Marshall KirkPatrick provides an interesting overview from the Web 2.0 Expo. In his post Marshall talks about the next frontiers after the API. Everyone that turns on a platform these days also delivers an API to allow 3rd party developers create software on top of that.
According to the article the next frontiers in web 2.0 will be:
- Business models: It is easy to build new applications on top of API’s, for example in Facebook, but it isn’t easy to create revenues of them
- Filtering for information overload: aquote from the article:
Student entrepreneur Abhishek Nayak put it well when he called for a future characterized by “better platforms like FriendFeed, to make sense of all the information and noise from your social networks.” Blogger Eric Eldon of VentureBeat felt similarly when asked what comes next. “FriendFeed will rule,” was his three word answer to the question. How incredible is it that such a young startup has gained Twitter-like metaphor power already?
- Standards and interoperability: Can we make ubiquitous APIs work together?
- Outsourcing API services: The main issue here is scalability.
- Backlash: some predict that the next step might be backwards and away from the “Me too” APIs and platform announcements.
Looking at new business models is very important. I have written a lot about the current “freemium” business model , as Fred Wilson calls it. I don’t like it very much. The pro for it is of course that we all get free services. And that is great. But the con to it is that free always leads to monetizing something other than user value. In most cases “freemium” has the side effect of walled gardens and advertisement. There are only few that have executed this model well making revenues out of it. Google of course is king.
In most cases it sounds great but leads to nothing. Or as Wired puts it, the “I hate Facebook” club is growing fast. It leads to customer lock-in, and network value instead of user value. Customer lock in sounds great for the gardener, but obviously customer freedom sounds much better to me. Business models that leverage customer value are always to prefer. The problem with this concept is that most web entrepreneurs and investors are always looking at a business plan to see if it can become the next Facebook or Google. That means that it needs the ambition to rule the world. As a consequence getting lots of users on board is more important than delivering user value. What do you do when you want lots of users. You start by providing free services and later harassing the user with lock-in and advertisement. It sucks as a business model. Everyone is holding each other in this dead-lock advertisement trap. Why not try something different. Why not see if you can get 1000 people to actually pay for the value you provide them. 1000 is enough to make a living. And the great thing about this model is that if forces the entrepreneur to think in terms of customer value and customer freedom. No lock-in there! The question we are all afraid to answer is he following. “Would you be willing to pay a few bucks a month to use a web service that provides you true user value?”. I bet the answer to that is yes. But we don’t because everyone is currently locked into “freemium”.
The Filtering for information overload theme is interesting, but at the same time it is mainly a tech elite’s problem. The information overload comes from two things. First we Tech bloggers are afraid not to be there when it happens, instead of looking at the information as a river that you can tap in and leave when you are done. Second, underlying all that is the incredible fragmentation of services providing content. Web 2.0 has brought us democracy, anyone can build and launch a service, but that doesn’t mean it brings us quality or user value. I don’t know a single non-tech person (this isn’t sound statistically) that has more than a few sources of content that he needs to look at every minute of the day. But underlying is a more important aspect that makes this less of an issue for consumers. The dominant sharing technology for the tech world is RSS. RSS is great, but it leads to automatic and unintentional sharing. That is why I don’t like Friendfeed as much as I wanted.
But consumers do not share that way (yet). They tend to share intentionally. It means that they see a specific piece of content that they like, they pick it up, and they mail it to a friend. Or they post it on Facebook. Or they SMS a message to a specific person. Or they take a picture and show it physically to a friend. Or they call someone and talk. It doesn’t matter how they do it, they do it with intent. To me RSS is the democracy of publishing. But right now it is non-specific, it targets anyone that is willing to listen to it. Consumers share mostly with intent, and that is more valuable. They don’t have the need to become publishers. They want to share precious moments with others.
Sharing precious moments in life (image taken from Flickr)
I’m not worried about information overload. I’m more concerned that sharing with intent is not supported very well right now. That is an area where we need innovation. RSS might become part of that innovation as a technology that lowers the threshold to share. But I’m betting on other things as well.
In my opinion the next frontier will be to create alternative business models for “freemium”. If anyone can break through that barrier and become successful in generating revenues out of user value, then we could leave the era of web 2.0 behind. It would be nearly impossible, a daredevils trip, but hey, that’s what entrepreneurship is all about isn’t it? Web 2.0 will end when the user and his needs becomes more important than the the technology, the content, the destination site or the walled garden. If that is the case, we’ll be at web 3.0, but I still prefer the user centric web 😉
BTW. I signed up for the web 2.0 expo with a paper that reflects many of the thoughts I mentioned here and in other posts. Didn’t make it through the cut though. Maybe I’m not “mainstream” enough, or I’m all wrong about it. What do you think? Let me know!