The one thing that Google Nexus One has over the iPhone

The Google Nexus One is open

The iPhone is a pretty walled garden

Lots of posts up this morning about the launch of the Google Nexus One. While I fully understand that most of them focus on a (technological) comparison between the Nexus One and the iPhone (the king of the smart handhelds), I believe that it is important to step away from the technology.

Technology will evolve and will be copied. Within no time there will be tons of devices out there that technologically can match and outperform both the Nexus one (you begin wondering what a Nexus 2 can do 🙂 ) and the iPhone.

There are tons of reviews and comparisons out there already (here, here, and here for starters)  and they (for now) tend to favor the current iPhone over the Nexus one. But I don’t care about that. In a year from now these phones will be horribly outdated and we’ll have moved over to sexier gadgets.

Instead of matching functionalities and features we should focus on where they differ most. And if you analyze that carefully you will spot the difference between the culture of the companies Google and Apple. The biggest difference between the two is that Google has decided to open up the mobile market, where Apple has created a closed ecology. There are good reasons for both strategies.

By creating a closed, tightly controlled ecology Apple was able to deliver one of the best handheld devices ever. They have shaken up the entire mobile space with a single device. They have created the best app store and there are thousands of developers working on cool applications for the iPhone. Apple controls the entire experience and was able to break through the monopoly of the mobile carriers by delivering something everyone wanted to have.

The downside of that strategy is well-known. As a user you do not have the freedom to choose the carrier with the iPhone. Nor can you buy an unlocked version. Apple dictates what carrier you are to use. As a developer you cannot get your iPhone app in the store, unless Apple approves it. You are at their mercy. And while this might improve quality it also provides a ground for corruption or power misuse.

Google on the other hand has taken an entire different approach. Instead of focusing on controlling the entire experience, it places the user in the center and lets him decide what to do. It has created Android OS which is now distributed across many different devices. It has an app store that everyone has access to. It encourages free distribution and development of their software. And now it has delivered the Nexus One, a phone that isn’t tied to a mobile carrier, and (disregarding some technical barriers) can be used with any carrier. They even have set up a web store where you can buy the phone without a carrier, or add a carrier plan to it. Who would have thought this to be possible 3 years ago? Who could actually break the monopoly the carriers had on handset distribution? We have to thank Google for that although Apple clearly paved the path for this disruption

Arguably, this approach comes with some downsides too. The user experience might not be on par level yet with the iPhone. The app store might contain more garbage (the less apps will be sorted out quickly). But these costs are relatively minor compared to the freedom the user gets. Most people (think volume here) will not care about the extra added value the iPhone might bring. The Nexus One and future handsets will be good enough. People will settle for good enough and choose open, instead of closed.

To me, this freedom is important. Apple shows traits of communism, Google of democracy. Both have advantages, but I choose freedom over walled gardens. And that freedom is way more important than technical specs. And it is Google’s strategy that will win in the long run. Android will be the dominant OS on mobile devices in the coming years. The iPhone will remain to be a unique and high quality phone. But it will be blasted away in volume by (cheap) Android handsets, and it will also get tough competition from more Android super phones (as Google puts it).

What do you think will happen with application development if Android handsets flood the market? The cool apps and new innovations will not be build solely on the iPhone anymore. Development will follow where the money is. And the money will be in volume not in high-end, closed ecology iPhone handsets. The iPhone was the first. Their first mover advantage has given Apple a huge revenue. They will continue to be profitable with the iPhone, but they will be overtaken by Google (in volume and revenues) in no time. It’s a tidal wave coming onto the shore, and there is no way of stopping it with a walled garden. You simply cannot beat the volume.

The NY Times is wrong about this.The Nexus One isn’t just a worthy rival of the iPhone. It’s a landmark that will shake up the entire mobile industry.

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5 predictions for 2010

Palantír

Since everyone seems to be doing them I thought I’d give a shot at some predictions for 2010. No, I don’t carry a magic ball. And since I am primarily  interested in the usage of technology, instead of the technology itself, I’ll try to stick to human behavior. No need to believe a word I say. I’m just thinking out loud here. I am curious as to what you think will happen in 2010.

1. The importance of the status message will devaluate

When your own mother starts setting status messages then you just know we’ve crossed the top of the hype curve. No seriously. I believe that in 2010 we will see a backlash of current Twitter and other status message services. These services will be occupied with SPAM and aggregation bots. Twitter traffic may go up, but activity will be mostly computer generated. Real people will leave the service alone as the SPAM pressure increases. Same thing holds for aggregation. It’s too difficult for me to interact/share/aggregate with the whole world. Instead, I expect to see highly localized and immersed communities appear with less people following each other but with more meaningful information exchange.

2. Social media will become business as usual

Let me tell you a little secret that most Social Media “Experts” are not telling you. Social Media isn’t “new”. Interaction, engagement, knowing your customer, getting into a conversation with him or her. The “need” for a social media strategy. It’s something successful businesses have always done, even way before the Internet existed. The terms themselves are meaningless, empty words. It’s not about  words, it’s about your actions. The scale may have changed, and that provides everyone some challenges, but the act itself is as old as businesses are. Social media is the fad of 2009 and will be unmasked as such in 2010. Social media will become part of any marketing mix, but it will be questioned on its value just like any other tool.

3. Large social networks like Facebook will face severe privacy challenges and user outrage

Monetization and socializing just do not get along very well. Facebook has had its share of user outrage in 2009 and will continue to face more in 2010. Facebook setting sharing to public by default is evil. and goes against what the service was about when it first started. SPAM, Nigerian scam artists, Russian/Chinese hackers. They love Facebook and they will provide a continuous stream of privacy and security incidents. Users will get increasingly annoyed, and as a result of this public sharing will suffer. I believe we will see more of these incidents hitting the big social networks this year. I also feel that users will get increasingly annoyed with this.

4. Android will wipe away most competition in the Mobile OS space The tremendous growth of the iPhone will slow down and the handset will lose its main competitive advantage (the coolness factor)

It’s a battle between open and closed systems. Open will win, always. Android will flood the market in both cheap and expensive handsets. As a result, a good user experience and touch screens will be accessible for everyone. That takes away part of the coolness factor of the iPhone. Even though it’s user experience is still unmatched I believe the tremendous growth of the iPhone will slow down. People don’t need great, they will settle for good enough. And when Android flies, it’s development ecology will grow too. Pretty soon you will be able to get the apps you can get on the iPhone on Android too, and that takes away another reason for having an iPhone. Apple will continue to make lots of money on it but it will not dominate the mobile market with the iPhone. It will be Google and Android that will dominate big time.

5. Mobile startups will draw lots of investments but will face distribution and monetization challenges, just like startups on the Internet face(d) them

2010 will show incredible growth in Mobile. There are more devices, more users, mobile access of online services will sky-rocket. And so investments will be drawn towards mobile startups. Location, location, location. the new buzz word. Location based advertisement seems to be the new gold. Services like Foursquare, or augmented reality are the new growth areas. But with growth challenges regarding user value will come too. Looking through a camera to see an augmented reality is fun, but feels a bit silly too. That is something that needs to be addressed, otherwise people will stop looking at alternative realities through their mobile camera. A big UE/UI challenge in my opinion.

And then there is the monetization issue. I somehow doubt that end-users will appreciate a lot of commercial information to be presented to their mobile phones. A mobile device is by its very nature personal property. Location based advertisement will certainly grow, but will face severe SPAM and user annoyance challenges. The only advertisement solution that has ever been really effective is search. If I want commercial information or a transaction, then I will be looking for it. If it gets pushed to my mobile device, I might not (always) like that very much.

If a service like Foursquare can get past the play (I’m spamming my friends to tell them I’m the major of some dorky location) then it might be a good way for businesses to connect to consumers and vice versa. Otherwise it is bound to end up as dead as the community that will start abusing it for personal broadcasting purposes.

The mobile space does have a huge advantage over the web. People are used to paying for services there. There are (micro) payment solutions available, so the conditions are available to monetize services and content. The iPhone app store proves that people are willing to pay for value, so I can only hope that that business model will dominate the mobile space.

So what do you think? Any of this make sense? Or do you think something completely different will happen? Let me know 🙂

An open letter to Eric Schmidt

Dear Mr Schmidt,

You are the CEO of one of the most innovative, successful and remarkable companies in the world. I deeply admire what Google has achieved in the past years. You’ve created the best search experience in the world, and continue to improve it. It helps us forget about URLs, a tech problem, and instead focuses on the thing we are looking for. You’ve created maps that allow us to visit the world, the stars and the deep-sea without having to leave our chair. You’ve mashed these maps up with incredible useful data, allowing me to find directions, locate stores, see what a street looks like. You’ve invested in one of the largest video portals in the world, even when there wasn’t a clear business model  (but lots of user value). You’ve managed to give Apple the dead-needed competition for their iPhone lock in arrogance. With the development and ecology of Android, you have given handset manufactures a compelling reason to stop delivering useless mobile interfaces and instead focus on what they are good at, building hardware. You have helped organizations like Mozilla that want to make the web a place where the user is in control. You’ve just released Wave, a brave attempt to redefine the way we collaborate and communicate, and I’m sure that this investment will benefit us all.

You are the only company in the world that has made advertisement an added value instead of a stand-in-the-way. Where most services lock me in so that they can throw their unwanted advertisement to me, you have set me free and present me advertisement when I’m actually searching for it. You have helped small and large businesses to connect their business to my needs in a (cost) effective way. You are continuously helping other businesses to run their business with applications, services and open API’s.

When reading back this list of achievements (which is hardly complete!) I think you can be proud of the achievements of your company. I think we all have benefited from the great services Google provides us all. But these achievements are realized at a cost. And that cost is that we (the Internet users) need to give up (some) privacy, in order for all of this to work. I think that most people will not mind this. It’s a simple trade really. We expose ourselves a bit, and in return you provide us with excellent value.

Although the exchange is simple, its execution is flawed. The exchange has been made implicit. In other words, users are hooked into great services, but are not aware that they are actually trading (part of) their privacy for it. While this may not be a large problem for most, it may be a huge problem for some. I believe that it is this implicit exchange that disturbs the balance between the service provider and its users. This imbalance is unhealthy. It leaves Google with almighty power and the user with little. It is impossible for a user not to be part of this exchange, unless he doesn’t connect to the Internet. It is  impossible for the user to negotiate different exchange rules with Google. And while your motto may be “Do no evil” this imbalance is a fertile ground for evil things. Power corrupts, and the balance of power is currently favoring Google.

Even more worrying is your simplistic view on this. I refer to a short video fragment in which you state literally “If you have something you don’t want anyone to know, maybe you shouldn’t be doing that in the first place”. Maybe I shouldn’t judge these words too harsh,  based on a 1 minute video clip, but that is probably one of the dumbest quotes I’ve heard from you, ever. There are tons of valid examples thinkable where a person wants to do something and not tell anyone about it. Let’s not enter that discussion now. The problem lies in the fact that Google is not explicitly asking the user if his actions (data) can be indexed or not.

If you really believe in your own motto ‘Do no evil’ then I would kindly request you to rethink the relationship between Google and its users. While you have already done incredible things for us, why not take it one step further. Why not restore the balance and help users define and control their privacy online. I’m betting that 75% of the Internet population will not mind exposing themselves to your company if in return you will provide them incredible value. By making that trade explicit you will not only restore balance, but most likely receive much better personal data from the user as he or she will be willing to share that.  You might lose some data from that  30% that explicitly denies or restricts this exchange, but that will benefit both you and that user. His privacy is still intact, following user specified rules. And you will have much improved data from the other 70%, and at the same time have 100% user satisfaction.

Privacy isn’t just about hiding personal information. Privacy is about choice. It’s about freedom. It is about the user that can draw his personal line somewhere in this exchange. It’s about restoring the balance between the user and the service provider. Many hot shot Internet guru’s have told us that privacy is dead. What they are saying is that personal choice and freedom are dead? Do you really believe that? That would be evil.

You and your team can make a difference. You could easily help to build the infrastructure that is needed for users on the Internet to be able to set and control their privacy across any service or network. You have the means and the power to set up this user infrastructure. Its sole purpose would be to serve the user. It would make the world a better place. It would also make Google indispensable as a valuable partner for the user. And it would end up making you more money than you already do.

How about it Mr Schmidt? Would you be willing to take that step? If you need help with that challenge, then give me a call, because I would like to help too. I hope to hear from you.

Sincerely yours,

Alexander van Elsas

The power of OpenID

[disclaimer: this post is related to my work as CEO of Glubble]

OpenID

Yesterday was a big day for Glubble, a private social network for (extended) families including small children. We introduced the ability to register and log in to Glubble with existing accounts from other services using OpenID.

The continuous battle for the consumer has led to a wilderness of services fighting to lock in the identity (data) of the user. Services require the user to register with e-mail addresses and passwords, forcing all of us to maintain multiple identities across services. Once in, its hard to get out again.

Ideally I would like to see services appear that have only one purpose, to protect your identity on the web. It’s like a bank which only serves you and your identity and doesn’t have any other commercial activities (like advertisement based business models for example). It ensures that you are in control of your identity. Your identity, and related to that the ability to control your privacy,  is probably the most valuable thing on the web and we tend to give it away easily for some fool’s gold. It’s nearly impossible to create a marketplace for identity providers, mostly because there is no business model that can create such a market. We don’t understand nor care its important, and currently we aren’t willing to pay for it.

The next best thing besides neutral identity providers is OpenID. OpenID allows consumers to re-use an existing (and trusted) identity. If you already have an account with Google, or Facebook, or whatever, OpenID let’s you re-use that account to register and log into new services. After speaking with Chris Messina, OpenID advocate, we decided to implement OpenID for Glubble. I believe we now may be the first service for families on the web supporting OpenID.

The benefits for the consumer are huge. A nearly 1-click registration and log in process replaces the need to remember yet another e-mail address and password combination. We’ve gone live with it yesterday, and although it is premature to discuss statistics, I can say now that already 50% of new users are registering with one of the OpenID options we currently provide! I expect this nr to increase when we add more providers in the coming days.  If you want to, you can give it a try here.

At Glubble we are committed to putting the user in control. Providing an OpenID registration and log in is the first step. We will continue to add more controls that empowers the Glubble user to take control of his identity and privacy. We ‘re doing this the hard way (everything on Glubble is private by default, and we let the user decide what he wants to share publicly). But in the end we feel it will help the consumer to become more aware of the need to be in control of identity and privacy.

OpenID is the first step, and we are very happy with it 🙂

The human factor in social media (revisited)

Trying to understand the now

Last year I wrote 3 (rather long) thought experiments I pretentiously called ‘The human factor in Social media’. You can find part 1, part 2, and part 3 here. I was reading them back recently and thought about what came true of them so far. They weren’t meant to be future predictions, the thought experiment then was to understand the ‘now’.

Let’s see if we can make up the balance now.

1. Everything will connect with everything, walled gardens will be torn down -> But we will still need a destination

Is there an end thinkable to the growth of ‘walled gardens’? I argued then that at some point these walls will be torn down and the service would become a utility instead of a destination.

OpenID is taking off now, allowing you to log into services without creating yet another identity. Twitter gets more traffic from clients than from its main web site. Facebook is fiercely fighting to become the ‘de facto’ social platform.

However, Google is the only company that got this from the start. See for example their stealth social network. A Google account is something you can take along to almost anywhere. And now with Android exploding, Google will take your “home” into the mobile web. Google doesn’t lock you in, and by doing that they become more and more valuable to us. It’s the main reason why I think Android will eventually overtake the iPhone. Entrapment is a long-term failing strategy.

2. “Always on” will have a huge social impact -> But it will lead to a need to disconnect

I noticed last year that there was an imbalance between ‘on’ and ‘off’. I personally have felt the need to slow down and spent less time emerged in social networks and with the ‘biggest Internet invention’ the status update. The magic is gone.

I’ve seen more people doing that, but in essence I feel now that we haven’t reached a tipping point yet. More and more time is spend on short bursts of communications (often in the form of sending, instead of receiving), less time is spend on depth interactions. We seem to have forgotten that the basis for any good interaction is the ability to listen.

3. Information will be available anytime, anywhere, anyhow -> But the real value lies in people

This is a very actual problem we are facing now. the noise that we now have access to is immense. Following quantity has overtaken quality. Publishing quantity has overtaken sharing intentionally. Finding the right people or knowledge is a hard problem to solve. Friendfeed tried it with friend recommendations and failed. Twitter is overtaken by its addiction to growth instead of quality.

Instead of choosing the obvious solution the tech industry is already looking  for tech solutions (reputation, trust based algorithms). It’s a nice exercise but not as effective as the most obvious solution. Just scale down the nr of people you follow or interact with. There are tons of examples available of people stating that their Twitter experience and value increased considerably when they stopped auto following people, and started following people they had met in real-life. We can decide for ourselves who is important and who is not. You don’t really need a smart algorithm for that.

4. Public interaction using social media is exciting now -> But highly localized immersed interaction will be more important

Do I need to say FourSquare, Yelp, Loopt? The trend is obvious. There is much more value to be gained from highly localized networks and interactions. I said then:

Communities connected by location, interest, expertise, immersed into the physical world that surrounds them. We will see the same behavior there as we see now in the public, but the real value for the individual user will be obtained from these smaller communities. It will lead to less information and more knowledge. And this trend or effect will be driven by the most personal interaction device we have, the mobile phone.

5. Social media makes us all public figures -> This will lead to an accompanying need for privacy

This is a tricky one. It is something I feel strongly about. It’s not that everything needs to be private. I just want people to be in control of their own privacy. It’s a conversation that keeps popping up. We need a single place where we can store our identity online and from that decide what parts of it can be made available to other people or services.

Current practice shows that privacy is loosing ground quickly. Over 300M users on Facebook show that they either don’t understand or care about their privacy. Privacy is translated to the small domain of user – user interactions. I want it to cover service provider – user interactions as well. You can set your privacy to maximum on Facebook, but you can’t find a switch that protects you, your friends, your interactions from Facebook itself. You and your data are commercially exploited and no one knows or cares enough to do something about it. I have to be realistic about this and realize this is not a problem for most people.

What do you think about all of this? Does it make any sense? Let me know.

I do not recommend that you read this

people

Recommendations are a powerful feature on the social web. They represent real value, just look at the king of recommendations Amazon.com making huge revenues with it. And while I do look at them at times, I am always a bit reluctant to use them for the really important stuff. Same goes for Facebook, Yelp, Foursquare, Twitter and many other services like that. From a business perspective they offer a new and unique way to be connected to potential customers. From a customer perspective they offer me the value of the views of other customers. It’s big, and there is value all around!

So why am I reluctant to use them? I have 3 primary reasons:

1. The interaction leading to a recommendation makes it more valuable

When I am looking for a recommendation I tend to turn to friends and use 1-on-1 channels to get information. I call my brother, I e-mail a friend, I talk to a colleague. Why? Because I know them, I trust them, and the exchange of chit-chat serves a social need. Although this process has been copied to the web, it tends to deteriorate in quality fast. I think mostly because the recommendation has overtaken the process of interaction itself (chit-chat) and we underestimate the importance of that interaction.

An example to explain. Chris Brogan or Robert Scoble can be seen as professional and great recommenders. They share stuff that matters and they bring along a lot of trust, experience and expertise along, so the things they share are valuable to whoever receives it. But what is more valuable? Chris or Robert publishing relevant links and tips, or you sitting down with either one and in that conversation you obtain recommendations for something that is important to you. The first situation is great, the second may be priceless.

2. It’s difficult to determine if a recommendation can be trusted

Many recommendation systems have been played by the business or brand. Looking for a new book? Who knows who actually wrote the recommendation? For all I know the recommendation was written by the author or a competitor author. It reduces trust and makes me rely less on these ‘reviews’. I know there is technology to help us here, but it is still a tough problem to resolve. I don’t care about 100 great reviews from people I don’t know, I care about talking to someone about it and then making up my own mind about it. And given point 1) I’m a bit reluctant to use services like Yelp, Facebook or Foursquare to see what my friends are saying about some topic. It will provide value, but will not replace 1-1 interaction. And I don’t need those services to connect to these people. They are my friends.

3. The world becomes a ‘Lonely Planet’

I don’t like the Lonely Planetization’ of the world that we live in. When I go on holiday and use the Lonely Planet as my guide I know one thing. I’ll be visiting places that millions of other tourists have visited too. That is not so bad, but the real killer is that it takes away the adventure and surprise of discovering things yourself. in other words, it isn’t so important to me to discover new places (that’s nearly impossible), but it is important to me that I do most of the discovery myself! The surprise is what makes life fun and valuable. Knowing beforehand that 100 people liked or disliked the place takes away the opportunity for me to make up my own mind.

The social web is quickly turning into a peer recommendation, wisdom of the crowds type of marketplace. It’s a logical next step and we will gain value from it. But besides this inevitability  I’ll try to keep holding on to meeting people in real-life and gaining insight from that interaction for as long a I can.

To be free we need to break free of web 2.0 thinking

Freedom

You’re meeting someone at a party for the first time. He introduces himself to you.

“Hi. I’m Tim Eastwood. I’m 29 years old, live in San Francisco. I’m married to Laura, have 3 children Joe, James, and Jenny.”

During the conversation you have with Tim you learn that he votes Republican, that he isn’t a religious person, that his wife and him got into several near-break up fights in the past. That he got fired recently and is now looking for a job. Yesterday he was at the Starbucks at 1390 Market Street. He loved the cappuccino but didn’t like the sandwich. His best friend Joe is gay, Tim is ok with that. Tim’s e-mail address is tim.eastwood@gmail.com, he has a bank account with the Bank of America, and uses as Visa credit card which he happened to use yesterday when he bought the book “The Bush tragedy” at Amazon. You’ve seen ton’s of pictures of Tim, his wife, and their three children. You know what schools the children visit, and what movies they like to watch. That is just for starters. Before you know it, all of Tim’s friends pass by with descriptions, believes, quotes, photos, things they are doing right now.

Triggered by his enthusiasm you tell  Tim a lot about yourself too. You are engaging in an open conversation and it feels great.

While you are talking, you begin to notice that people surrounding you have stopped their conversations and are clearly listening in to your conversation with Tim. To make matters worse, you then realize that the host of the party is filming the entire conversation, projecting it on a big screen.

Sounds crazy? It’s exactly what we are doing right now on the web. In real life we would never disclose so much about ourselves, family, friends, believes etc. to someone we just met.  In the real world repercussions of disclosing personal information tends to be contained within the group of people listening in and gossiping about it. Online things are different. Once recorded, it never disappears. And yet when we get online we disclose it all.

It’s a topic that keeps fascinating me. It’s hard to understand why people tend to feel that their online lives somehow are disconnected from real-life. Almost to a point that their online profile or identity is an alter ego, it feels like someone else. While we may pretend that when we go online it isn’t really us, the reality is that our identity, interactions and data are collected, stored, and commercially exploited. Do we know? Do we care? Hard to say. All we know is that there are hundreds of millions of people joining in this ‘global conversation’ via social networks like Facebook, Twitter, MySpace etc.

Facebook revenues

There is a clear responsibility for a user to stay in control of his privacy, but at the same time we can safely say that most are lured into this conversation by companies that offer substantial benefits without disclosing what the user is giving up for it in return. Facebook takes privacy seriously, it provides the user complex and hard to use privacy settings. While this sounds great, it’s a hoax. When Facebook talks about privacy it means the privacy of the user towards other users. It doesn’t talk about the privacy of the user with respect to Facebook and it’s business model. Facebook doesn’t provide the user with a switch that prevents Facebook itself from exploiting the user commercially. And it provides 3rd parties simple means to extract your entire profile without consent.

This schizophrenic behavior is caused by the underlying business model. Web 2.0 is driven by the network effect. Value is created by those that own the largest networks (social graphs) and hog the most data. Data is the currency on the web. Evangelists like Tim O’Reilly have been telling us this for a long time now. In my opinion the biggest tragedy of the success of web 2.0 is its failure to put the user in control of his identity and privacy.

[update] TechCrunch writes about the latest Facebook plans. It’s consistent with their strategy of becoming the de facto social web. And the Next web talks about plans of Facebook to share your e-mail address with 3rd party developers. These are again not user-driven but network driven plans.

Don’t get me wrong. I do not object by default to commercial exploitation of user data. I do object to the fact that a user isn’t opting in on it and that he really has no control over his privacy or identity whatsoever. Robert Scoble has said many times he doesn’t mind giving up privacy because he gets more value in return. The upside of talking in public about a disease might be that you will find others in the same position sharing their experiences with you. The downside may be that you won’t be hired for a next job because the company has access to your medical condition. How many of those hundreds of millions have made that same conscious choice? Do people really understand that when they join a service like Facebook they are exposing themselves, their children, their family and friends to a company that exploits their interactions?

A new balancing act

There is only one way out of this. We need to get out of this confining web 2.0 definition and build new business models. Business models that are not based upon network effects and hogging user data. We need user-centric business models. And with that we will see user-centric services appear. Services that have a clear and transparent business model. Services that generate revenue by delivering user value. Services that do not depend on customer lock-in but on user freedom. Services in which the balance of power has shifted from the company that exploits to the user that receives value. A new balancing act.

In the ecology that is build around the user-value principle users can manage their online identity and privacy tools. And they can make a conscious decision to share relevant personal information in return for value. The big difference is that the user will be in control. And that may very well be the scariest thing for companies to get used to.

If we want to be free, we need to break free of web 2.0 thinking.

Why Google will win: entrapment in the iPhone is a failing long-term strategy

The iPhone is a pretty walled garden

Entrapment can be an effective strategy when you are building up a business. Marketers tend to call that customer lock-in. From the perspective of the business this sounds like a great thing to do. Hook the customer to your business and dont let go. From the perspective of the customer it sounds exactly what it is, an entrapment.

There are many examples where entrapment has proven itself as a successful strategy. Think AOL, Facebook, any advertisement driven business, newspapers, banks, cable, insurance or telephone companies. Entrapment works because joining is easy and leaving is nearly impossible. But in most cases these companies haven’t read their history books. Entrapment is a short term winning strategy, but it’s bound to fail in the long term.

It’s human nature they are up against. Sure, we are all lazy, naive, and let things happen for a while. But in the end we don’t like to be trapped. We don’t like it when our freedom (choice!) is limited by the thing that entraps us. And this desire to be free is what drives competition in. Someone creates a monopoly? It’s bound to attract newcomers that blow up that business by doing things differently (remember the innovator’s dilemma?).

The most recent success story wrt entrapment is the iPhone. It revolutionized the mobile space. It showed that a market that was dominated by hardware manufacturers and operators couldn’t really innovate anymore. Apple proved that there were HUGE improvements possible in the user experience of a mobile device. And it has become a huge success.

With the iPhone came entrapment, a strategy Apple has mastered like no one else. Apple dictates every aspect of the iPhone. It has the sole power to decide what app makes it to its store and becomes successful. There are countless stories (here’s one) available by now of developers getting stuck in the horror and randomness of the Apple approval process for their app store.

It doesn’t end there. From the initial launch Apple has even dictates what carrier the end user has to call with. I’ve been using the same mobile operator for years and I am very satisfied with it. And Apple has the audacity to decide that I must change to another operator in order to be able to use their product? For me that was a bridge too far. I do not want to be restricted or entrapped. I want choice.

I’m writing this because I feel it is time to remind Apple of history. Entrapment may be a short term winning tactic, but it’s a long term failing strategy. You can already see the moles digging through this carefully constructed walled garden. Palm has changed it’s app store policy entirely, giving freedom to developers to publish apps. And now there is Android. Where Apple has focussed on building the perfect mobile device, luring people into their trap like sirens, Google has worked with the industry on a new open standard. Where the tech industry initially laughed at their first attempt, I think everyone will now fall silent with the ecology that Google and partners are now creating.

TechCrunch counts an avalanche of 24(!) new android phones in the market. The tech purist will now argue that none of these phone can match the awesomeness of the iPhone. I say BS. The awesomeness of the iPhone will be copied, changed, improved, matched/not matched. It doesn’t matter. Let me repeat that. It doesn’t matter!

The one thing that Apple can’t do and Google just did is offer choice. The empire Apple just started to build up using their dictatorial and proprietary strategy just got blown to pieces by choice. Who do you think will win this battle? Android will flood the mobile market with hundreds of new phones, thousands of apps to go along with it, and presence with every hardware manufacturer and mobile carrier.

Entrapment is great at start. It probably give a lot of adrenaline to dictate what the world looks like. But what Apple and so many others fail to realize is that it’s all short term tactics. In the long term the only winning strategy is a customer that wants to be with you, not one that is trapped into your service. And for that reason the iPhone will be marginalized by its competitors. History already taught us that.

Google Wave is a plumbing project for the web

conversation

So, Google Wave makes people unproductive? Says Robert Scoble in a good post where he writes down his first impressions with the new service. Robert says:

It is noisy, but the noise often happens way down in a wave deep in your inbox.

This is far far worse than email. (New email always shows up at the top of my inbox, where Google Wave can bring me new stuff deep down at the bottom of my inbox).

It’s far far worse than Twitter (where new stuff ALWAYS shows up at top). It’s even far worse than FriendFeed, which my friends always said was too noisy. At least there when you write a comment on an item it pops to the top of the page.

And, worse, when I look at my Google Wave page I see dozens of people all typing to me in real time. I don’t know where to look and keeping up with this real time noise is less like email, which is like tennis (hit one ball at a time) and more like dodging a machine gun of tennis balls. Much more mentally challenging

This doesn’t come as a real surprise. Making a conversation real-time can create an overflow of information. But I think it is too soon to assume that Wave will crash on a beach. I once wrote down 10 reasons why Google Wave would change the way we communicate. Google Wave will become far more important than the first demo/service we see people struggling with now. It’s a bit odd to quote myself in a post, but I still like what I’ve written about this earlier:

Whereas services like e-mail, instant messaging and social networks always have been build on the premise of a walled garden business model, Google Wave can become the new communication structure services can develop upon. It is set up from the start as an open source project with a clear focus on development API’s. I’m sure that Google will launch a Google Wave service at some point that will attract many users. But it also allows any other service to use that same paradigm to implement unified online communication.

Google has not only spent time and energy making sure Wave can suck content into the platform, it has spent as much time and energy making sure it can get out too! Farewell destination based business models. Farewell walled gardens. If Wave gets adapted, it will put the user in control, and that is exactly what we need to do to break out of our current web 2.0 boundaries. That is what makes this development so remarkable.

Robert runs into the problem that online conversations, the way he currently runs them, aren’t really possible in real-time. It’s just too much input that needs to be processed, even when you have a 30 inch screen in front of you. That is not a real problem though. Google Wave is a technology that can be decentralized. It doesn’t need to be used in a public ‘conversation’ with thousands of people. Google Wave will help us scale down the conversation, which btw is the most obvious way to get rid of noise. It helps us move away from destiny based web services. And,  Google Wave has taken as much effort to allow you to export data out of the service, as you can bring in.

Robert ends his post with tips to scale down the noise, fitting perfectly.

Google Wave is a plumbing project for the web. We need to start using it for what it is or can become. It has the potential to add a new communication layer on top that will not limit our conversations to a single service. I think that is the biggest win for the web in quite a while.

Update: While I pressed the publish button, I came across this good post that is making a similar point.

Two falses do not make a right

moron (image taken from http://www.blippitt.com)

If a woman is raped, do you feel it’s her fault because she was dressed sexy and flirting a bit? If a tourist gets mugged on the streets of New York, would you agree that it’s his own fault because he shouldn’t be carrying an expensive camera around? If a person gets ripped off on eBay do you feel it’s his fault because he should know that people can’t be trusted?

According to a post by SiliconAngle, responding to a Forbes post,  this type of reasoning justifies that companies use uploaded photos from social networks in advertisement, without the user knowing. It’s all the fault of the user, he or she should know better. Uploading and sharing personal info on the web is dangerous, and we shouldn’t be surprised that the data might get (mis-)used commercially.

The author doesn’t agree to these practices, but does point to the user first. It ‘seems’ the user’s responsibility fault.

Bullshit.

People do not share information about themselves because they want to be commercially exploited. Sure there are lots of social media ‘fanatics’ that share as much as possible about themselves and are always looking to be in the spotlight. And yes, people do stupid things. And they are incredibly naive. All of that is true, but that doesn’t make this practice right!

‘The responsibility for your online privacy lies with you’. It’s a dream waiting to happen. We can only be responsible if we actually have any control over our privacy. We can decide not to join Facebook, but we can’t force others not to publish anything about us. We can turn on every privacy switch there is on Facebook, but where is the privacy switch that protects us from Facebook itself? We can carefully select our friends in social networks and then never realize that our data is exploited commercially. The truth is, social interaction and sponsoring that interaction with advertisement is simply a bad idea leading to bad commercial practices.

It’s true. People need to be careful about sharing personal information on the web. Once it is published it will never go away. So there is a clear responsibility for a user to think about what he wants to share online and what not. But there also lies a responsibility for the networks that stimulate sharing. There is a responsibility for those that exploit our data, our interactions commercially. And companies that exploit our data, our photos, our interactions without specific consent or knowledge of the user are simply evil.

Nice try with this post SiliconAngle. But two falses do not make a right. It just makes it more wrong.

A User-Centric Web needs brand agnostic service providers

You are the most important brand

A User-Centric web is by design a brand agnostic web when it comes to identity. There is only one brand, and that is you.

The current web causes different types of problems that can be lead to possibly 2 design flaws. The first one is that it is a document-centric web. Read this excellent post by Chris Messina and Jyri Engström here.  The second one, maybe caused by the first flaw, is that business models evolved and became network-centric. In other words current business models enforce that services focus on scale before user-value. Traffic, usage and numbers are more important than individual user value.

As a result we get customer lock-in (which idiot came up with that term), walled gardens, an unhealthy attention to scale and growth, identity wars (who gets to own you), data lock-in, social graph ownership (Facebook owns your relationships and interactions), etc., etc. It’s a slippery slope we can’t get off easily. There are patches to this mess (e.g. OpenID), but that’s all they are right now. OpenID doesn’t fundamentally change the web, unless it becomes embedded in a User-Centric web.

OpenID provides us convenience. We can now register/login to services using existing accounts we have at Facebook, Gmail, Twitter and so on. OpenID in that sense patches the problem of having multiple identities/profiles across different services. The problem with that patch however is that it still locks me into one of those main services (Gmail, Facebook, Twitter).  There lies a danger with OpenID. Even though it is set up with the right intentions, it might end up keeping the current web alive, instead of helping us move to a User-Centric web. If my identity becomes my Facebook account, I’m not very likely to leave that service. For OpenID to help us move to a User-Centric Web we will need independent identity providers.

If we were to design a User-Centric web, then I would prefer that the “user” part is separated from the “services” part. In other words, my identity, my home base, my relationships, the data that flows through that. It should all be under my own control. To accomplish that we would either set that up ourselves, or for those that don’t know how, create service providers that can take care of that for us. These service or identity providers would have one purpose only, to serve me and my data. Think of it as a bank where I store my online presence safely. They would only have one business model. Provide me service and I would pay for that value. They would only compete with other identity service provides in that user value. We can’t let companies like Facebook or Google take care of our identity, as they are in the business of making money off of my identity and interactions.

Once that is take care of, I can join services, meet friends, interact, do all the things I can do now, but I would be in control of my own online identity. I can decide how much of me a service, or a friend can see. I could lock it down like fort Knox, or open it up like the biggest Social Media fan. There are no portability issues, I can’t get locked into a service anymore. As my online presence is separated from the actual service, I can simply move to another service and have all my friends (data) available there. A service becomes a possible channel through which I can interact. Companies will become true service providers, instead of traps I can fall into. The would compete on user value instead of network value. There is certainly demand for such a setup.

It’s a simple idea, turning things inside out. It isn’t simple to get there though. As long as we keep ourselves trapped in the current web business models we will never reach a tipping point. All we do is dig a hole and lock ourselves in beautiful walled gardens with cute “openX” patches while Facebook, Google and other big companies keep exploiting our online identities and interactions commercially.

Building a People-Centric web is a fight for a lost cause

Don Quixote, Image taken from Wikipedia

A number of posts drew my attention this week. First, 2 respectable media outlets explain us that the Facebook exodus has started. While I am not a big fan of Facebook (its their business model I don’t like), both the NY Times and the Guardian are writing sensational yet unfounded stories about the start of the downfall of Facebook. From the NY Times:

Things fall apart; the center cannot hold. Facebook, the online social grid, could not command loyalty forever. If you ask around, as I did, you’ll find quitters. One person shut down her account because she disliked how nosy it made her. Another thought the scene had turned desperate. A third feared stalkers. A fourth believed his privacy was compromised. A fifth disappeared without a word.

Based upon the evidence of five people leaving Facebook the exodus has started? In the very next paragraph the author already kills his own headline:

The exodus is not evident from the site’s overall numbers. According to comScore, Facebook attracted 87.7 million unique visitors in the United States in July. But while people are still joining Facebook and compulsively visiting the site, a small but noticeable group are fleeing — some of them ostentatiously.

A Facebook exodus is a slight overstatement, especially now that Mark Zuckerberg announced that Facebook has passed the 300Mn active users and is now free cash flow positive.

Granted, I’ve predicted a few times that Facebook usage would decline myself, and I was wrong too. My assumption, that the Facebook business model stands in the way of your online friendships, turns out to be incorrect. While I’m worried about the network-centric approach that sites like Facebook take, putting the value of the network growth over the value that an individual user gets, the user doesn’t care. They play around, have a great time, and as a byproduct ensure that the different advertisement schemes and virtual goods that Marks sells them make Facebook a cool $ 500+ Mn a year.

It’s something that I find hard to accept. To me, online relationships are no different from real life relationships when it concerns friends and people I have met in real life. We would never accept Mark Zuckerberg holding up billboard displays of hot and sexy girls in our face, while we are having a good time at a friends house. Yet that is exactly what Facebook can do online. It’s called targeted advertisement. I tend to think that’s BS. Sex sells, but there is nothing targeted about that.

What I find more disturbing is that the Facebook business model forces them to exploit our profiles, our friends, and our interactions commercially. We get a free service, and in return we get Big Brother watching us every day. Facebook has great privacy preferences (hidden away carefully), but even the ultimate guide to Facebook privacy can’t tell me where that one switch is that protects me from Facebook.

But why am I complaining. 300Mn people beg to differ. They don’t care about all of that. I may think that we are losing something precious here, our individuality and a personal control over our own online lives. That we are locking ourselves in and don’t care about it. Human nature at its best. The rest of the word just doesn’t care.

Chris Messina and Jyri Engström have written a great post on the People-Centric Web (I have always called it a User-Centric web). But it’s fighting for a lost cause. It’s Don Quixote and Sancho Panza fighting windmills. The dominant web business models are based upon the exploitation of our data, our interactions. And unless that changes, unless users are willing to pay for the value they get, that business model will remain to be dominant. Having People-centric technology and services isn’t good enough. They are useless without People-centric business models. Mark Zuckerberg proves that. Sadly, that also means that we will never be truly free or in control of our own doings on the web. But who gives a shit about that?

The difference between a good and a great entrepreneur

Michael Arrington provides good insight into a current dilemma for Twitter. Should Twitter turn revenues on or keep them off? The dilemma being that a revenue-less but growing company will lead to speculative valuation and therefore possibly a high acquisition price. A company with revenue however will be valued on an X-factor related to the revenue being generated.

While it may be a real dilemma for Twitter I feel it is precisely this attitude which makes Silicon Valley sometimes look like a big bubble of nothingness. We’ve heard this story so many times. Entrepreneurs or investors answering questions about revenue for a web company with “we don’t know yet”, or “we are still thinking about it”. Companies being successful because they show incredible growth, instead of sustainable profits. It’s unbelievable that so much money is invested into companies that (seem) to have the arrogance to assume that growth can come first, and thinking about revenue later.

Don’t get me wrong, there is nothing wrong with thinking about, or even discovering revenue streams, while you are building and growing the service. And I obviously do not know if Twitter is not thinking about revenues every day. But I do object to the attitude that anything that grows can be turned into revenue, or that thinking about revenue can be done later. What’s your business model? “Eh, well, we are still thinking about it, but we are probably worth millions if you want to buy us!”

Growing a company is the easy part, especially with all the web 2.0 tools that are available now. There are countless ways of driving traffic to your service. If you are able to provide value, then you can be sure that you can also grow your service. But growth in itself is no reason to assume that sustainable profitability is also within reach. They are entirely separate challenges, only bound by the one common denominator that drives both, user value. Should Twitter do advertisement, subscriptions, API fees, mobile? These are questions the company should be asking itself every day. Growth is not a business model, getting acquired isn’t one either.

Silicon Valley thrives partially because of its opportunistic nature. It’s a great strength but also a big weakness. If a company is created with the sole purpose of getting acquired, then there isn’t really any value creation. Unfortunately it still seems to be the most common ‘business model’ in the online world. All it really does is move investment money around. It doesn’t add any money to the ecology, there is only losses to be made. There is no value creation, merely destruction.

Unfortunately there is always an old-school ‘wanna be cool’ company that is willing to acquire and pay for the mess. Everyone happy, even the acquirer, until he finds out that the economic rules that he has to live by in the real-world also apply in the online world. If you want to be profitable you need sustainable revenues.

If you own a grocery store you may think about opening another store. I’m guessing you will calculate, look at growth and profit, and after countless of days without a lot of sleep take the decision to do it. But not some of our cool web entrepreneur with enough money made in earlier ventures. They just start something for the sake of it. Let it grow for a while, and see where it goes. If it fails, no big deal, just try something else, or even better, sell it to the next sucker that wants to give it a shot. BTW, I’m obviously not talking about you, but about that other guy.

Trying  many different ventures, or creating growth without sustainable profit doesn’t make you a great entrepreneur. It’s your ability to grow something into sustainable profitability that makes the difference. Because that is the real hard part. The rest is just play.

Growth and traffic are no guarantee for a profitable online business

Side effects of using steroids

37Signals has a great post up, entitled “The bar for success in our industry is too low”. The author, Jason, takes several examples where respectable media (NY Times, GigaOM) take a story of a web company showing growth, traffic, and revenue and present it as a success. A quote from his post:

Let’s erase one claim right off the bat. The headline, “Using ‘Free’ to Turn a Profit”, is misleading and downright false as it relates to the subject of the story. Near the end of the piece Phil Libin, the chief executive of Evernote, says they are generating about $79,000/month in revenue. Then the article goes on to say “By January 2011, Mr. Libin projects, the company will break even.”

$79,000/month and they won’t break even until January 2011. So every day they’re losing money until 2011. And the title of the piece is “Using ‘Free’ to Turn a Profit”. What? How can the Times let a headline like this slide?

Jason points out something I’ve always disliked about current web practice. There is too much attention on growth, and too little on revenues. A company that shows impressive growth rates is successful, a company that doesn’t is a loser. Traffic and eyeballs, it’s so web 1.0. I thought we passed that phase, but when measuring the success of a company, or by just following the money that gets invested, I bet that a large fraction is still invested in growth. Iow in a future perspective of revenue. Jason:

This pattern — “success” based on forecasted future success instead of current success — shows up all over the tech-business press. Instead of metrics like “they make more money than they spend” we see stuff like “user count growth” and “followers” and “impressions” and “friends” and “visits” qualify success. Whenever you see someone piling big numbers into made up metrics, it’s a diversion. They want you to think that this time it’s different. But like Judge Judy says, “If it doesn’t make sense it isn’t true.”

Growth is necessary for any business to be sustainable. Web 2.0 and social media technology are steroids for growth. Connecting one big network to another, creating a third. It’s dead simple.

This relentless focus on growth masks the one thing that is important for any business. It’s web 2.0’s biggest tragedy. Do you provide enough value to turn that value into revenue? It’s easy to generate growth using web 2.0 social media technology. Everybody does it. But while the whole world is chit-chatting and sharing away with each other on all these networks, there are very few companies that are able to turn that into a profit. A total waste of resources, energy and focus. Enough talk already, we need to focus on value! What is more valuable? A company with millions of users, strong growth rates, but no revenue? Or a company like SmugMug, that doesn’t have millions of users, but a couple of hundred thousands of real fans. Each of which is a paying customer, turning it into a very profitable company?

This is something I struggle with every day (as CEO of Glubble). We are a small company. We do not have the industry standard impressive growth figures the way big social networks like Twitter have (although we are quite satisfied with our current growth rate). But we wonder every day how we can provide users value and turn that into a sustainable revenue stream. Instead of growth first, we focus on value first.

Is that a better strategy? We believe so. We are generating sustainable revenue now, we are showing good growth in revenue too. But we are not profitable yet. And we are aware of that every day we go to work. We have investors that help us reach that phase. But the trick is that no investor can really do that for you. It’s your own users that help you become profitable. Your product or service needs to be providing so much value that a user is actually willing to pay for it.

Growth fetishists never discuss this openly. They focus on growth and constantly give us impressive stats. There is a whole industry that ironically makes a profit by stilling our hunger for growth figures of other web companies.

All this does is take away attention from the hard part of the online business, generating sustainable and profitable revenue through user value. We don’t see revenue reporting in the online business. The reason isn’t secrecy. It’s simply because most companies do not generate enough revenue to be profitable (makes you look like a loser right?).

We haven’t implemented Facebook connect yet, we do not have connections to 50 other networks. Because it wouldn’t help us. We need do the hard part first. We need to get our service right. Our users are enjoying it, but we know we can do better.  We are now relentlessly focusing on improving the user experience and the value we provide. When we reach a point where we, and our customers, can feel really proud about the service, we will turn on some of these growth machines. But we will know that it will then lead to sustainable growth, both in users and revenue, instead of an impressive nr of page views.

About leveraging the Facebook platform successfully for your business

Push vs pull

Yesterday I read a post by Jesse Stay entitled “Hey businesses, you’re using Facebook wrong”.  Let me start off by saying I have a lot of respect for the author. I think Jesse is right about the power that Facebook can bring in the interaction between your brand and a customer. However, I don’t agree with the ‘reasons why’ provided.

Let’s look at some quotes (I’ll provide my own thoughts below):

Now, let’s get a little deeper.  Facebook Connect, with the help and just a few hours time of one of your own coders, can take your existing database of users and find out how many of them are already Facebook users.  My bet is most of them are (remember, there are near 300 million Facebook users on the planet!).  Now you can prompt those users to begin telling their friends about your brand to their closest friends and relatives, using just the tools Facebook provides, ALL ON YOUR OWN WEBSITE. Oh, and even better – unlike Twitter, your users never, ever, leave your website when authenticating with Facebook. You simply won’t get that intimacy between your brand and customers on Twitter.

I reread this part a few times in order to see if I understood it correctly. I read “Brand intimacy is defined by people never, ever leaving your website.  Your ability to prompt them to start discussing your brand with their closest friends, ALL ON YOUR OWN WEBSITE”. While the mechanics may be correct (you can get access to lots of relevant user data), the brand intimacy part feels all wrong (see below).

Twitter pales in comparison to what Facebook can do for businesses. The majority of businesses are just using Facebook wrong.  If you manage a business’s marketing or brand management campaign and only have a Facebook Page, YOU’RE DOING IT WRONG.  The power of Facebook isn’t about Facebook itself, but about the vast set of APIs Facebook is providing to you and your business to get your brand into the most valuable place of all – that intimate setting between a customer and their close friends and family.  You can’t do that with Twitter.  You can with Facebook.  This is why if Twitter is worth $5 billion, Facebook is worth at least 2 or 3 or more times that. Your business needs to get in and use Facebook right if you’re going to stay ahead of the game.

The essential message seems to be “The power of Facebook, [… stuff deleted…] , is providing to you and your business  to get your brand into the most valuable place of all – that intimate setting between a customer and their close friends and family”. This is definitely a marketers wet dream. However, if executed poorly I fail to see how forcing your brand into that relation is worth anything. It would backfire and create damage that cannot be restored easily.

There are a lot of comments on the post, here is a reply that the author writes to one of the comments. I isolated this comment because I don’t agree with the observation it starts with:

John, Businesses don’t care about clutter. They care about what makes them money. The fact is the intimate connections Facebook Connect fosters when compared to Twitters are a far cry from the connections that can be facilitated through Twitter. If you know how to hit that sweet spot through Facebook, you’ll make much more than you do on Twitter. I speak through experience, with proven results. Twitter has its place, but as far as revenue goes, you’ll have far greater success on Facebook for pure revenue, so long as you do it the right way, which includes a proper utilization of Facebook Connect.

After reading the entire post I ended up feeling that Jesse is mixing up mechanics and opportunity (leveraging the Facebook platform) with execution (being successful). I could very well misinterpret what he meant. My personal view is that brand intimacy isn’t reached by locking in your users. It isn’t reached by prompting your customers to discuss you brand with their friends. Positioning your brand between a customer and their close family and friends is putting a very larger commercial burden on the most important relationship in life,  family and friends.

It’s true that Facebook has your customer’s social graph. It can open this (privacy sensitive) information to 3rd parties. Just because you can get your hands on that information doesn’t imply that you can leverage that to your advantage.  The fact that Facebook provides the infrastructure and data doesn’t make your instantly successful towards those that visit your site, or their family and friends.

Before you can create a sustainable revenue-generating business you need to focus on user value first. Make sure the users that visit you and your site receive so much value that they will voluntarily return. Wouldn’t that be more powerful than locking them in? Make them love your service or product. If you can do that, then connecting that experience to Facebook makes sense.

But then that experience will be user-driven, adding value for the user. You won’t push your brand into a customer’s intimate network of family and friends. They will voluntarily pull your brand into their network. It’s the difference between web 1.0 and web 2.0, walled gardens and open networks, brand display and brand engagement, customer lock-in and customer freedom, push instead of pull.

Maybe that is what the original post was really about. I would have agreed in full then. Brands do not dominate communities because they force their way in. Brands dominate because they get pulled into that community. And Facebook can help strengthen that pull effect, once it is there. But somehow that message got lost for me in the “leverage the Facebook platform to grow and make revenues” message.

On Facebook, status updates, retweets, and the universal law of signal versus noise

Maybe we should consider to rename this ‘social media’ era into the ego broadcasting era. That thought struck my mind when reading a WSJ post entitled ‘How Facebook ruins friendships’. The author discusses her fatigue with friends that send her nonsense status updates:

Like many people, I’m experiencing Facebook Fatigue. I’m tired of loved ones—you know who you are—who claim they are too busy to pick up the phone, or even write a decent email, yet spend hours on social-media sites, uploading photos of their children or parties, forwarding inane quizzes, posting quirky, sometimes nonsensical one-liners or tweeting their latest whereabouts. (“Anyone know a good restaurant in Berlin?”)

She goes on with a number of other observations, but what strikes me about the article are some of the comments that readers disagreeing provided:

[Ditto – If you’re annoyed by the stream coming from your friend, hide it. The tools are there for you to use the offering as you like. No need for a national call to change the world and how it’s citizens interact with social media. Seriously.]

[I couldn’t agree more. She could have tweaked her privacy settings in about three minutes and solved all the stuff she’s ranting about in this column.]

I’ve seen this type of reaction a lot. Go into Twitter or Friendfeed and complain that you find the service less valuable because of the amount of noise involved, and tons of people will not address your basic feeling about the service, but instead will provide a million ways to slice and dice the streams to your needs.

The problem in my opinion isn’t a setting. We (the participants) share so much crap about ourselves and the things that we find relevant in a context where it is fairly useless, that no algorithm can possibly distinguish the signal from the noise. My problem with ‘status updates’ and shares in general is that when they are automated or non-intentional they become irrelevant. This stream of non-sense is fueled by the ‘coolness’  of social media. Every self-respecting social media site now offers at the very least 10 different ways of publishing and sharing your status updates to all relevant sites and networks. We are told where people are and what they are doing, often without them even telling us this in person.

The underlying thought is that status updates are helping us to interact. This is true of course. If anything social media has brought us interaction. But in our eagerness to centralize something (conversation) which cannot/shouldn’t be captured in one place we create an overkill of status update streams jumping off in all directions, hoping that at some point it all comes together again.

Besides their basic value offering services like Disqus (sorry Fred Wilson 😉 ), Backtype, Brightkite, Twitter, Facebook, Friendfeed etc.etc., all provide options to publish your stuff outside the context that it was relevant in, or reel it back into yet another place. And that makes the noise go up and the signal go down.

This puts the pressure on the receiver of this mess (that would be you and me). I need to use complicated settings to scale down the conversation, find the signal in the noise. I need to choose my friends carefully, subscribe to one feed and delete the other. I have to ignore 90% of what passes by in order to find that 10% that’s really relevant to me. It’s all my own doing off course.

I don’t think so. It’s yours. The day you decided to become a broadcaster instead of a friend you took the wrong turn. The day you decided it would be cool to share everything about the most important thing in life (you) was the day that all the noise became a relevant factor. You are not responsible for people subscribing to your broadcasts, but you are responsible for the crap that you send around. Why become a slave of the status update and the retweet? Why broadcast, when you can actually interact? Why automate the things you do in life when a well intended personal message provides 10x the value.Why not think before you act?

I think it’s the reason why well known technology evangelists like Robert Scoble and Fred Wilson are reducing the nr of people they actually follow on services like Twitter. Being followed is a broadcast thing, it is good for your ego. Following the right people provides meaning, it increases the signal within the noise. (on a side note, Scoble is often accused of creating noise which I think is ridiculous given the role he plays in the industry. I bet his private/personal stream aimed at real friends would look quite different from his public one. (Update: TechCrunch just posted: Twitter’s golden ratio (that no one likes to talk about), ties in nicely with this post)

The status update and retweet are mostly a publishers tool. They have little to do with interaction or friendship. A status update or retweet become twice as valuable when you have intent. Add an explanation why you are retweeting, aim a status update at your audience, instead of yourself. Imagine the nr of servers out there needed to store all that noise. You can probably reduce the planet’s carbon waste by 10% by turning of the servers that store and send out copies of copies of copies of status updates. It’s one of the reasons I believe the noise we are creating will be handled by scaling down the conversation.

We can invent real-time search, intelligent (trust, content, friend) filters, and whatever technology we want. But there is one universal law that will always apply. Crap in is crap out. And by writing this post, I just may have added some crap to that big pile too.

How friend recommendations can make or break trust

Lonely Planet

Friend recommendations are becoming increasingly important in commercial transactions. They come in different forms using different technologies. The thought behind them is simple. When someone you know endorses (‘likes” is the buzz word nowadays) some advertisement/product/service/brand you will be more likely to trust that opinion.

Recommendations come both explicit and implicit. Facebook tested both forms. Beacon wasn’t a big success. The “Charlene just bought product x in store y” was a bit too explicit for most. They have now moved to a more implicit form called Social Ads. We are now all co-stars in the their advertisement production. When you see a brand or service advertisement it might have references of friends “liking” it.

Facebook social ad taken from http://www.marketersstudio.com/2007/12/facebook-social.html

This phenomenon started with the success of comparison sites and maybe best know with Amazon’s book reviews. We don’t trust companies or brands selling us stuff, so instead we turn to the opinion of the consumer. The drawback of those methods is that you can never be sure if a good or bad review was written by a competitor, the seller, a genuine consumer, or just a plain idiot. By making it more personal, adding people you know into the mix, trust should go up.

New technologies will allow more sophisticated forms. Real-time search (well, we should really say near real-time, but that doesn’t sound quite as snappy), augmented reality. Services like Yelp, Friendfeed, Twitter, Lattitude and the ultimate social database of Facebook. They will all be concentrating on getting you and your friends linked to advertisements/products/services/brands. Whether it is about finding a good restaurant in the vicinity, reading a blog, buying a book, downloading music, friending someone online. At some point in the process you will get either explicit (“Alexander liked Coupa Cafe“), or implicit (“John, Peter, and Alexander are now in Coupa Cafe, drinking a coffee”) recommendations from friends.

I’m sure it will be a big commercial success, but I don’t like it. There are 2 main reasons for this:

1. It turns my online experience into a bad copy of the . Its great at first, but after you find out that half the planet already visited that one tiny little restaurant deep in the jungle before you did, it is all of a sudden not so exciting anymore. Part of any adventure is that you do your discovery yourself (even if half the planet did that discovery before you did). Spoiling the end by revealing it  isn’t always very exiting.
2. If a recommendation is not explicit, it will easily destroy the trust I have in an opinion of someone I know. Sharing needs to be a conscious and intentional act to be meaningful. Consider the difference between these two forms. “Alexander visited/liked Coupa Cafe” versus this dialogue. Tom: “Hi Alexander, do you know a great place for coffee?”.  Alexander:”I went to Coupa Cafe yesterday. They have excellent coffee”. Which recommendation form is more effective do you think? The first one is implicit and unconscious, therefore meaningless (try reading 500 of these). The second one is intentional, and even more important, called for.

I see both things already happening every day. Just look at a typical Twitter, Friendfeed, or Facebook stream. It’s full of implicit, unintentional and uncalled for advice, getting in the way of the relevant stuff. This form only works with people that consistently try to be an active part in sharing recommendations. When it becomes an unconscious process quality and trust deteriorate fast.

Maybe we should take a different direction with this whole implicit recommendation stuff. If the main reason for this is commercial, why not turn the process around entirely? It’s simple really. Stop providing me unsolicited recommendations. If I need something I will ask for it. If you then provide me with the best offer I’ll take it. It’s the ‘looking for’ section of eBay. I want to know a good restaurant in the vicinity. Give me a local auction site where I can ask that question. Any restaurant nearby can respond, using not only great offerings (30% discount on curry dishes tonight), but also my friends recommendations (“Tom and Jeff liked the vegetable curry). This would be the optimal form. It’s explicit and called for!

Important characteristics for a social operating system

A Borg cube (image taken from http://www.startrek.com)

Facebook is quickly making moves to become a web platform, a social operating system if you will. This is not something unexpected. Already in 2007 there were people thinking about a social operating system (see here, here, here).

Nova Spivack wrote a good post, entitled “The Rise of the Social Operating System”, and specified what he felt a social operating system should contain:

• Identity management (open portable identity, personal profiles, privacy control)
• Relationship management (directory and lookup services, social networking, spam control)
• Communication (person to person, group, synchronous, asynchronous)
• Social Content distribution (personal publishing, public content distribution)
• Social Coordination (event management, calendaring)
• Social Collaboration (file sharing, document collaboration etc)
• Commerce (classified ads, auctions, shopping)

It’s a good list. And it is obvious that Facebook is trying to encompass most of this list so that they can become the de facto social operating system on the web.  Facebook started as a directory lookup service and added social networking and communication features from the start. They added identity management and privacy controls (although I can never find the one switch that protects me from Facebook itself). Facebook users upload a staggering amount of photos and video’s and with the acquisition of Friendfeed Facebook intents to play a huge role in real-time search and social content aggregation/distribution. Using Facebook connect users can now get access to thousands of web sites using their Facebook identity. And the phenomenal growth of Facebook is taking it to the regions of mass communication portals.

It looks like Facebook holds the best cards to become the social operating system on the web. In its current form I think this would be disastrous for the web and its users. My biggest objection to this is the fact that Facebook currently exploits a business model that prevents them from becoming a great social operating system. Facebook’s business model is advertisement based, and that is a recipe for customer lock-in. It prevents them from becoming truly user-centric. Or as Doc Searl puts it, Facebook is the Borg.

A social operating system not only needs to encompass the specs that Nova describes, but imo it also needs other important characteristics:

• It needs to be distributed, and it should be open source. This has numerous advantages. It make the purpose of the operating system verifiable, allows for community and 3rd party development. And it makes the operating system less vulnerable for massive security (phishing, identity, data) attacks.
• It needs to be User-Centric, the sole purpose for the Social Operating System is to be just that. An operating system serving its users and their social needs.
• It’s underlying business model needs to be User-Centric too. In other words, the business model should be based upon delivering user value, nothing else (e.g. advertisement based models). Monetization should take place on top of the operating system, not within.  This separates the need to create revenues from the need to build the best social operating system possible. It also ensures the user and his data are safely under the user’s own control.
• The user needs to be in control of his data (follows from the system being user-centric) and his identity. Privacy controls should be implement in a virtual bank-like structure where only the user has access. The user then gets to decide what others can see and what not.  This would create a much more balanced demand – supply relationship between users and 3rd parties.

I’m interested to hear your opinion on this. What characteristics do you think a social operating system should have?

The lock-in of Facebook takes away our freedom

A pretty walled garden

Facebook is quickly becoming the biggest platform in the world. I have a serious problem with that. I don’t mind Facebook becoming a successful and profitable platform. I do mind that their current scale lets them dictate what the web will look like for all of us.

Facebook is getting its tentacles into areas far beyond their original focus, connecting people. Instead of a walled garden site they are quickly becoming a walled garden platform. They are now big enough to compete with anything on the outside. Either by copying (Friendfeed) or just plainly buying any possible successful innovative company (did I mention Friendfeed already?). It’s like a big black hole sucking everything in, and never letting it out again.

And now there is the possibility of a Facebook browser (mentioned here, and here). It’s a smart move backed by some very powerful and smart people. Building a new browser is hard, but the real hard part is getting it distributed. And that is where Facebook can now play a big role. It’s got some 300M users, becoming a possible powerful distribution source for new services. A browser, tailored to the needs of Facebook users would make sense. It would likely distribute fast across the Facebook platform.

I’m troubled by the idea that 300M+ users in the near future might not realize there is a web beyond that of Facebook. I do not like the idea of one huge Facebook dictating to us what the web will look like. It’s the biggest walled garden out there, and there seems no stopping its growth.

I think that is the main reason why people tend to find Google more sympathetic than Facebook. While Facebook tries to redefine the web to its own platform, forcing both users and developers in, never letting them out. Google adds value to each part of the web, and in most cases tries to open it up as far as it can for its users and developers. Google’s walled garden is the planet and beyond, Facebook is the walled garden, Big difference.

Facebook has become a much more powerful and penetrated platform than AOL ever was. But I hope this growth will stop. I don’t want a single company to decide for me what the web looks like. I want an ecology of companies competing and cooperating, making our experience better and better. Without asking us to give up the one thing that is precious to us. Our freedom.

Facebook is the biggest walled garden there is. I think it’s big enough already, what do you think?

My 2 cts on Facebook buying Friendfeed

So Facebook buys Friendfeed? It’s all over the bloghosphere. Here’s the announcement. Initial consent seems to be that it was inevitable, and that the Friendfeed crowd is now worried about the continuity of the service.

My thoughts? I think this proves that Friendfeed never had a real business model (other than get bought).  The smartest (ex-) Googles build super smart technology, but didn’t have a clear view on how to make money with it. If they did, would they have sold out to Facebook? I somehow doubt that. These aren’t your average entrepreneurs that live on a couch, no money in the bank. They are well known, well respected engineers/entrepreneurs. I doubt they have a short term cash need. Selling Friendfeed to Facebook makes me think that they didn’t have a clear view on how to scale Friendfeed, nor on how to make a revenue engine fire up.

That’s not necessarily a bad thing. The Friendfeed team has done amazing things with technology. But the question that remains in my head is, what makes Facebook so sure that this technology all of a sudden will generate revenue now that they can add scale to it? Is scale alone enough to make things work? I don’t think so. There must be an underlying value or need that makes a service or technology create value for its users. Friendfeed has great technology but not enough value to scale on its own (we’ll never know now).

Facebook does’t care about Friendfeed imo. They just bought themselves a brilliant engineering team. That’s way more important than the service itself. I hope it will work out for the Friendfeed team. Google once did the same thing with Jaiku. I wonder how these guys are doing now? Are they running the show at Google’s Android/Wave developments? Will Bret Taylor and Paul Buchheit become the real-time engineers for Facebook? Or will they slowly fade away in a huge organization? Only time will tell. Congratulations to them on a great deal though!

Another thought that comes to mind is this crazyness over real-time search. I think it is taking on ridiculous proportions. Real-time search will be a nice new feature set in search. it’s  not going to replace anything. And once everyone is on Facebook, Twitter, spilling his guts. What do you think the next gen will do?

Knowing things before they actually happen, now that would be cool!