreneurs are going to have to get people to step up and pay for something instead of just giving everything away for free because advertising isn’t going to foot the bill for every company. That may well be true and we are certainly thinking that way for most, if not all, of our portfolio companies. But Chris’s examples, particularly Facebook and Digg, are examples of companies that might benefit from looking at the cost side of the profit equation at some point (maybe not yet).

And then there is Facebook, with Mark Zuckerberg who feels he has found the pot of gold at the end of the rainbow. In an NY Times article, ironically entitled “Networking site cashes in on friends” we can read about his strategy:

Facebook is planning to exploit the vast amount of personal information it holds on its 150m members by creating one of the world’s largest market research databases.

In an attempt to finally monetise the social networking site, once valued at $15bn (£10.4bn), it will soon allow multinational companies to selectively target its members in order to research the appeal of new products. Companies will be able to pose questions to specially selected members based on such intimate details as whether they are single or married and even whether they are gay or straight.

I feel we may finally have reached a tipping point in thinking. While the FREE advertisement based business model might have given us lots of good things (free services), it comes with many downsides and basically holds web evolution back:

  1. It leads to focus on network value instead of user value. In other words, the network and growth are more important than providing individual users value
  2. It leads to walled gardens. If you have to make money with advertisement, and your business is not search, then it is imperative that you keep your customers locked in. The phrase locked in says it all. Instead of freedom we contain our users. Get him into the service and then never let him out.
  3. It leads to destination sites, instead of user centric services. For advertisement we need traffic and eyeballs. It is therefore important to get your users to gather together in one place.

I feel Facebook still isn’t convinced. They choose yet another indirect business model. Instead of focus on user value, they will now try to exploit user data towards brands. You get a service for free, but in return we sell you, your friends, and your data to other brands. Possibly the largest marketing database in the world. I’m not looking at any moral aspects of such a deal, but think about the inefficiency for a second. There is a clear misalignment between what the Facebook user perceives as value received from Facebook versus the value Facebook executives are trying to exploit. And it is this misalignment that makes it so hard for Facebook to make enough revenues. They have huge operational costs with servers and a large organisation. And they can’t back that with advertisement money. My prediction is that it will be quite hard to monetize the user database the way they are thinking about it now. The reason for this remains simple. A Facebook user is there because of interaction with friends. That’s it. Having a good time online doesn’t match any advertisement or marketing goal. If they want to pull this off, they better start lowering their operational costs big time.

I believe a User Centric business model is more powerful in the end. Focus on user value and monetize that value. It is the simplest and clearest business model there is.  It is a model that comes with several advantages:

  1. With one specific variant, Freemium, you can use the best of FREE (near zero cost distribution) while at the same time monetize on user value
  2. You will be forced to keep your operational costs to a minimum as you do not want your customers to pay for the overhead you are creating to deliver value
  3. If your main focus is user value, you will build user centric services instead of network value services. Everyone will benefit from that. It will lead to open systems, cross platform integration and service oriented business.
  4. It forces you to constantly innovate your concept of user value. You want customers to stay with you because of the trust and value you provide, instead of locking them in.  As a result constant user centric innovation will keep competition out and your customer happy
  5. It is fun to engage with happy customers. Do not underestimate this aspect. I can still get very excited when I read the “300.000 paying customers of SmugMug”. SmugMug doesn’t really have customers, they have fans!

Let’s hope more services will follow that path. it will do the user and the web a lot of good. A User-Centric web is to prefer over any other type of network.

Posted in business model, Chris Anderson, Facebook, Fred Wilson, Freemium, user centric web | Tagged , , , , , | 7 Comments

On Apple, Facebook, Google, Whuffie and why customer lock-in sucks

What is the difference between customer lock-in and customer value It’s huge! Customer lock-in is a marketeers wet dream. It is a bonus received at the end of the year. It is an internally focused measurement. It is EGO. If your CEO, organization, or marketeer is talking about customer lock-in you can be sure of one thing. Making revenues is more important than bringing value to a customer.

Don’t get me wrong, every company has to make revenues. But think about this for a second. Which company would you rather work for, or buy products from? A company that is focused on revenue and sees customers as a byproduct of that revenue? Or a company that is focused on providing user value, and as a result of this earns a good living?

How to you reach a status of customer lock-in? You can’t accomplish that by serving the customer value. Instead you focus on the costs involved to move away from your service. If the cost of leaving the service are high enough, your customer will not attempt to leave. Too much hassle. Examples? We see lots of businesses attempting some form of customer lock-in. Try leaving a mobile operator and taking your mobile phone number with you. Leave an Internet access carrier and then try to keep your data or e-mail address. Try switching banks making sure your monthly payments are still in order. The list is endless.

The online space isn’t any different. Web 1.0 thinking is essentially customer lock-in thinking. Web 1.0 business models force customer lock-in. It is their oxygen. Without customer lock-in, no revenues. It is the reason web 2.0 isn’t really a revolution but simply an evolution. Examples? The most obvious one is Facebook. Once you sign up your soul is sold and leaving again is impossible. Actually, that is not entirely true. If you simply quit, your account will not be deleted. But if you really want to get out, start acting against the terms of service and they will wipe your account faster than the speed of light. Facebook is a black hole that sucks you, your friends, your interactions and data in, but never lets it out again. It is the perfect customer lock-in platform.

Another example? The Apple iPhone. Apple builds great products but dictates everyone how to use it. I have an iPhone but I couldn’t buy it from the mobile operator I have been happy with for years. Instead of offering me choice, Apple has decided to make it exclusively available via a select set of operators. The reason is simple, it isn’t about customer value, but revenues. While the iPhone itself may be a great and user-friendly product, the Apple strategy is a lock-in strategy. Forcing me to buy the phone and jail breaking it. Sorry Apple, I don’t give a toss about your exclusive strategy, I want choice! Google’s g-phone? Exactly the same issue. Not because of the way they will distribute it. But because it needs a Google account to be useful.

Customer lock-in is a lucrative business. Corporations have tons of marketeers employed to build their customer lock-in strategy. The funny thing about it is that if you would get rid of all that overhead (yes, marketeers are idiots), you would not only save a whole lot of money unwisely spend, but you would also have the chance to work on customer value. It would make your customer, your employees much happier. It would generate profit and build you a strong business with loyal customers. You would not need a “Social Media strategy”  to “engage” with your customers. You would not need “loyalty”  programs. Note that these two “social” strategies become customer lock-in tools if applied within a customer lock-in organization. You would not need Tara Hunt to explain to you what the Whuffie factor is, as it would be in your genes. Having said that, you’d be crazy not to hire ten Tara Hunts and turn your company around form customer lock-in to customer value. A company build on customer value would be doing these things naturally, well before any consultant has thought of a new Powerpoint title called “Social media”. It is funny to realize that great developers tend to understand this much better than any marketeer ever can. It’s because a great developer does not take revenues into account. He looks at customers first.

There are many reasons thinkable why customer lock-in is dominant in company strategy, but that is big enough in itself to write another post about. Sufficient to say that if your company is using social media consultants to enter this exciting new web 2.0 world, you are in deep trouble ;-)

Posted in Apple, business model, customer lock-in, Customer Value, Facebook, freedom, Google, social media, Uncategorized | Tagged , , , , , , | 1 Comment

Web 2.0 progress is held back by Web 1.0 business models

I’ve often wondered how web 2.0 is really different from web 1.0. Most seem to agree that web 2.0 was an evolution in which we went from portals and destination to data and interactions. Web 2.0 is about interaction, social media. Everyone connecting in one big network. Data is the currency. It’s all true and sounds great to me. But why do we then still have huge destination sites? Why is there still a battle over users, eyeballs and visitors? Why is Facebook essentially a vacuum service, sucking everything in, and letting nothing get out? Why does Techcrunch report Friendfeed has a million unique visitors? We mash data up, connect it everywhere, but still force people go somewhere to fetch it.

If you think about it, the sexiest services right now are nothing more than old fashioned destination sites with some conversation added to it. In terms of business models, nothing new there. Business wise it’s not web 2.0 but web 1.0++ in disguise. I believe that the main reason behind this is that, although technology wise we have innovated many aspects of the web and its services, our online business models haven’t evolved with this change.

Just to be sure, I’m not talking about the huge impact online business models had on offline business models (e.g. tradition print getting killed by online media). I’m talking about online business models that existed say 5-8 years ago, compared to the models used now. Essentially investors and web entrepreneurs seem to be web 1.0 thinkers. They think in terms of destinations, eyeballs, unique visitors, traffic, advertisement, CPC, CPM. All of these elements have been around in online business models for ages. Nothing new there.

As a result of this there is no fundamental revolution taking place, it is more of a logical evolution. A tiny step given the potential that is really out there. Don’t get me wrong. The way the web presents itself to us, and the endless possibilities for us to connect online, has changed our online experience considerably. The question remains though. What if business models would evolve with that technological and behavioral change? What if we would stop thinking in terms of advertisement display or cpm, and would focus on other value drivers? What if we would care less about keeping users sucked into a database, and set them free because you don’t need to hold on so tightly to make revenues? It is this ‘old school’ thinking that inhibits us from starting true revolutions. Technology wise we can revolutionize our experience on the web. Business wise we are held back and forced to take smaller steps.

One could argue it is because current web business models are perfect and need no change. But that seems  incorrect as many companies have problems creating sustainable revenues. My biggest concern however is that current (often advertised based) business models are in most cases network centric instead of user centric. By that I mean that the business model works when the network that is being exploited gets larger. As a result the company executing that business model is forced to think in network value. I prefer business models that focus on user value. It is the cleanest and simplest business model. It works out best for the user (as he gets most value), and the company (as they receive revenues based upon that user value).

But here is the catch. Since 99% of current business models are network based and most web investors and entrepreneurs are trained to think that way, we can’t easily make the switch to a user value business model. And because of that we are stuck in our own trap of web 1.0 business models and unable (yet) to unleash the full potential of our technological capabilities to create user value. We end up with more destination sites and customer lock in. Customer lock in fits really well, wouldn’t you agree?

There are counterexamples of companies that did make that switch (e.g. 37signals, smugmug) and generate sustainable revenues. But we need more leadership in this direction. We need investments that step away from current practice and take a more user-centric approach. It would set us all free and help us build a User-Centric web.

Posted in advertisement trap, business model, customer lock-in, on-line advertisement, user centric web, web 2.0 | Tagged , , , , | 20 Comments

It is naive to think our online lives are not connected to real-life

There seems to be a strange disconnect between our online and offline lives. Different rules, norms and values seem to apply. It is as if our online personality is not connected to our real life. We act differently and feel a sense of freedom online that seems to compensate for the restrains we might feel in real life. We are all actors in this massive online play and it allows us to do things we wouldn’t consider doing in real life.

Examples?

We wouldn’t allow anyone, not even the landlord you rent a house from, to put web cams in our houses and record every conversation inside the house “to make our experience better”. Yet we throw our privacy principles over board when we get online and join sites like Facebook or MySpace.

We wouldn’t show a stranger arriving at our doorstep our family photo album. Yet we publish and annotate these same photos online so that the whole world can view them.

We protect our children against danger in the real world. We supervise their first steps into the world.  We don’t let them talk or walk with strangers. We don’t let them bully others. Yet we let them get online unsupervised and unprotected, explore the web and social networking.

We do not divulge private matters concerning illness, lost jobs, winning the lottery, fights, love, etc. to strangers we bump into on the street, yet we disclose all of this online in social networks where half of the time we don’t even know who is listening in.

We wouldn’t tell complete strangers where exactly we live, when we are going on holiday or business trips (what if they rob us), yet you can find all of that information, and more, online.

In real life we have opinions, but we do not disclose these opinions everywhere. We might even be inhibited to do so as it might turn on you at some point in time.  Online we join every conversation and start opinionating immediately. And we forget it gets recorded and will never disappear again.

The people we call friends in the real world is limited. A friend is something different from an aqcuaintance. Online we have thousands of friends. You may argue these are not your real friends, but why then do we disclose so much about ourselves to these ‘friends’? Why do we spend so much time engaging with people we really don’t know?

We do not tell anyone about our bank accounts, our passport numbers, social security numbers or birth dates unless there is a real need to do so. Yet online we sign up for any service that pops up and disclose happily our e-mail addresses, passwords, birth dates etc. In most cases these turn out to be the exact same pieces of information we use for online banking and financial transactions. Every once in a while we get scared of phishing, but soon enough we forget about it again.

We don’t trust new insurance, banking, or telephone companies that tell us we can use a service for free if we allow them access to our private information, and listen in on our conversations.  Yet online we let social networks have access not only to our own profiles, our annotated baby pictures, our families and friends, but also to our interactions with all of them.  We allow all of that private data to be exploited commercially.

We protect our privacy and family in real life, yet we let social networks protect our privacy online? Who protects us then from them?

I could probably extend this list further and think of more disconnects between real life and online behavior. But the real question is, do we care enough about it to actually deal with it? The ability to connect and interact with anyone online has brought us a lot of freedom. It has many positive aspects to it. It has freed us from many real-life constraints. If you can afford to be part of this online experience you will find that it tends to level things. Everyone can be a pop star.

But I would like to urge you to think about this for a minute. As real-life and online behavior become more and more connected, entangled, you will find that it is less easy to separate them. Online and offline become the same life. While we see our online behavior as play now I doubt it will still be play in a few years. And yet we act as if these worlds are not connected. We disclose almost anything about ourselves online and do not think or understand the possible consequences in real-life. With viruses spreading across the world and a network of computers that spans the entire planet harm can be done in a split second. Where wars are still fought on the ground, they will also move into cyberspace. Where commercial exploitation of your private data now leads to display ads you can safely ignore, it might lead to less harmless forms of commercial activity in the future. Where your next job interview might now depend on your previously achieved results. In the near future it will depend on what a Google search result will reveal about you.

Am I being too negative about this? Maybe, considering current behavior in social media my views aren’t exactly popular. But I also firmly believe that we are formed and shaped by our own actions. My advice would be that you start acting online like you would do in real-life. Thinking these worlds are disconnected is naive.

Posted in human behavior, on-line advertisement, privacy, social media, social networks | Tagged , , , , , | 9 Comments

Warning: Life is colored by the information we absorb

A few weeks ago my 6 yr old son was sitting next to me while I was watching the news. I was a bit distracted and didn’t realize he was sitting there, but after a while he said something to me that made me turn off the TV. His words were “Daddy, why are there so many dead people on the news?”. He doesn’t watch the news very often, and we tend to not watch it when he is around. But even so, he noticed there is a lot of bad stuff in the news. Six years old, he should not be asking us this.

I was telling Ian Hayward about this (I’m with Ian in San Francisco). He told me that he had not watched the news in over 2 years. The reason for it is that he feels that we are all too influenced by the things reported to us. I thought about that for a while, and I tend to agree with him. We all know the feeling of going on a 2-week holiday and not following the news. It actually helps us feel great during the vacation. Ian has been on a 2 year vacation already.

Other examples. How about the feeling of panic that is fuled by the news around the financial crisis? Don’t get me wrong, there is a crisis. But the economy is influenced strongly by consumer trust. If we don’t trust. we spend less, and we get into a spiral that takes the economy down further.

I sometimes feel the same way about all these social media conversations. They are a lot of fun, but people sometimes take it a bit too seriously. The professional blogosphere is a game. It is a game where (some) people make money. Big sites aren’t there for your entertainment, they are there to make tons of money. Traffic over relevance. Stories promoted into our rss readers.  And this is fine btw. As long as we don’t take it all too seriously. There is more to life than spending  your time in social media conversations. Its fun, its play, but its imapct isn’t life-changing yet (although it takes away a lot of time ;-) ). In the end it is all about what you do in real-life. Don’t let your feelings be manipulated too much by what others think or say out loud. Make up your own mind!

I’ll be turning off the TV a bit more.

Posted in social media, social networks, web 2.0 | Tagged , , | 3 Comments

Our need for real-time information consumption is pointless

What if we have instant access to all the data in the world? I’m flying about 38.000 feet above ground and I’m thinking about this question. It’s part of the mission of Google, everyone should have access to all information. It’s also fashionable in Silicon Valley. It seems there are a gazillion startups that aggregate data for us. We seem to have a never ending hunger for data and information. Where we once depended on storytellers, bards, poets, painters, writers, journalists, we now want to know everything written by anyone. Official information providers long thought they could keep a monopoly on ‘quality’ information, but it is now obvious that they have lost that battle. The consumer isn’t interested in “quality”. He wants to know it all.

We write blogs, create news, produce content, act as journalists, and there are plenty of platforms that allow us to spread our message. It doesn’t stop at news. We are eager to share personal information, wishes, needs, thoughts, ideas, emotions, friends, locations. To find information we use Google, news sites, rss feeds, aggregators, aggregators that aggregate aggregators, news feeds, tweets, social networks. Where news could take years to surface a few hundred years ago we now have almost instant and real-time access to information. Almost. The next evolution can be predicted, we will see the rise of real-time information systems.

If anyone can have access to any information at any time, what is then the value of that information? As transaction costs to produce, distribute and consume information drop to zero the question arises if the information value itself drops to zero too? My guess is that in many cases the data itself will have less value. That same data all platforms are now fighting a war over, the data that makes web 2.0 more important than the destinations of web 1.0.

Ironically there are at least two types of “data” thinkable that can never fit this real-time model and at the same time have tremendously more value than data that does fit that equation. Googling Stephen Hawkins may tell you everything there is to know about black holes, but it doesn’t give you any knowledge about them. Knowledge Stephen Hawkings clearly has. A deep understanding and experience that makes knowledge truly valuable. And all the processing power, disk drives and search engines of Google and the rest of the world can’t capture that. There are no short cuts to knowledge, no matter how much processing power and storage capacity we throw at it.

The other type is the storytelling that has been part of human culture as long as we have existed. And I am not just referring to the storytelling that allowed us for centuries to pass information on to new generations. I’m talking about our daily interactions. If I ask you to remember the last conversation you had that made you laugh or cry, chances are pretty high that this conversation was a real-life one, not an online one. It could be a conversation with a loved one, a family member, a good friend, even a colleague. When we interact with each other, we create. We tell each other stories, we share experiences, we define history together. It could be the most difficult conversation you have ever had, but it can just as well be as simple as having a good laugh with a friend, or watching a sunset together. The information that we exchange is meaningless. Unless you were there, because then the information is priceless.

It is for that reason I tend to be rather skeptical of our current online efforts to get information to us via search, sites, aggregators, rss, social networks, soon all in in real-time. Sure it has value, but that value diminishes quickly when the transaction costs drop to zero. These developments are technological in nature. We solve this problem because we can. And when we have solved it, we will find that all the information in the world doesn’t give us a lot of real value. It just gives us convenience.

Posted in content aggregation, Google, information overload, inspiration, search engines | Tagged , , , , | 17 Comments

On diminishing network effects in web 2.0, social media and human limitations

This post is a followup of a series I did last year on ‘The Human factor in social media’. Technology allows us to be “always on”. To be part of a never ending conversation. Simply plug in, anywhere, and you can join in. Friends are spread out across every timezone, so there always are people available to interact with. Technology becomes smaller so we can take our connection device with us, wherever we go. Connection technology provide us a network that spans the entire globe. Wifi, UMTS, HSDPA, WiMax, no matter where you are there is always a way to get on-line.

Everyone talks about the network effect in web 2.0 ((over-)simply stated: a service gets better as more people join). The network effect explains why the quality improves, it doesn’t explain why we all want to be a part of it. I feel there is an underlying need for interaction that drives current web development. Any respectable  web 2.0 service is based upon the premise that we all want to share anything with the rest of the world. We have life streams (what am I doing), news feeds (what am I reading), traveling plans (where am I going), shopping behavior (what am I buying), localization (where am I now), fan sites (who am I following). Even when you are not on-line, people that follow you are likely to know exactly what you are doing. Sharing alone isn’t good enough anymore. Now we need to discuss it as well. Everything is becoming social. You can share the things you discuss or discuss the things you share. Web companies have a field day catering our need to share and discuss what we are doing.

This ‘Social Media trend’, if you will, partially explains the phenomenal growth of social networks like MySpace, Facebook and even Twitter. The question is, where will this take us. I can’t predict the future, but I find it useful to think in extremes and see if it can help me get a better understanding of the present. I try to imagine what would happen if every Internet user (there are more than a Bln already) would be part of this process. What if everyone shared everything? What if we would all engage in a never ending conversation?

I imagine that a few things would happen:

  1. Our world would become smaller instead of larger. As more people get online, and the data and conversations being shared becomes overwhelming, we will feel the urge to be part of less instead of more. Quality over quantity so to say. It is a natural phenomenon that can be observed right now. Just look at 2 examples of the way we now try to cope with the endless stream of information or conversation. a) Instead of searching ourselves we let others deal with that. In the tech world that would be the Robert Scoble or Louis Gray “like” filter. We ‘trust’ such people to find the pearls of wisdom for us, which takes some pressure off of ourselves. But if you think about it, this behavior is pretty ridiculous. b) We follow or get followed by countless numbers of people that we have never met, only to find out that the information or conversation that gets shared that way is often not as interesting as we thought. We end up listening and engaging with a much smaller fraction of the group of followers.
  2. We end up spending our online time more consciously. Right now we spent hours at a time engaging in short bursts of interaction/discussion. It gives us pleasure, fun, a good time. But when does it really matter? When does it truly have an impact on your life? Change the way you think, feel or act? We may find inspiration, fun and profession on the web. But it simply can’t compete with real-life experiences (falling in love, getting married, birth, death, getting fired, getting hired, a fight, making up again, a beautiful sunset). The online engagements, as much fun as they are, are much more volatile than real life. It is the relationships you build up in the physical world that matter in the end. Family, friends, neighbours, co-workers.

It might be a bold statement but I believe that there is a limit to the quality effects of the network. While this effect can be used to explain why Google search improves as more people join I would be willing to challenge its value in interaction. The network effect improves data, the most important currency in web 2.0 if you listen carefully to the experts.

I would argue that the network effect diminishes in value when it comes to interaction. We simply can’t interact with the whole world. Our interactions would become meaningless, lose impact, and our impact would become infinitely small in a global conversation. Our human limitations force us to focus on value, on those things that really matter. In the end there is no need to interact with 6Bln people. The real impact lies in those few people we engage with that make a difference in our lives. The rest is just play.

Posted in always on, Facebook, human behavior, myspace, Robert Scoble, social media trends, Tim O'Reilly, web 2.0 | Tagged , , , , , , , , | 4 Comments

Our need for interaction locks us up

MySpace has over 200 Mln registered users. Facebook follows fast with 140Mln registered users, and they are adding an astonishing 600.ooo new users every day. A rough estimate suggests that more than half a Billion people are registered in social networks worldwide. That is half of the entire Internet population. Clearly there is a need to be participating in social networks. The need is interaction.

While social networks undoubtedly have brought us many great things I find that the current setup is undesirable. Techies might consider Facebook and MySpace web 2.0, but their strategy is very much 1.0. They are silo’s. You are either in, or out. Or as Doc Searl puts it, Facebook is the Borg. Once in, it is hard to get out. You should realise that it isn’t Mark Zuckerberg or a talented developer providing you cool features that keeps you locked inside a social network. It is their choice of business model. MySpace and Facebook have only one mission, and that is to become the single silo everyone uses as their communication platform on the web. It allows them to execute their free, advertisement based business model. In this business model the network is more important than the user. In other words, the business model becomes more effective when the number of users increase. This is not to be mistaken from the network effect Tim O’Reilly often speaks about in referral to web 2.0 services. Web 2.0 services improve as more people join, in other words, the quality of the service improve as more people use it. In the case of the free advertisement based business model the revenue stream increases when more users are joining, but the overall value provided to the individual user is not 1-1 related to the number of users.

For that reason social networks make it super simple for you to add new friends. At the same time it is nearly impossible to leave the network, taking your data with you. And it is a service violation to export your Facebook contacts to another service. Getting in is easy, leaving is out of the question.

In order to keep the silo the most important platform, new services are added all the time. Facebook is not just a social network anymore, it is a platform of services. It provides users so much functionality that there seems to be no reason leaving it once you are in. A whole generation is now growing up thinking that Facebook is the Internet. And while Facebook and other social networks continue to add new services making this sound very reasonable I see a few reasons why this is undesirable:

  1. There should not be a single company having so much power over our web experience. Especially if such a company leverages our (private) data in their business model. Diversification is good, building one platform and closing everyone into that platform sounds more like an old fashioned communist-like scheme to me
  2. Privacy needs to be controlled by the user, it should never be controlled by the company that exploits all data and interactions of that very user
  3. People are largely ignorant about possible dangers of the information they are sharing through social networks
  4. The business model involved is mostly destructive as hardly any value is created. Facebook has a gazillion pageviews every day. While we are interacting with our friends, they display advertisement to us, thus trespassing through our relationships. The advertisement is largely ignored by all of us. No value creation there. And the sucker that ends up paying for this “value”? The advertiser, unaware of the bottomless hole he is throwing his money into.

Social networks are there for our desire to interact. But that interaction comes at a cost, we lose our privacy and diversity. While that might not sound like a big deal now I believe that in the end this will not be beneficial and even dangerous for us. The nearly unlimited growth of social networks will stop at some point. As we are all on MySpace or Facebook, it will become less valuable and cool to be part of it. Human nature simply doesn’t like captivity.

Posted in business model, Facebook, interaction, myspace, privacy, web 2.0 | Tagged , , , , , | 17 Comments

Interaction will drive the evolution of the web

I’ve often said it, and I’ll say it again. The real value of social media lies in the ability for anyone to interact over anything. It is the interaction that creates the value. Smart people like Tim O’Reilly will tell you that web 2.0 is about the web becoming a platform. That data is becoming more important than software. And that network effect determine value.

Clay Shirky is interviewed by the Guardian about his view of the next decade. Not a great in depth interview, but an ok read. In it he predicts newspapers will disappear (wow), and  that books will be printed on-demand. I do like his final statement:

What does the next decade hold? Mobile tools will certainly change the landscape, open spectrum will unleash the kind of creativity we’ve seen on the wired internet, and of course there will be many more YouTube/Facebook-class applications. But the underlying change was the basic tools of the internet. The job of the next decade is mostly going to be taking the raw revolutionary capability that’s now apparent and really seeing what we can do with it.

Kevin Kelley talks about the development of a new kind of mind:

It is hard to imagine anything that would “change everything” as much as a cheap, powerful, ubiquitous artificial intelligence—the kind of synthetic mind that learns and improves itself. A very small amount of real intelligence embedded into an existing process would boost its effectiveness to another level. We could apply mindfulness wherever we now apply electricity. The ensuing change would be hundreds of times more disruptive to our lives than even the transforming power of electrification. We’d use artificial intelligence the same way we’ve exploited previous powers—by wasting it on seemingly silly things. Of course we’d plan to apply AI to tough research problems like curing cancer, or solving intractable math problems, but the real disruption will come from inserting wily mindfulness into vending machines, our shoes, books, tax returns, automobiles, email, and pulse meters.

And he agrees with Tim on the importance of network effects:

We see evidence for that already. A farmer in America–the hero of the agricultural economy–rides in a portable office on his tractor. It’s air conditioned, has a phone, a satellite-driven GPS location device, and sophisticated sensors near the ground. At home his computer is connected to the never-ending stream of weather data, the worldwide grain markets, his bank, moisture detectors in the soil, digitized maps, and his own spreadsheets of cash flow. Yes, he gets dirt under his fingernails, but his manual labor takes place in the context of a network economy.

I do not pretend to be as smart or experienced as these people. But I think we can safely say that underlying many of these developments there is one major driver. Many of these technological developments have been driven by the human need for interaction. The success of web 2.0 isn’t data. YouTube didn’t become the largest video portal because it stored video’s. It became the largest one because people could share and interact over these videos.

I see that behavior everywhere. Take Friendfeed for example. The most important aspect of Friendfeed isn’t content aggregation imo (that’s actually not important at all as content aggregation lacks intention). It is the ability to interact over the content. I suspect many users engage in conversations on Friendfeed without actually having seen the original piece of content that sparked the conversation.

It isn’t about ‘always on’ either (this used to be the mobile mantra). People do not buy mobile phones with cool technological features so that they can be ‘always on’. The mobile handheld may be a good way to be ‘always on’, but underlying that technical capability I have always felt the underlying need was a fear of not being there when it happens. It allows you to track what is happening and interact any time you feel like it. Interaction is what makes life fun.

I do believe that the nature of the interaction will evolve. Right now it is a very public interaction. Half of the Internet population is on Facebook or MySpace by now. Conversations are taking place everywhere and with anyone. While that will remain, I also think there will be an increased need for more private interactions. Instead of talking with thousands of people all over the world you really do not know, we will see more and more possibilities to allow you to interact with the people you really now and care about.

As a result of this I think we may see a decline in the growth of these huge social networks. If everyone is there, it is simply not as interesting anymore. People will revert to smaller, more private environments in which they can interact whenever they want with their friends, family, colleagues etc.

What do you think?

Posted in Kevin Kelly, social media, social networks, Tim O'Reilly | Tagged , , , , , | 2 Comments