The Next Frontier after web 2.0

Star Trek Enterprise, The next frontier

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)

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!

About vanelsas

See my about page, https://vanelsas.wordpress.com/about/ ;-)
This entry was posted in business model, information overload, user centric web, web 2.0 EXPO 2008 and tagged , , , , . Bookmark the permalink.

11 Responses to The Next Frontier after web 2.0

  1. alan p says:

    Alex – re paper not accepted? See my Blogtone 2×2 matrix to see if yours was in Gurudom 2.0 box – you may heve been too sensible😉

    http://broadstuff.com/archives/876-Setting-the-Tone-for-Blogging-filters.html

  2. @alan that is actually pretty good, I like it already. I would definitely put myself in the Gurudom 2.0 box🙂
    And the people that don’t want to read this stuff will most likely put me in the Cheap Shots quadrant🙂

  3. markdykeman says:

    Alexander, I have some similar concerns about the viability of the “freemium” model, although the “walled garden” concept was something that I hadn’t considered before reading your blog.

    It’s debateable that RSS leads to unintentional sharing, since most services make it clear as to whether or not your submissions are being syndicated via RSS feeds. However, it typically is “all or nothing” – every reader either gets the full message, a part of it, or nothing. RSS is really one-way broadcasting of information.

    Ultimately someone pays for content: either the consumer, the distributor, the advertiser, or the content creator. I’m trying to wrap my brain around the “free” models, but it just seems like the costs are being passed around and around until some advertiser is willing to pay. Will the advertiser continue to pay, however, if they aren’t seeing any return?

    The “free” Web seems to have killed the ability to get people to commit to paid subscriptions, or at least reduced the numbers who will. We do enjoy a lot from this free content and functionality, but I do wonder what we might be giving up in the process.

  4. Pingback: News und Wissenswertes vom 24. April 2008

  5. @mark Thanks for the in-depth comment. Wrt your question whether or not RSS leads to unintentional sharing. Let my elaborate a little on that. When you create the feed, it is an intentional act. If someone subscribes to it it is also intentional. However, I’m more interested in the time after that. If I have 10 feeds “feeding” into Friendfeed, then it seems pretty clear to me that in many cases I broadcast a lot of content through those 10 feeds. And it seems to me that I tend to “forget” they are there. I share everything, but after a while the intent disappears. I might add a picture to Flickr, not realising it is visible to anyone on Friendfeed. For some content, the type that needs publishing or broadcasting, this is fine. A blog is a good example of this. But for other types of content, pictures are an interesting example of that, a broadcast isn’t the right thing to do. Pictures are often about sharing important moments or memories. They have intent when the picture is taken. They create value when I share them with a friend. But they lose a lot of that value when I broadcast the picture to the world. Not always, but in most cases. Intentional sharing to me is in most cases not a broadcast or publishing act. It is more a 1-on-1 or 1-with-a few interaction.
    I like your Freemium picture of costs being moved around. Very true and very non-efficient or valuable. I’m not so pessimistic that a business model in which users pay for value isn’t possible. But it does go against mainstream thinking and certainly has an air of “I am not going to rule the entire world” to it. But there is still a good business case possible with less than 100Mln users😉

  6. Pingback: WinExtra » Drowning in APIs & Death by freemium

  7. markdykeman says:

    @Alexander – I guess I see your point, although you could avoid the picture sharing problem by a) using a different photo sharing service or b) removing that stream from your Friend Feed.

    However, at the same time, it IS easy to forget that all of these services are streaming into Friend Feed (and Facebook if you installed their Friend Feed application). It’s easy to forget, for example, that every submission that you Digg on Digg can appear in FriendFeed; people may judge you on that activity.

    All of these services seem to be leading to a transparent life, in which not only is your data stored in the “walled gardens” but more and more actions are now visible across the Web.

  8. 1-to-1 has been inundated by current Inbox systems like email / IM etc.

    1:M has been covered effectively by Y!groups and other mailing lists.

    1:All is taken care of by Blogs / RSS.

    The missing piece that no one has yet to address is 1:F in a large scale, and that falls in the camp of collaboration. Business collaboration systems abound but they have not scaled for everyday use.

    For an example of the power of the Few in daily life, Google for “small groups” and you will see that the majority (if not all) of the 8million results are for Christian evangelicals that use this aspect of human nature to propagate their message. I cannot think yet of any marketing machine in the world that has stood the test of time as the Christian missionaries. The reason for this, IMHO, is that there is a feeling of self-improvement in the context of small groups, i.e. the notion of a reflexive Identity becomes clear when juxtaposed with a small set of people in everyday communications.

    The model of Christian small groups is that once a group becomes too large (> 15), you are supposed to break off and create your own small group, i.e. create a new facet to your life. Thus, the meme travels through these multi-faceted human agents.

  9. @mark exactly

    @srini I like your 1:F example. Having more han a few relationships makes it more complex rather quickly. So for user interests it would be good to reduce complexity. Wrt to your observation on 1:1, 1:N, 1:All. Yes, technically they have been solved. But in terms of the user able to use the technology effectively, I believe there are many improvements possible. Just think of how ineffective e-mail can be (spam, too much, can’t handle large files etc etc).

  10. Although the 1:1, 1:M, 1:All have universally available tools, they are indeed breaking down for the reasons you mention. Instead of a message oriented model, a relationship oriented way to create and navigate the information is the obvious next step.

    Back to the point of the original post – consumer’s intent behind sharing – that is an interesting choice of words, because the whole premise of Google is that there is an intent behind the search and they are building the ‘database of personal intentions’.

    Maybe what we are heading toward is the ‘network of shared intentions’. This kind of space – in a 1:F scenario – has far more available context than a purely personal context, and is more actionable compared to a 1:M context because the number of participants is manageable.

  11. Pingback: Drowning in APIs & Death by freemium — Shooting at Bubbles

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s