Web 2.0: It feels like 1999 all over again

A refresher on the state of Web 1.0 in 1999

I was one of those lucky few to be a part of the explosion of the Internet (not just the dot-com boom but also the earlier DARPA-driven R&D at MIT, CMU, Stanford and Berkeley the 80s). For those of you who do not remember (or — I am sad to remind myself — may be too young to remember) here are some things that were going on in the Web 1.0 world in 1999:

  • The Horsemen of the Internet (Cisco, EMC, Oracle and Sun in the B2B world, Amazon, AOL and Yahoo! in the B2C one) had introduced “new models of doing business that would change everything” to millions of people
  • These models were very technology-centric and focused on “new measures of value” such as click-thru’s, eyeballs, audience, etc. (discarding traditional EPS and PEG values)
  • Lots of “traditional” companies were racing to adopt these models — instead one core to their businesses. (Remember all those tracking stocks like NBCi and Borders Online?)
  • Technology vendors were rushing out tool boxes to build web sites,
  • As same time, analysts were heavily questioning if these models had staying power (the stocks of the horsemen actually dipped heavily at this time — just before rising as part of the last-minute Y2K Technology Gold Rush

The Web 2.0 parallels of today are eerie

This sounds a little familiar what is happening today in the Web 2.0 world (minus the overtones of the current world recession):

  • Thanks to Web 2.0 Horsemen (Facebook, MySpace, LinkedIn and Twitter) millions of people now roughly understand what Web 2.0 means — at least in the consumer space
  • Like 1999, the business models in the Web 2.0 space are still largely in the formative stages (just a few minutes on TechCrunch or Silicon Alley Insider will highlight this)
  • Lots of “traditional” companies were racing to add Web 2.0 offerings — with varying degrees of success. (At least we are avoiding Web 2.0 tracking stocks for now)
  • As the analyst reports attest, the Web 2.0 space is becoming filled with companies who offer “toolboxes that can uses to quickly stand up communities”
  • At the same time, many are asking if “there is any there there” in the Web 2.0 business model (and the valuation of Web 2.0 companies have crashed — ahead of the recession)

What happened after 1999 to Web 1.0

Within five years, the Web 1.0 world have moved to a very different place than it was in 1999. Essentially, it integrated with (instead of disrupting) the rest of the business world. Web technology moved from being an end-to-itself to becoming a means to create value. This significantly changed the market space: web-only companies diminished or disappeared (web hosting, domain name services and email are now commodities) while companies who could use web technology to create value-added Business Solutions created whole new markets. Examples easily come to mind:

  • Content Management systems replaced the build-your-own-website tool kits (and pushed these companies aside)
  • eCommerce platforms became a core purchase for every major CPG company
  • Advertising and creative agencies became Interactive Agencies, providing holistic advertising and brand service across all media channels (pushing the ‘webmaster’ back to the IT department)
  • CRM moved from a back office function to an real-time service to manage revenue creation
  • Digital music replaced the experience of going to the record (or CD) store
  • Searching for information online (instead of going to a library or buying a “List of…” book)

We are now ready for this in the Web 2.0 world

I believe Web 2.0 will follow a similar integration path that Web 1.0 did. Those companies who can figure out how to create value-added Business Services using Web 2.0 communication approaches (be them technology firms of consulting and creative groups) will expand and develop new markets. Those enterprises who fold these services into the day-to-day execution of their mission will realize the most benefit.

If you disagree, the perhaps you can answer the following question for me: what is the value of a blog or a forum? I do not think blogs or forums have much intrinsic value in themselves. However they can create value when integrated into a higher value business service or process.

On the other hand, what is the follow of the following services?:

  • Leveraging your customers to tell you what you need to invest in to sell more (would save a lot on Product Development and increase product success rate)
  • Harnessing citizen input to shape more efficient public budgeting (would save a lot on public referenda)
  • Using the the contributions and input of your customers to drive advertising traffic and urge new customers to buy your product (saves on advertising costs and increases sales)

Not only are these services valuable, they are also broadly applicable, easy to understand (from both a business model and end user perspective). The firms that can create these will become the Vignettes, Crispin Porters, Salesforce.coms and Apples of the Web 2.0 world.

Addendum 1: I am not the only person who thinks this

McKinsely & Company recently included a segment “Six Ways to Make Web 2.0 Work” in their last McKinseyQuarterly publication. This article discussed a very similar evolution of adoption of Web 2.0 “tools” that will overlay existing infrastructure to encourage engagement and participation. They included a graph that shows the same ten-year repetitive cycle:

MckinseyQtr-560px
Credit: www.McKinseyQuarterly.com

Addendum 2: Here we go again

IoT is the third big technology ‘wave’ in the last 50 years — and perhaps the biggest

 

Don’t build technology, build Business Solutions

In case you forgot, most people are not in the technology business

Most people do not create software and information technology for a living. (This makes the world a lot more interesting than it would be if we all did so.) Instead, they work on providing the goods and services we all use everyday to live complete lives: housing, medical care, energy, food, entertainment, etc. Too many people in the technology business forget this. As a result, they focus on designing and delivering technology from the perspective of technologists. This tends to create hard-to-use products than can often miss their mark. If you do not believe this, take a look at all the comedy sketches and commercials that make fun of software crashes and that not-so-popular tech support guy.

We need to design technology for people who are not technologists

When we design technology, we need to start with the following questions:

  • Who do we intend will use it?
  • Why will they want to do this?
  • How will this make their life — or what they do for a living — better?

This is not a new concept. It has been around for years in many formats. The Chasm Group calls this product positioning. However, they did not invent the concept. The Rationale Unified Process (RUP) calls this the Problem Statement (and airs it with a Solution Position). Most of my friends in Marketing call this Market Positioning.

When we start with these questions, we build “Killer Aps” that are wildly successful. Many software and information technology examples come to mind, from WYSIWYG word processors to TiVo to iTunes.

This is just as important in the enterprise space

Often I hear people say that the above questions are great for consumer products but do not apply in the enterprise space. I am always confused when I hear this… Do people mean that we should not design enterprise products with a focus on enabling business (and public) leaders to make their day-to-day jobs running their companies and agencies easier, more intuitive and more productive? Just look at how successful SalesForce.com was at doing this. (Remember their “No Software” campaign tag line?)

What happens when we design enterprise products around the technology (instead of the business)? We create whole new problems when trying to solve old ones. When do know this has happened? When you hear things like “you need to do [X] because [System Y] requires this,” and start to see job postings for people to run System Y — or worse — enter data into (and run reports from) System Y. Why would you ever build something so non-intuitive that you need to create a whole new profession just to operate it?

We can avoid this in the enterprise space by building “business solutions”

I coined the term “Business Service” (in the context of software and information technology) about six months ago:

Busi•ness Solu•tions |’biznis səˈloō sh əns | (noun)

  1. A reusable configuration of technology designed specifically to solve an enterprise problem (or address an enterprise need)
  2. That does not require its end users to understand how the technology is designed, built or adminstrated
  3. Which directly solves a business problems of the enterprise (or meets and unforeseen need).

I found this definition to be a good litmus test: technologies that are Business Solutions support their customers’ businesses, technologies that are not need to be supported by their customers.

What happens when we build Business Solutions?

  • We generate huge ROIs
  • We make our colleagues’ (or customers’) professions easier
  • We build something soon businesses cannot do without

I challenge all of my fellow enterprise technologists to build Business Solutions

Note: I am currently CIO and Vice President of Technology at Neighborhood America. We have codified this concept into the term Business Services (you can read Gartner’s discussion of this concept, here)

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