Monthly Archive for May, 2008

The Web 2.0 Startup Scale: from “Hatchlings” to “Borgs”

Published
by
Jon
on May 29, 2008
in Technology
. 2 Comments

There are literally thousands of Web 2.0 startups in existence today.

Directories like Go2Web20.net do a pretty good job of cataloging all these companies and services, but has anyone ever cataloged these Web 2.0 companies into tiers, based on different factors like their reputation, monetization potential, buzz, and so forth?

Well, since Google wasn’t able to find me anything, here I propose my own Web 2.0 Startup Scale:

Tier 1 - Hatchlings

You have only recently transitioned your service from a closed Alpha to an open Beta with little fanfare. You are likely a 2-3 man operation working from a bare office or even your mom’s basement, but you are full of optimism and convinced that your new startup idea will change the world. Even if what you are doing has been done before, you strongly believe you can do it better.

Reputation: What reputation? You may have been lucky enough to have gotten a mention here or there on startup blogs such as KillerStartups and StartupSquad, but in general, only your friends and/or a small community of people know about your Hatchling startup. A few Web 2.0 evangelists and serial early adopters in silicon valley may have heard of your startup before, but they may not have tried it yet. Your friend’s mom has never heard of your service before.

Adoption: You have less than 100 registered users, which includes mom, dad, and all of your personal friends. If you are lucky, one or two of your registered users is an evangelist, and will write about your startup in his blog.

Buzz: Your startup will never be mentioned on either FriendFeed, Twitter, Techmeme, Digg, Reddit, or Slashdot. However, if you are lucky, you may get mentioned on TechCrunch.

Monetization: You may or may not have a business plan in place to make money. However, it’s waaaaay too early to talk about monetization now. Let’s get more users first!

Mulligans: You can involve your early adopters in the process of helping to improve the service during this (perpetual) “Beta” period. But you better not screw up majorly, or else your ADD early adopters will drop you faster than you can say “Ruby on Rails”.

Examples: Shoplette, ShowNearby, Name Your Wang (I’m not kidding)

Tier 2 - Local Sensations

Your Local Sensation startup has survived the first six months to a year, and is beginning to build up a loyal community of users. Some people recognize the value of the service you are providing, but you either still have a ways to go to unseat the leader in your space, or your startup concept is so niche or so new that many people have been slow to sign up. Most of your users are either part of the Silicon Valley echo chamber or are geographically located in the country in which you are based.

Reputation: For the particular service you provide, you are recognized as a player in this space, but not the leader. Your startup may only be well known only in the country in which it is based. Your startup’s name is recognizable by roughly half of the Web 2.0 evangelists and early adopters, but almost none of your friends outside of the IT industry. Your friend’s mom has never heard of your service before.

Adoption: You may have anywhere from 1000 to 10,000 active registered users, most of which are based in your home country. Some Web 2.0 evangelists and early adopters may use your service for a bit to see if you are bringing anything new to the table.

Buzz: Your startup may be mentioned once or twice on either FriendFeed, Twitter, Techmeme, Digg, Reddit, or Slashdot. You are likely to have been mentioned on TechCrunch or other Silicon Valley evangelist blogs like Robert Scoble’s or Louis Gray’s.

Monetization: You may or may not have a business plan in place to make money. However, it’s still waaaaay too early to talk about monetization now. Let’s get even more users first!

Mulligans: If your startup is unstable and shows scalability or usability problems at this stage, it’s game over. Most early adopters will not bother giving you a second chance and will jump ship to your competitor instead.

Examples: Polyvore, SharedCopy, Twine

Tier 3 - Big Fish

Your startup becomes a Big Fish startup when it has survived it’s first anniversary or two, and is growing its community of users rapidly - perhaps even at a global scale. Everyone recognizes the value of the service you are providing, and this is probably the first time in a long while where you can slightly sit back and relax (but not too much). Your startup continues to acquire users through introducing innovative features that your competitors do not have. By now, your startup must have its own Wikipedia entry. This is also probably when you shed your “Beta” label.

Reputation: For the particular service you provide, you are recognized as one of the strong players in this space, but may not necessarily be the leader. Your startup’s name is recognizable by all Web 2.0 evangelists and early adopters, and some of your friends outside of the IT industry. Your friend’s mom has never heard of your service before.

Adoption: Most Web 2.0 evangelists and early adopters are using your service, at least for a while to try it out and compare with other services in this space. As do some of your curious non-IT friends, who wonder what you are working on all the time on the weekends. You may have anywhere from 10,000 to 100,000 active registered users using your service.

Buzz: Your startup may be mentioned once or twice a month on either FriendFeed, Twitter, Techmeme, Digg, Reddit, or Slashdot. You definitely have been mentioned on most of the standard blogroll of Silicon Valley evangelists. At this stage, you will do anything to create Buzz for your startup in order to progress into the next tier. Your Big Fish startup may also begin to be involved in acquisition rumors.

Monetization: You may or may not have a business plan in place to make money. You are starting to think about ways you can begin to monetize your sizabe community of users.

Mulligans: You have built some credibility with the community, and would probably be able to survive the backlash from some unannounced downtime. However, do it too often, and your users will simply jump ship to your competitor, who may be the market leader in your domain.

Examples: Digg, FriendFeed, Jaiku, Reddit, Techmeme, Yelp

Tier 4 - Alpha Dogs

An Alpha Dog startup has likely been around for at least 2-3 years, and is generally recognized as the best-of-breed service in it’s class. If you are a founder of an Alpha Dog, you can start looking for an exit strategy and pretty much retire and live comfortably on the killing you can make from the sale of your startup. However, your pride and ego may force you to miss your exit window, and instead you go all-in and attempt the risky jump into the next tier.

Reputation: For the particular service you provide, you are recognized as the undisputed leader in this space. Your startup’s name is recognizable by all Web 2.0 evangelists and early adopters, and most of your friends outside of the IT industry (except for a handful of your accountant and lawyer friends). Your friend’s mom has never heard of your service before.

Adoption: All Web 2.0 evangelists and early adopters are using your service, as are most of your friends. Political figures will use your service in an blatant attempt to connect to the “young and hip” generation. You may also begin to notice a cottage industry of complementary services or applications sprout up which makes your startup a de facto “platform”.

Buzz: Your startup will be mentioned daily on either FriendFeed, Twitter, Techmeme, Digg, Reddit, or Slashdot.

Monetization: You may or may not have a business plan in place to make money. However, even if you do, you may have difficulties in executing your monetization strategy to its full potential, and thus you will likely be only slightly cashflow positive, if not still in the red and surviving off VC funds.

Mulligans: You can afford a screw up here and there and some downtime, as long as you are sincere and transparent in dealing with your user community. You are an Alpha Dog - you’ve earned it!

Examples: Digg, Facebook (last year), Friendster (in 2004), MySpace, Twitter, YouTube

Tier 5 - Borgs

A Borg can’t really be called a startup anymore, since it has likely been around for at least 4-5 years. Although you may have smaller competitors, the service you provide is basically indispensable for a huge percentage of people who use the Internet. You are in a position to consider buying and assimilating smaller companies into your hive. If you have not IPO’ed or sold out to a rich media sugar daddy yet, you can do it basically anytime… and on your own terms.

Reputation: Not only are you recognized as the undisputed leader in your very important domain, your brand name may even start showing up in lists of the world’s most powerful brands. Your startup’s name is recognizable by all Web 2.0 evangelists and early adopters, and all of your friends, including the accountants and lawyer. Your friend’s mom may have heard of your company name before, because it was spoken by one of the characters in her favorite day time soap opera.

Adoption: You don’t know anyone who hasn’t used your service before. Your company or service name may commonly be used as a verb in colloquial speech.

Buzz: There is rarely any buzz about your company on either FriendFeed, Twitter, Techmeme, Digg, Reddit, or Slashdot, because your company is already too well known. Evangelists don’t like to talk about you as much anymore because they consider you mainstream and boring. However, in the rare occasion when your company does get mentioned on Slashdot or Digg, 30 pages of fiery discussion will surely follow.

Monetization: You have a solid business model and a steady stream of revenue coming in. Your Borg is making you oodles and oodles of cash.

Mulligans: You can easily survive PR nightmares - even to the extent of having your company’s direct actions result in some poor bloke going to jail for the rest of his life. Who cares about the community? I am indispensable, biatch!

Examples: Amazon, eBay, Facebook (next year), Yahoo, and Google (of course)

Observations and Conclusion

Do you agree with these categorizations?

Assuming that the scale above is realistic and is more or less accurate, here are a couple of my basic observations:

  1. As long as you produce a quality product or service, it is quite easy for you to get to Big Fish status in a very short amount of time. FriendFeed, which only launched three months ago, is one good example.
  2. Even when you are at Alpha Dog status, you may still have problems generating consistent revenue.

So what tier does your startup belong in? :)

Do Startups Stand a Chance on the Open Web?

Published
by
Jon
on May 26, 2008
in Technology
. 7 Comments

Last Friday morning, I had an opportunity to visit somewhere I normally wouldn’t go and met with a couple of cool people and had some very good conversations around Web 2.0.

We talked about many things, ranging from services like Twitter and FriendFeed to discussions such as naming all the ways that Web 2.0 properties can make money.

We also had an interesting discussion around Scoble’s conspiracy theory of a bi-polarized online world, led by Microsoft’s purchase of Facebook and Yahoo and keeping everything closed. In that unlikely (IMHO) scenario, it’s almost like half of the useful Internet is kept behind a hypothetical Microsoft walled garden, versus the other half, which is openly searchable, and mashable, led by Google and social networking aggregators such as FriendFeed.

Thankfully, neither of us actually thought or hoped that scenario would happen, and we agreed that a vast, free, and open web (like what we mostly have today) remains the best option for consumers in general.

However, that led to yet another interesting question that was posed to me: Because the open web is so vast and big and populated with so many other services and properties that do the same thing, how difficult is it for a new fledgling startup to compete with the rest of the open web for users and advertising dollars?

Well, my response was simple: In this day and age, any innovative and quality startup stands an excellent chance of being noticed. And once the right people notice your startup, the users and monetization will surely follow.

The reason is simple.

We have so many channels at our disposal today which makes it easy to get the word out and help others discover your content or service. Embarrassingly easy.

If I was a startup anywhere in the world, I am probably at most 2-4 degrees away from the “Great San Fransicso Echo Chamber” using tools like Twitter, FriendFeed, and even Facebook. And once you are in that echo chamber, your traffic should spike tenfold.

This is not even counting the dozens of niche channels you have at your disposal, such as specialty forums, blogs, content aggregators, or even sincere direct e-mail.

And the good thing is, not only are you desperately trying to get your word out, there is a cottage industry of social media evangelists who are desperately trying to discover new things as well. A match made in heaven indeed.

If you remember, the analogy in the year 2000 is that the Internet is like Yellowpages - in theory, everyone has a possibility of visiting your site, but only if they flip to the right page.

Eight years later, I would say that the Internet is like a Borders book store. If you are an author, you can easily get thousands of people to notice your book, but only if you know the right Borders staff who is arranging the display table next to the entrance.

And you know what? I bet things will only get easier in the future. I’m just waiting for behemoths like Microsoft, Yahoo, Google, or even Facebook to start incubator programs where a startup will be (somehow) guaranteed a certain amount of traffic and publicity and other perks, in exchange for a percentage of their eventual revenues for a certain period of time. And they will make the sign up process as simple like AdWords, so that it’s going to be like one-click venture capital.

So if you are an aspiring startup today, your top priority should be focusing on making your startup “innovative” and “quality” before your public beta. Because if your service is crap, not only will people not promote you all the way to the echo chamber, but even if they do, you won’t be able to retain your early adopters.

Like in Field of Dreams, if you build it, they will come. Just make sure you give them a reason to stay.

Top 10 Tagging Best Practices for Anything Web 2.0

Published
by
Jon
on May 22, 2008
in Technology
. 4 Comments

The nice thing about having a fledgling blog like mine with a readership in the single digits is that I can pretty much make wholesale changes to my blog and most people won’t notice a thing. And since tonight I had a couple hours to kill, I decided to clean up and revamp my Wordpress Tags and Categories.

Like any resourceful latecomer to the blogging game, I googled for other people’s tagging best practices. Perhaps because tagging is such a nebulous and subjective art, there was not a lot of information I can find besides a couple useful articles by Ian Beck and Nick Santilli. The most common advice is to be consistent, which I totally agree. Second most common advice is to find something that works for you. Umm… OK, I’ll try.

With tagging so prevalent in anything web 2.0 today, my goal is to find a tagging system or best practices which not only can be applied to blogs, but other things as well, from personal file organization to social bookmarking.

With that, here are my Top 10 Tagging Best Practices for Anything Web 2.0:

  1. Be consistent. This rule is so important that it needs to be repeated here again. Whatever happens, pick a system and stick to it.
  2. Always use lower case letters. No exceptions. And spaces and hyphens are the only punctuation that I will use to separate different words in a phrase.
  3. Use nouns whenever possible. I always prefer “stupidity” to “stupid”, and “developer” or “development” (depending on the context) over “develop”.
  4. Try to limit the use of abbreviations. Although the goal is to make the tags as succinct as possible, I will still expand out abbreviations unless they are universally recognized either as a brand (like IBM or HP), or an industry buzzword (SOA or GTD). Ambiguous abbreviations such as KM or PR I will expand them out as “knowledge management” and “public relations” respectively. The only exception is for extremely long abbreviations like “tokyo international anime fair”, in which case I will use the shortened form “taf”, since the abbreviation is used frequently to market the event as well.
  5. Tag important company and brand names. If my blog entry (or article I’m submitting to a social bookmarking site) talks about any companies, I will include them as tags. The only exception (based on my discretion) is if the company was only mentioned in passing as an example and is not central to the main idea of the article.
  6. Tag important product names. I will tag product names that appear in the blog entry, but I will strip out the vendor name in the tag and apply that as a separate tag. For example, if my article talks about IBM Lotus Notes, I will tag the article separately with the “lotus”, “ibm” and “notes” tags instead of “ibm” and “lotus notes” or even worse, just “ibm lotus notes”.
  7. Tag ideas, concepts, locations, and events. Any main ideas, concepts (however nebulous or concrete), locations or events must be tagged and captured. If the article has three sections each with a different idea, try to extract a tag from each section. Examples: “productivity”, “social graph”, “enterprise”, “singapore”, “blogs”, “security”. If I am tagging an event, I will always put the year of the event if it’s an annual event (like using “taf 2008″ instead of just “taf”).
  8. Don’t tag individuals. I will never tag a blog entry with another person’s name, even if I talk about them or link to their blogs. This is simply a matter of personal choice. I feel that linkbacks are more than sufficient to give them credit if I do refer to their work. The only exception is if the person is a central idea for my blog. E.g. if my blog was a blog on Microsoft, Bill Gates will be a central idea, and thus I wouldn’t mind using the tag “bill gates” when talking about him.
  9. Use a plural base. I will always choose “blogs” over “blog” or “blogging”. There has been some debate on whether to use a singular base or a plural base as a default, but to me, a plural base just sounds more natural, especially when tags are mostly being used as categories in the Web 2.0 world.
  10. Don’t use more than 10-12 tags per entry. This can be an entirely arbitrary number up to you. For me, if I need so many tags to accurately provide the metadata for a blog entry, then it may be a sign for me to break up the article into smaller, manageable parts.
  11. Bonus Rule: Remember that tags are metadata that helps other people find your content using search engines. So think from the point of view of the user - If I am to type in search terms using a search engine to find this content, what search terms will I likely use? Those can also be considered as tags.

So these are my tagging best practices. How about yours? Please leave me a comment if you have your own set of tagging best practices that you want to share.

Last note on when to use Categories and when to use Tags in Wordpress. In general, I subscribe to Lorelle’s school of thought: Treat Categories as your blog’s table of contents, and Tags as your blog’s index. Categories help you organize your posts into manageable sections in your blog, and Tags help your readers do a search to locate the specific information that they are looking for.

Can’t Beat Google with Only Cash

Published
by
Jon
on May 17, 2008
in Technology
. 2 Comments

Mark Cuban proposed a thought experiment recently.

The proposition in a nutshell: Can you shift the balance of power in the search world by buying out the top sites in Google’s search index for $1000 (or more) each for them to voluntarily withdraw themselves from Google’s index? Could this competitive market for search engine exclusivity knock Google from its pole position? Because the thinking goes, as Cuban puts it, “every search engine has some number of core sites, that when removed from its index , destabilizes the value of its search.”

The general consensus (after reading through 94 comments) seems to be that this is a silly and naive idea and would never work. Most of the commentators like Andrew Parker put forward economic arguments to show the futility of such an exercise because the math simply doesn’t add up.

However, instead of overly focusing on the numbers, here is a blatantly obvious reason to me why this gambit will never work:

If anything, by paying off the top sites to voluntarily withdraw from Google’s search index, Google search may actually become more useful.

Cuban proposes buying out sites in the top 5 results of the top 25k most common search terms. Give or take a small percentage of exceptions, these sites are essentially your Wikipedias, ESPNs, and Amazons of the world.

Now, if you remove them from Google’s index, I believe it will actually rejuvenate Google’s search results by providing users alternative destinations where they can get relevant (and likely more focused) information from. If the users are not satisfied with what they see, they can always fall back to checking Wikipedia, ESPN, and Amazon to find what they need. If I google for “social software” or “LeBron James stats” and don’t see the information I’m looking for, I know I can always go to Wikipedia and ESPN to get what I need.

The thing is that these top sites have a brand and presence that is so strong that just because they disappear from Google’s search results and appear on Yahoo’s search results doesn’t mean that they will receive any less user traffic.

So the consumer wins because they can still get the information they need by using their favorite search engine and perhaps even discover new sources of information.

All the top sites win because not only do they get to pocket hard cold cash, they won’t suffer a decline in traffic for their efforts.

Google wins because users will continue to use it as their preferred search engine.

The only loser will be whichever search engine that forks over the $1 billion or so to the top sites and not changing the search engine balance of power one bit.

And we haven’t even considered about all the ethical and legal aspects of colluding with the top sites against Google.

As a thought experiment, this was fun. As a plan, it’s pretty much doomed to fail. There may be other ways to beat Google (perhaps social search or vertical search?), but this surely ain’t one of them.

Could this be one of Mark’s secret plans after he takes over Yahoo with Icahn? ;)

CrunchBase Information on Google
Google
Information provided by CrunchBase

MythBusters: Debunking Enterprise Social Software Myths

Published
by
Jon
on May 16, 2008
in Technology
. 0 Comments

Inspired by an upcoming article in Digital Life which my company and I are working on, I’m going to attempt to start a new feature today on debunking common myths.

First up - Myths on using social software in the enterprise!

Myth: If you deploy social networking and other social software tools in an organization, people will spend too much time using them and productivity will fall.

Armchair Theorist: It is perfectly alright for employees to spend a lot of time using social networking tools in the organization, if it helps them be more efficient in finding information and more productive in collaborating with each another. And by most expert and analyst accounts, social software if properly deployed and utilized, can dramatically increase employee collaboration and productivity.

One obvious example is the use of blogging tools to allow individuals to capture and “push” ideas out in a nondisruptive way to a broad audience within the organization. Without blogging tools, it can easily take ten times the effort for an individual to write repetitive e-mails to broadcast out the same information to its intended audience. Another example is the use of social bookmarking tools for creating an information taxonomy based on the organization’s collective wisdom (a “folksonomy“, if you will) for employees to easily search for relevant information. This enables a colleague to do a search, locate experts and “look over their shoulders” at the industry articles, research or blogs those experts found useful—without interrupting them with an e-mail or instant message.

Myth: Corporate users are used to working via e-mail, so there’s no need for these new social software tools.

Armchair Theorist: That was also what people said about e-mail when it was first introduced, and now it is considered pretty much indispensable. Just like progressive companies today are realizing the tangible benefits of using instant messaging as a legitimate way of collaborating in the workplace, the same trend will hold true for social software and other Web 2.0 collaboration tools. I believe users will always welcome new tools which make their life easier. And besides, a good majority of the work force today already regularly use social networking tools outside of work, so they should already have a decent level of comfort and familiarity working with social software.

Myth: It is difficult to manage social software because the content that they generate is too unstructured.

Armchair Theorist: The reason why social software “work” is because of their ability to capture the unstructured ebb and flow of information at the grassroots level, and bring a tangible and usable structure to them. Thru the use of tagging, commenting, feeds and other mechanisms, social software can make this unstructured but useful content available to the entire organization in a seamless and organized way.

Besides leveraging the technology provided by social software in managing the corporate social networking environment, one aspect of social software that is often overlooked is the fact that it is also largely self-regulating. For example, just like on the consumer Internet, bloggers who write nonsense will quickly lose their credibility and their audience. Less and less people will bookmark and tag their blogs, and the inconsequential content will quickly be buried within the knowledge pool in favor of more credible content. The collective wisdom of the organization dictates that the wheat will be separated from the chaff, and only the best and most credible content will reach the widest audience within the organization.

Myth: My company is too small to be able to take advantage of social software.

Armchair Theorist: Although it is true that bigger organizations may benefit from social computing more than smaller organization simply due to the sheer number of participants, there have been cases where social software was being successfully deployed and used in organizations as small as 300 employees.

And tools like blogs, wikis and social bookmarking are generally useful even for small organizations. These tools provide employees a straightforward way to capture their tacit knowledge and expertise, which is useful for the business regardless whether there are five people or a thousand people using the tools.

Myth: Social software is irrelevant in the enterprise and there are no clear benefits for implementing it.

Armchair Theorist: Industry leaders and analysts will disagree that social software is irrelevant to the enterprise. In fact, a recent Forrester report by G. Oliver Young projects that the global enterprise Web 2.0 market will reach $4.6 billion dollars by 2013.

In addition, many social software vendors today help conduct business value assessments for organizations to demonstrate how one can tangibly reduce costs and increase top line revenue for companies by using social software.

Another often overlooked benefit of social software which may not be easily quantified is talent recruitment and employee retention. The fact is that the brightest new talent coming into the work force today have their choice of companies to join, and more often than not they will choose a company which provides them a work environment which they are comfortable and familiar with. This includes providing them with social software and Web 2.0 tools which they are used to using as they have grown up, and have shown proficiency and efficiency in using.

Imagine a new talented employee who is used to getting answers to questions quickly by broadcasting the question to his network of friends on Facebook. Now ask him to get information from people in your company by inefficiently sending email to many people and playing email tag with everyone. All else being equal, wouldn’t the person rather go to your competitor which provides him social software tools which make him more productive?

Finally, as Richard Dennison points out, “Did we measure the ROI of our telephone system or e-mail or were the benefits so blatantly obvious we just deployed them!?”

Update: Beautiful compilation by Sam Lawrence which further illustrates how time and time again the naysayers have been proven wrong with regards to misjudging the relevance of new technology in the workplace.

Myth: Social software poses a security threat to organizations.

Armchair Theorist: If anything, enterprise social software actually make organizations more secure by allowing organizations to set up a secure social computing environment for employees to capture and share confidential and sensitive information. One reason many companies are looking into enterprise-grade social software is because many employees driven by the need to collaborate and share, are either consciously or unconsciously putting confidential company information on public social networks and Web 2.0 destinations such as Facebook, MySpace and Friendster. By providing social networking tools, companies hope that employees can maintain their passion in sharing and collaborating with each other, but within a secured environment in the enterprise.

As an IT system, enterprise social software is generally built using the same technologies as many other business applications today, and therefore is no less secure than any other commonly used business application or collaboration tool such as company e-mail or the company Intranet.

Of course, no matter how secure an IT system is, the humans who use the system also have to be accounted for. Although social software generally provide tools to help manage and moderate content (e.g. “flag this as inappropriate”), a best practice for creating a comprehensive corporate social network policy should involve the users agreeing to a set of predetermined terms of usage or “Business Conduct Guidelines”. This “contract” will remind the employees that they are still expected to act within known company guidelines and ethics when using the social computing tools.