Tag Archive for 'Innovation'

How to build a billion dollar company

Matt Mullenweg made an excellent comment on a topic I’ve often thought about. The comment was made in the context of the anniversary of wordpress.

Has it really been seven years since the first release of WordPress? It seems like just yesterday we were fresh to the world, a new entrant to a market everyone said was already saturated. (As a side note, if the common perception is that a market is finished and that everything interesting has been done already, it’s probably a really good time to enter it.)

WordPress not only has become the most popular blog software and one of the most amazing content management systems around, but its become an amazing platform for innovation. (For example, Ron Kurti and I the other day tried to think outside-of-the-box for employee expense reports at Vast. So we hacked a wordpress blog to do so – and we could do it in minutes of effort.) Not only that, but the wordpress.org founder built a company around the software and it’s become a very successful company on the web. Thank God he entered at a time of market saturation.

But it doesn’t stop there. Consider the following stories as well, which highlight lessons in building amazing companies.

  • When Google launched as a search engine, everyone though the space had matured and had little opportunity. Google has now become one of the most influential companies in history.
  • When Apple launched the iPod, the MP3 player market had been well established. No one at the time would have thought another product from this yesteryear company, would be the product that help it reinvent the company to become the second largest US company today.
  • When Facebook launched, it was yet another social network well after Friendster (the inventor) and MySpace (the populariser). In fact, I remember analysts calling 2003 the year of the social network – a year before Facebook was even invented. And now, Mark Zuckerberg has created a company that will transform online advertising, has helped contribute to the new billion dollar virtual goods industry, and is going to lead the charge for the semantic web.
  • In 1990, hyptertext systems had saturated the market since the 1960s when Ted Nelson coined the term. That didn’t stop Tim Berners-Lee, who that year invented the web – yet another hyptertext system. The Web is not a company like the ones above, but the Web is in league that few inventions in the history of the humanity have ever achieved.

Naval Ravikant has told me that in the consumer web space, the first mover advantage is so great that a company can own the space – the logic being they are so far ahead in execution and their brand is synonymous with the industry, that they become impossible to topple. This fact is why I think a lot of entrepreneurs in the Internet space seem consumed with creating a business that introduces a new concept product, as opposed to a better product – which is what the above companies did..

I think there is something to be to be said about the last mover advantage: monitor the patterns of something new, innovate on the implementation, and then out-execute the guys that invented the concept. And out execute you can easily, as the inventors are probably caught up in organisational inertia due to conflicting innovations, not to mention a misunderstanding of what actually made them successful in the first place.

As it was said once: the guy who invented the first wheel was an idiot; but the guy who invented the other three was a genius.

Phil McKinney talks innovation to the Startup Bus

With all the hype now on the iPad (and the proposed HP slate), I thought it was timely to mention the personal session with HP’s head of innovation a few weeks ago. As part of the Startup Bus, Phil McKinney gave us a one-hour session on innovation, which we are fortunate enough to have recorded and have permission to share to the world.

Hewlett Packard was the company that started Silicon Valley, and Phil is one of the three divisional CTO’s at the company, focused on personal systems (meaning a lot of the innovative things that we will see come out are under his watch). So it was a no-brainer to start our experience there. He shared secrets of innovation, including some insight into yet-to-be released products by HP, like it’s electronic-ink paper that kills anything else in its class and the proposed Slate device itself (an iPad competitor soon to be released).

You can watch the entire presentation as part of this playlist. Or, click on the videos below which are in ten minute blocks.

Part one: Introduction
Part two: The Rules of the Bus
Part three: The Challenge of Innovation
Part four: The Secret Sauce – FIRE
Part five: The Secret Sauce – PO
Part six: Show and Tell
Part seven: Q & A
Part eight: Q & A (continued)
Part nine: (continued)

This blog post is a series on the Startup Bus, an event that occurred in March 2010 that was powered by Alassian, mentored by the eStrategy Group and supported by several other very generous sponsors.

Do entrepreneurs have an expiry date?

Startup’s that are built-to-flip (ie, sold early on) may be the best and dominant way to sustain innovation. How so? Because through observation of the brilliant people I’ve met in technology startup world, I’ve come to realise an important lesson: entrepreneur’s have an expiry date.

I just don’t care any more
I started writing this post sitting in my parents living room last week in Sydney, where I visited for the Christmas break to spend time with family. Chatting away with my parents, my father said something very startling but also very relevant. He was talking about his 73 years of life and the 47 years he’s had as a lawyer. Once a fiery dragon in the courts and of life, he’s now an aged playboy winding himself down. He said he’s thinking of giving it up and going into retirement, as he has been working these last few years purely for the passion. Why quit now, I asked: “I just don’t care anymore”.

I’ve got countless anecdotal examples (but none I can share specifically here, sorry). People I thought that were pushing to create global businesses, are now giving way to other priorities and looking to sell their very valuable company. People who have been involved with a startup for over four years, that’s only now exploding in growth, but feeling fatigued and ready to move on.

It’s not just entrepreneurs
A good friend of mine who has worked for five years at a big bank, is now looking for a change in employer. Several other friends, who have been in long-term romantic relationships for around 3-5 years, are now feeling the pressure of making a decision: get married or stop wasting her time. And sometimes it’s not them making the decision – but it’s what she’s probably thinking.

Passion, fire and ambition is needed to start something – whether it be a new job at a big brand company, a new company that disrupts the industry, or a partner that reinvigorates your life. But like life itself, there is a predictable pattern that follows. What gets born will also mature – and will die, one day. It’s just how life is; what goes up, will go down as well.

Build to flip: it’s a good thing
Bringing this back to the point of this post, I want to highlight that the obsession to build a sustainable business is actually not a normal thing. And I said obsession, because a few years ago I made a naive plea that that was the only way. Now that I’ve seen more, I’ve realised it’s a way but not the common way.

People that create businesses are creative. The same reason that makes them creative, is also the same reason that has them get bored when a process gets repeatable. The types of personality that start a company and battle during its pre-revenue days, are vastly different from the ones that help grow and manage a profitable business.

So the next time people criticise a company that doesn’t stay the course towards an IPO, and let’s itself get bought out – just remember, that sometimes, it’s because the people behind them just don’t care anymore. And that’s perfectly alright. Don’t fight it – it’s how it is.

The information age is still filling up its rocket with fuel

Today, the Wall Street Journal published an article by a fund manager who suggested the Internet is now dead in terms of high growth. While I can respect the argument from the financial point of view (although he’s still wrong), it also shows how widespread and unsuspecting even the educated are for the transformation the Internet is preparing us. Yes, ladies and gentlemen – we ain’t seen nothing yet.

But I won’t get into the trends right now that are banging around my head, making me willing to change careers, country and life to position myself for the future opportunities. Let’s instead start with his core thesis:

The days of infinite margins, 1,000% productivity gains, and growth of market throughout the universe are long over. Internet companies now should be treated, at best, like utility companies that get bought at about 10 times earnings and sold at 13 times earnings. Even then, I’m not sure I would give the Internet sector the same respect as the monopoly-protected utility sector.

I am glad that was said, because this is more of a world-wide problem we have, that has lead us into the Global Financial Crisis (GFC). The ridiculous false economy generated over decades of speculative growth – where fundamental asset values were supported by unreal cash – is something we need to stop. The best thing the GFC has taught us, is that valuations need to be supported by independent cash flows with markets not manipulated to inflate their true value. And I can’t wait to see the technology sector (who along with their partners in crime in banking and property) use some basic accounting skills, and come to the rude awakening that, in the real world, that’s how things roll.

Where he is wrong however, is in the innovation that is creating new ways of generating revenue. More importantly, what we are seeing is a stabilisation in technologies invented half a century ago. The Internet and hypertext (the web is an implementation of a hyptertext system) have all been in development for 50 years – and it’s only *now* that we are coming to grips with the change. So to say this is a fad that’s now over, is really ignoring the longer term trends occurring.

As identified in the article, the biotech market will be massive, but I was told by the head of the PwC Technology park Bo Parker in March 2009 that it’s only just resembling Information Technology in the 1970s. However, when in comes to information, things are ramping up for a lot more as the industry has had a lot more time to evolve.

Where do I see things going? Oh man, let’s get a beer and talk about it. Data portability, Semantic Web, VRM, Project Natal, the sixth sense, augmented reality – try that to get your imagination started. I call it the age of ubiquity: ubiqitous connectivity, ubiqitous computing, ubiqitous information – where we have those separate things accessible anywhere and everywhere and when combined will change our lives. Information and communications, after all, are a fundamental aspect of being human that underlie everything we do – and so its impact will be more broadly applicable, obvious, and transformative.

Where’s the money in that? Are you kidding me?! The question is not how many dollars these changes can generate, but how many new industries will they spawn. We seriously don’t know what’s about to hit us in the next two decades for information technology, and clearly, neither do the Fund Managers.

Google Wave’s dirty little secret

google wave logoGoogle has announced a new technology that is arguably the boldest invention and most innovative idea to come out in recent years for the Internet (full announcement here).

It has the potential to replace email, instant messenging, and create a new technical category for collaboration and interactivity in the broadest sense. However hidden in the details, is a dirty little secret about the practicality of this project.

Google Wave is transformative, but it also is a technical challenge. If adopted, it will entrench cloud computing and ultimately Google’s fate as the most dominant company in the world.

The challenge in its development
For the last two years, the Google Sydney office has been working on a “secret project”. It got to the stage where the office – which runs the Google Maps product (another Sydney invention) – was competing for resources and had half the office dedicated to developing it. So secret was the project, that only the highest level of Google’s management team in Mountain View knew about it. Googler’s in other parts of the world either didn’t know about it, or people like me in the local tech scene, knew it was something big but didn’t know what exactly.

However although I didn’t know what exactly it was, I was aware of the challenge. And basically, it boils down to this: it’s a difficult engineering feat to pull off. The real time collaboration, which is at the core of what this technology provides, requires computationally a huge amount of resources for it to work.

It needs everyone to use it
Although we are all digging into the details, one thing I know for a fact, is that Google wants to make this as open as possible. It wants competitors like Microsoft, Yahoo and the entire development community to not just use it – but be a big driver in its adoption. For collaboration to work, you need people – and it makes little sense to restrict it to only a segment of the Internet population (much the same like email). Google’s openness isn’t being driven out of charity, but pure economic sense: it needs broad-based market adoption for this to work.

federation_diagram_fixed2

Only few can do it
However, with lots of people using it comes another fact: only those with massive cloud computing capabilities will be able to do this. Google practically invented and popularised the most important trend in computing right now. A trend where the industrial age’s economies of scale has come to play – reminding us that there are aspects of the Information Economy that are not entirely different from the past. What Google’s Wave technology does, is give a practical application that relies on cloud computing for its execution. And if the Wave protocol becomes as ubiquitous as email and Instant Messaging – and goes further to become core to global communications – then we will see the final innings to who now runs this world.

Wave is an amazing technology, and I am excited to see it evolve. But mark my words: this open technology requires a very expensive setup behind the scenes. And those that will meet this setup, will be our masters of tomorrow. Google has come to own us due to its innovation in information management – now watch Act II as it does the same for communications.

Why we should support movie piracy

Across the entire developed world, you will see piracy warnings from the entertainment industry. They usually make some emotive video about piracy costing jobs (because of six billion dollars in lost revenue) and that you as a consumer should join the fight. But is this really the case? I think laziness is what is costing jobs. Executives are clinging onto an old way of doing things in a new world, and instead of exploring alternative mechanisms, they fight for the past. I think if the industry lets go a bit, they might actually improve the status quo.

Let’s have a look at the movie industry and see the difference.

Piracy: it's a crime
Currently
Hollywood studio invests in the production of “The man with a Blog”. They have an all star cast, filled with James Bond action scenes and circus freaks.

Movie theatres around the world premier the movie, after months of publicity. Box office sales smash the predictions in that weekend – millions of dollars are spent by people buying movie tickets. Several months later, a DVD version is distributed, giving a second hit at having consumers spend their cash on experiencing this masterpiece. Television networks several years after that will license the movie and play it on TV.

Money continues to stream in – it’s a model that’s worked for decades.

Pause: two important things to note
Unlike reading a blog, for example – where your attention can wander and not be fully engaged – a movie has the full engagement of the consumer. They’re absorbing every sound and image being presented to them. So engaged are the consumers that people will rewind the movie to rehear a line they missed. They will pause the movie if they need to go to the bathroom, for fear of missing out on a scene.

Another thing to note is that the consumer is having an experience. Even if they “own” a copy of the movie, all they are truly buying is a license to replay the movie in the convenience of their homes. When a consumer buys tickets or a DVD to a movie, what they are really buying is access to an experience that can provoke them intellectually and stimulate them emotionally. Beyond stimulating an individual, it also serves as a cultural tool in our society, allowing people to have shared experiences that can then allow them to relate to each other – like how two strangers laughing over a movie will create a bond.

Replay
So why can’t movies be free? And if they were, who are they hurting? Let’s now replay the blockbuster described above and see the difference.

Hollywood studio invests in the production of “The man with a Blog”. They have an all star cast, filled with James Bond action scenes and circus freaks.

Movie theatres around the world premier the movie, after months of publicity. Box office sales smash the predictions in that weekend – millions of dollars are spent by people buying movie tickets who are paying for the experience of being in a room of people laughing with premium surround sound, a premium screen, and an excuse to snuggle up with their first date. Several months later, a DVD version is distributed, giving a second hit at having consumers spend their cash on experiencing this masterpiece – consumers will pay for the DVD because they like to store their movies on a shelf for reuse. Downloading the movie over the computer eats their bandwidth and storage space, and while some will do it, the value proposition of a physical storage item still exists. Because although they can download a medium-quality movie over their connection – they might want to one night experience a high quality version on their big plasma TV. So they will willingly pay for that DVD, which in bandwidth terms, is a hell of a lot cheaper.

Movie theatre

Television networks several years after that will license the movie and play it on TV. Because at the end of the day, if other people are going to generate revenue on your assets, they should continue to seek licenses to do so. Sharing a movie to other consumers should not be a crime, but showing it to mass audiences where you take the full sales, is.

Money continues to stream in – it’s a tweaked model that honestly don’t affect the world that much. Or jobs in the industry, other than the lawyers.

Fast forward
The movie industry is under-exploiting two essential characteristics I mentioned above: the undivided attention of the consumer and the fact they generate an experience for consumers. In the old world, that’s what advertising agencies were paid for to achieve!

I’ve previously argued that online advertising is a bubble economy, but that’s not to say advertising is dead. If fact, brand advertising is something I expect to thrive, and something like a movie is the best opportunity to take advantage of it.

Movies are replaying our lives, in a real or fantasy way. They are a replication of life, with consumer products filling the screen just like they do in our lives. When I watch my favourite actor talking in a scene, I am taking in the visual experience – and allowing product exposure to my attention. If I see a funky piece of furniture in that room, I should be able to interact with that – like clicking on it for more information and perhaps even create a direct order to buy. Television networks have spent decades monetising movies by showing advertisements in between regularly scheduled breaks (which disrupt the experience). Why not make advertising an embedded experience during the movie? It’s non intrusive and it’s relevant – a much better way of doing it.

Every time someone clicks on a table in a movie, the movie studio gets a cut out of the sale. Indeed, the supply of the table in the movie could also come as a form of premium sponsorship, as the studio is promising the supplier guaranteed exposure to an audience. The exact reason why people advertise: exposure to an audience.

Taking it a step further, we haven’t even got to explaining brand advertising opportunities. Imagine if your favourite actor is wearing a new style of jeans – isn’t that going to influence your thinking? Even if we consciously don’t think much of the jeans, the experience of being in a happy state watching our favourite actor, generates an emotional bond with that consumer product. It’s doing what advertisers have spent decades trying to master: building an emotional connection and a need with a new product.

The scenes that have been cut out
What I’ve just done here, is made you realise that movies can still be sold despite being free – but people will happily pay for it as they are really buying a unique experience. The actual movie itself should be free for consumers and there is untapped opportunity to innovate in this sphere.

There is an Israeli startup that allows you to embed advertising in a movie. What’s the big deal about that? Well every time someone downloads the movie, they will get an updated ad. So the original publisher can actually control the content for an entire lifetime: once an ad has been inserted, it can simply be replaced with the newest advertiser to sign up.

Imagine if movie studios distributed free versions of their movies, with commercial breaks like TV – and an option to pay to remove those ads for those willing to do so. And imagine, if with a bit more research, technology could be evolved so that scenes within a movie showcasing consumer products, could be updated with a new product. The painting on a wall can now be replaced with another painting. It’s already being done for computer games – why not movies, that themselves now rely on computer generated graphics?

When thinking of the opportunity in that way, restricting access to that movie is no longer in the studio’s incentive. With an audience, you monetise more by having a bigger audience. And so making something free, actually could make more money because demand will not be affected by price elasticity.

Illegal movies

La Fine
Once you think about things in this light, you realise the enormous opportunity available. And hopefully, you too also realise that what’s holding us back from this innovative, less-obtrusive, higher-value-generating future – is outdated thinking. Because as long as we cling onto the past, we are preventing bold strides into new models that potentially will make more money, if done right.

It’s a bold statement to say that you should support movie piracy, but it’s actually forcing the industry to adapt to this new world. Piracy has made us reevaluate the value of movies when the distribution line can no longer be fully controlled, and continuing to do it forces our legislators to reconsider public policy on intellectual property that was made for another age.

Using pirated material isn’t costing jobs in the entertainment industry – it’s doing something much better. It’s getting some media company executives in trouble, as they haven’t got the guts to innovate.

Commercialising innovation

Today I attended Vibewire‘s e-festival of ideas, which was done in conjunction with the Australian Innovation Festival. Gavin Heaton had asked me to speak about one of the Cs of innovation, which was commercialisation (the others being creativity, collaboration, connections, and conversation).

I had some great discussions with people there and it’s great to see so many passionate people share ideas about building a better future. The video was streamed online – hit play on the video embedded below and enjoy. (I come in at the 17 minute mark.)

Advertising on the Internet needs innovation

On the weekend, I caught up with Cameron Reilly of the Podcast network , and he was telling me about his views on monetising podcasts. It got me thinking again about those things I like to think about: how content can be monetised. Despite the growth in online advertising which is tipped to be $80 billion, I think we still have a lot more innovation to go with revenue models, especially ones that help content creators.

Advertising is a revenue stream that has traditionally enabled content-creators to monetise their products, in the absence of people paying a fee or subscription. With the Internet, content has undergone a radical changing of what it is – digital, abundant, easily copied – whilst the Internet has offered new opportunities for how advertising is done. However, the Internet has identified the fundamental weaknesses of advertising , as consumers can now control their content consumption, which allows them to ignore embedded advertising altogether. Content on the other hand, still remains in demand, but means of monetising it are slipping into a free economy which is not sustainable. I make that point to illustrate not that professional content creation is a sunset industry – but rather there’s a big market opportunity as this massive industry needs better options.

time mag

"Hey man, there’s this new thing called the Internet. Sounds pretty cool"

One of the biggest innovations in advertising (and enabled by the Internet) is of contextual search advertising. This has been popularised by Google, which now makes 98% of its $17 billion revenue from these units. This advertising dominates online advertising (40% of total) because of its pull nature, whereby key-words stated by a consumer in effect state their intention of what they are interested or would like to purchase. Whilst this is a highly efficient form of advertising, it also has its weaknesses – for example, it is not as effective outside of the search engine environment. Google makes 35% of its revenue from the adSense network , where these contextual ads are placed on peoples personal websites. Evidence from high traffic bloggers suggests they barely make enough money through this type of advertising. Another point to consider is that aspects of the Google network include significant partnership agreements like the one with AOL which accounts for 10% of Googles revenue (this is a 2005 figure which has likely changed, but Google does state in their 2007 report "Our agreements with a few of the largest Google Network members account for a significant portion of revenues derived from our AdSense program. If our relationship with one or more large Google Network members were terminated or renegotiated on terms less favorable to us, our business could be adversely affected.". AOL most recently reported for Q1 2008 half a billion dollars largely from search advertising ).

Other attempts at creating more efficient advertising which have existed for over a decade, have come in the form of profiling or behavioural tracking. However, these forms of advertising has also highlighted the growing awareness of consumer privacy being eroded, and is under heavy scrutiny by activist groups and government. Facebook is a company that is best posed to deliver new forms of advertising because of the rich profiling data it has, but it itself has faced massive backlash .

My view is that the majority of online advertising for successful individual publishers at least, has largely come from traditional approaches to advertising – a masthead blog with a sales team that uses display advertising. How effective this display advertising is is debateable with widespread banner blindness and consumer control over their content, but it would appear that this is more a case of advertisers seeing this as the least bad on the overall scale of opportunities. The fact it replicates the mass media approach of number of unique consumers viewing the content, and not the types of users, means this isn’t anything new other than being done in a digital environment.

Digital content is in need of a better monetisation system.
Targeted advertising is the most efficient form, yet consumer privacy is a growing force preventing this. What we need, is not a new advertising technology, but a new way of thinking about advertising – in a way that can help the content economy rather than riding on it without giving benefit. Contextual advertising sounds great in theory as it calculates key-word frequency of words on a website, to match it to a key word ad – but it’s proving in practice these ads are not very relevant. Yet trying to think of a smarter way to advertise, may be the wrong question – perhaps half the problem itself is advertising as a concept?

perspective

Are we running down a tunnel, only to find there is nothing there?

Content which comes in the form of news (historical and breaking), analysis, and entertainment can be monetised via a persons attention or through a transaction (ie, subscription, fee, etc). Both this approaches have different barriers.

– Attention: The key driver is increased dollars per unique person, over a period of time. The barriers to this approach is the challenge of identifying the individual in a way that gives advertising that is highly relevant and will result in a conversion. In other words, privacy privacy privacy.

– Alternative payment: Requiring consumers to pay for content is a barrier due to the paid wall. What is more problematic for digital content, is that the ability to replicate it freely makes it not just easy to do for the masses but has created a culture of if it’s not free, it’s not worth purchasing unless its really necessary. There needs to be a strong value proposition for a consumer to purchase content, and in the absense of a brand and marketing, the restriction of what value the content offers is a barrier for consumer demand as they don’t know what they are missing out on.

So as you see above, content creators are in a difficult position. Charging people reduces their opportunity unless they are really established, but even then, due to the digital environment they don’t have any control over subsequent distribution (with rampant piracy). Yet advertising is fraught with being irrelevant and hence not effective (so advertisers go to other forms) and any attempts to make it more relevant, gets held back by the concerns of privacy advocates (and rightly so). Whilst the Internet parades itself as an advertising growth machine, it’s growing in new areas but not the old areas that have traditionally been the medium for advertisers.

This advertising growth is largely being driven through utility computing products that aim to make information retrieval more efficient (ie, search). However, the growth for the content creators, is not happening. As Cam was telling me, in a market like Australia – small content organisations like TPN and Bronwen Clune ‘s Norgs , don’t have access to the big end of town for a sales team. And he didn’t have to tell me, those Google ads for the smaller guys, are not enough to pay the bills. That small to middle end is not being really catered for.

But before you jump on the phone and create some mid-tier advertising network that caters for a niche, think about the real problem: content creators need a better solution to monetise their content. But advertisers also need a better way of selling, other than some slick-talking sales person who can sell ads on pageviews (a broken model with weak alternatives ) They need advertising that is suited for their product, but the market now includes other products media outlets never had to compete with like marketplaces now happening online and utility computing products. Whilst the technology community obsesses about search , let’s also remember we have yet to see a new way to monetise content that is superior to the old world. Contextual advertising of text is the latest new thing area, but that technique is nearly a decade old. As I prove above, outside of the search environment, it is showing to not be that effective.

Where is the innovation going to come from? Not through technology but with a new paradigm shift like how content creators operate . New ways of thinking about the way we ‘sell’ like what the VRM Project is challenging. But perhaps more fundamentally, is an understanding that the holy grail of targeted advertising has got a speed hump called privacy – and that may actually be a sign of not going faster towards better targeting, but changing the vehicle all together.

It’s all still alpha in my eyes

The invention of hypertext has been the most revolutionary thing since two previous technologies before: the printing press and the alphabet. Combined with computing and the Internet, we have seen a new world represented by the World Wide Web that has transformed entire industries in its mere 19 15 year existence.

The web caught our imagination in the nineties, which became the Dot-Com bubble. Several years after the bust, optimism reawakened when the Google machine listed on the stock exchange – heralding a new era dubbed “web2.0”. This era has now been recognised in the mainstream, elevated by the mass adoption of the social computing services, and has once again seen the web transform traditional ideas and generate excitement.

davewiner
The web2.0 era is far from over – the recent global recession however has flagged though that the pioneers of the industry are looking for something new. As the mainstream is rejuvenated by web2.0 like the Valley was not that long ago, it’s time to now look for what the next big thing will be. Innovation on the web is apparently flattening. Perhaps it has – but the seeds of the next generation of innovation on the web are already here.

Controversy of the meaning of web2.0 – and what its successor will be – should not distract us. We are seeing the web and associated technologies evolve to new heights. So the question is not when web2.0 ends, but what are we seeing now, that will dominate in the future?

My view:
• The mobile web. The mobile phone is now evolving into a generic entertainment device, becoming a new computing device that extends the reach of the internet. First with the desktop computer, and then with the laptop computer – new opportunities presented themselves in the way we could use computers. The use of this new computing platform will create new opportunities that we have only scratched the surface.
• The 3D web. Visit second life, the virtual world, as you quickly note the main driver of activity is sex and that it’s just a game. However, porn and games have spearheaded a lot of the innovation of technology in the past. The 3D web is now emerging with four separate but related trends: virtual worlds, mirror worlds, augmented reality and lifelogging.
• The data web. Data has now become a focus in the industry. The semantic web, eventually, will allow a weak form of artificial intelligence that will allow computer agents to work in an automated fashion. Vendor Relationship Management is changing the fundamental assumptions of advertising, with a new way of how we transact in our world. Those trends, when combined with the drive for portability of peoples data, is having us see the web in a new light with new potential. Not as a collection of documents, and not as a platform for computing, but as a database that can be queried.

So to get some discussion, I thought I might ping some smart people I know in the industry on what they think: Chris Saad, Daniela Barbosa, Ben Metcalfe, Ross Dawson, Mick Liubinskas, Randal Leeb-du Toit, Stewart Mader, Tim Bull, Seth Yates, Richard Giles as well as you reading this now.
What do you think is currently in the landscape that will dominate the next generation of the web?

What is the DataPortability Project

When we created the DataPortability workgroup in November 2007, it was after discussion amongst a few of us to further explore an idea; a vision for the future of the social web. By working together, we thought we could make real change in the industry. What we didn’t realise, was how quickly and how big the attention generated by this workgroup was to be. A press release has been released that details the journey to date, which highlight’s some interesting tidbits. What I am going to write below, are how my own thoughts have evolved over the last few months, and what it is that I think DataPortability is.

1) Getting companies to adopt open, existing standards
RSS , OpenID , APML , oAuth , RDF , and the rest. These technologies exist, with of which have been around for many years. Everyone that understands what they are, know that they rock. If these standards are all so great – why hasn’t the entire technology industry adopted them yet? Now we just need awareness, education and in some cases pressure on the industry heavies to adopt them.

2) Create best practices of implementing these standards
When you are part of a community, you are in the know, and don’t realise how the outside world looks in. Let the standards communities focus their precious energies on creating and maintaining the technologies; and DataPortability can help provide resources for people to implement them. Is providing PHP4 support for oAuth really a priority? It isn’t for them – but by pooling the community with people that have diverse skillsets and are committed to the overall picture, it has a better chance of happening.

3) Synthesise these open standards to play nice with each other.
All these different communities working in isolation have been doing their own thing. An example is how Yadis-XRDS are working on service discovery and have a lacklustre catalogue. Do we just leave them to do their own thing? Does someone else in Bangalore create his own catalogue? (Which is highly likely given the under-exposure of this key aspect to groups needing it for the other standards, and the current state its in). Thanks to Kaliya for mentioning that the XRDS guys have been more then proficient in working with other groups – "how do you think their spec is part of the OpenID spec?". Julian Bond goes on to say: "Yadis-XRDS is only months old and XRDS-Simple is literally days old…Having trouble thinking of a community that is working in isolation. And that isn’t likely to be hugely offended if you suggested it. " So let me leave the examples here, and just say the DataPortability Project when defining technical and policy blueprints, can identify issues and from the bigger picture perspective focus attention on where it’s needed. By embracing the broader community, and focusing our attention on weaknesses, we can ensure no one is reinventing wheels .

4) Communicate all the good things the existing communities are doing, under the one brand, to the end user.
RSS is by far the most recognised open standard. Have you ever tried explaining RSS to someone who is outside of the tech industry? I have. Multiple times. It’s like I’ve just told them about the future with flying cars and settlements on Mars. I’ve done it in in the corporate world, to friends, family, girls I date, guys I weight train with and anyone else. Moving onto OpenID – does anyone apart from Scoble and the technorati who try all the webservices they can, really care? Most people use Facebook, Hotmail (the cutting edge are using Gmail) and that’s it. On your next trip to Europe ask a cultured French (wo)man if they know what OpenID is; why they need it; what they can do with it. Now try explaining RSS to the mix. And APML. And oAuth. Bonus if you can explain RDF to yourself.

Wouldn’t it be just easier if you explained what DataPortability is, and explained the benefits that can be achieved by using all these standards? Standards are invisible things that consumers shouldn’t need to care about; they just care about the benefits. Do consumers care about the standards behind Wi-Fi, as defined by Zero-conf – or do they care about clicking "enable wireless" on their laptop and them connecting to the Internet. If you are going around evangelising the technical standards, the only audience you will get are the corporates in IT departments, who couldn’t care less. The corporate IT guys respond to their customer/client facing guys, who in turn respond to consumers – and consumers couldn’t care less on how its done, but just what they can do. Have the consumer channel their demand, and it benefits the whole ecosystem.


The new DataPortability trustmark

It has been said the average consumer doesn’t care about DataPortability. Of course they don’t – we are still in the investigation phase of the Project ; which later on will evolve to the design phases and then evangelising phases. We know people would want RSS, oAuth, and the rest of the Alphabet soup – so lets use DataPortability as a brand that we can communicate this. Sales is about creating demand – lets coordinate our ‘selling’ to make it overwhelming – and make it easy for consumers to channel that want in a way they can relate to. You don’t say "oAuth"; you say "preventing password theft" to them instead.

5) Make the business case that a user should get open access to their data
Why should Facebook let other applications use the data it has on its servers? Why should google give up all this data they have about their users to a competitor? Why should a Fortune 500 adopt solutions that decentralise their control? Why should a user adopt RDF on their blog when they get no clear benefit from it? Is a self-trained PHP coder who can whack something together, going to be able to articulate that to the VC’s?

The tech industry has this obsession that nothing gets done unless the developers are on board. No surprises there – if we don’t have an engineer to build the bridge, we are going to have to keep jumping off the cliff hoping we make it to the other side. But at the same time, if you don’t have the people persuading the people that would fund this bridge; or the broader population about how important it is for them to have this bridge – that engineer can build what he wants but the end result is that no one will ever walk on it. Funny how web2.0 companies suck at the revenue model thing : overhype on the development innovation, with under-hype on the value-proposition to the ordinary consumer who funds their business .

Developers need to be on board because they hassle their bosses and sometimes that evangelising from within works; but imagine if we get the developers bosses bosses on board because some old bear on the board of directors wants DataPortability after his daughter explained it to him (the same person that also told him about Facebook and Youtube). I can assure you, as I’ve seen it first hand with the senior leadership at my own firm, this is exactly what is happening.

Intel is one of the best selling computer-chip companies in the world. Do you really think as a consumer I care about what chip my computers works on? Logically – no. But "Intel’s Inside" marketing campaign gave them a monopoly, because end consumers would ask "does it have intel inside?" and this pressure forced Intel’s customers (IBM and the rest) to actually use Intel. Steve Greenberg corrects me by saying "The Intel Inside campaign came a decade after Intel took over the world. It wasn’t what got them there. It was in response to Microsoft signaling that they liked AMD. Looked like AMD was going to take off… but then they didn’t". So my facts were slightly wrong, but the point still remains.
At the same time, it isn’t just political pressure but its also to educate. I genuinely believe opening up your data is a smart business strategy that will change the potential of web services.

You make people care by giving them an incentive to do it (business opportunities; customer political pressure; peer pressure as individuals and an industry which later evolve to industry norms). The semantic web communities, the VRM communities, the entire open standards communities – all have a common interest in doing this. DataPortability is culture change on an industry wide level, that will improve the entire ecosystem. Apparently innovation has died – I say it’s just beginning .