Tuesday, February 20, 2007

Core Characteristics of Web 2.0 Companies:

Nice Article from Tim O’Reilly on web 2.0 - must read! Here are the key principles that need discussion:

1. These companies provide services, not packaged software, with cost effective sclability

2. The companies only exert control over unique and hard to create data sources, but enrichment occurs as more people use them

3. Web 2.0 companies trust their users as co-developers

4. Web 2.0 companies harness collective intelligence

5. Thes companies leverage the long tail through customer self-service

6. Software above the level of a single device

7. Offers lightweight user interfaces, development models and business models.

Principle 1: Web 2.0 leverages customer-self service and algorithmic data management to reach out to the entire web, to the edges and not just the center, to the long tail and not just the head. Example - Doubleclick vs. Overture and Google

Principle 2: The value of the software is proportional to the scale and dynamism of the data it helps to manage. Similarly a service automatically gets better the more people use it.
Many examples - Google vs. Netscape, Akamai vs. BizTorrent

Principle 3: Network effects from user contributions are the key to market dominance in the Web 2.0 era.

Saturday, February 10, 2007

Value and Wisdom of the Crowd

Some nice entries from Kareem Mayan's Weblog.

1. "The value in media will be in companies that will grow audiences, not in companies that control content" - Vinod Khosla, Sun Founder/Venture Capitalist

2. "The best way to build a business is to help other people make money" - Rick Skrenta, Topix.Net

3. " A lot of our successes don't have anything to do with anything our executives thought were a good idea." - Sergey Brin, Google Founder

4. ""eBay has 150M customers, in the nicest terms, that's 150M people who have learned to trust strangers." Pierre Omidyar

5. ""We thought that anybody who came to a concert had equity. They took part in the creation of the music." - Mickey Hart, Grateful Dead

If web2.0 is about consumer empowerment, each of these need to be thought through carefully and fleshed out. More later.