The 1.0 Lessons Missed By 2.0
by
on May 27, 2008,
In the ongoing Internet war, we have Gen X/Web 1.0 refugees on one side, and Gen Y/Web 2.0 upstarts on the other. No matter where I turn, there is always some new debate about which one has done more; which one is a true bubble. The typical Web 2.0 defense goes something like this:
The big difference "this time around" is that there is some really exciting technology coming out of the web interactivity boom, and regardless of the fate of individual companies, the technology is here to stay. Last time, the bubble was epitomised by braces-wearing yahoos raking in investment capital and blowing it on big parties and very, very basic technology. There was nothing actually there to sell, hence the "bubble". Web 2.0 isn't a bubble, it's a multilayered technoblanket of socialism, - Slippy Lane on FriendFeed
I now know what my parents felt like trying to talk to me as the voice of experience, and have glimpsed the future of talking to my own children as they get to the know-it-all teenager stage: you have experience, you learned lessons, and no one wants to take advantage of that.
What the Web 1.0 Bubble did was figuratively devalue most of the innovation and make it seem like those involved had no idea what they were doing. The idea that it was all big parties and "basic technology" is so off-base as to be downright offensive. For Slippy Lane and his compatriots, the number 1.0 signifies first version. In other words, before Web 1.0, there was no web. None. So claiming that it was "basic technology" is a bit silly, especially when you consider that without Web 1.0, Web 2.0 wouldn't even be able to exist. It would be like building a house on quicksand; what would hold it up?
In addition, young whippersnappers are loathe to realize that some of the biggest behemoths still in play today are the companies that did the complete opposite of what most Web 2.0 companies seem to be doing: they didn't limit themselves to one small thing. The companies that are still making regular Techmeme headlines are those like Amazon and Google. What did they do? They took a basic idea (selling books online for Amazon and searching the web for Google) and created companies out of them. But they didn't limit themselves, either in name, nor in business plan, and they built their infrastructure with an eye toward expanding it as time went on. You see a start-up like Xobni with a product designed to do one thing (work with your email) on one platform (Microsoft Outlook) and a name that's "inbox" spelled backward, and where can you go with it? Even if they expand their offering to other mail programs and services, is this really a company that can have a huge IPO and the type of longevity Amazon and Google have had so far?
The news that Facebook plans to open-source its platform has been a hot topic of discussion today, but even Facebook, with it's huge valuation, hasn't proven they can have that same reach that companies like Amazon and Google have. The apps that have been developed for the platform so far are, for the most part, not incredibly useful, and the only way most of the developers are making money is through the pyramid scheme of selling ads on those apps for other apps. The FriendFeed commenter was dead wrong here; Web 1.0 always had something to sell, be it books or pet food, or ads. It didn't operate on the idea of free. It just didn't always take into account what was needed to succeed. Web 1.0 companies that succeeded had a plan to make revenue, an option to expand their reach, and weren't looking for a quick exit, because there was no company to buy them up. They focused on building a company that would last. And maybe that's something more Web 2.0 companies should look to emulate.
If you enjoyed this post, make sure you subscribe to profy RSS feed!
Svetlana Gladkova
Opensource 
Michael Fidler 
“Super-like”. Nice article, Cyndy
@Louis - Thanks for the explanation, I’ll see if it’s really as simple as it sounds right now
So if it was Cyndy who wrote it, why haven’t the Profy authors claimed a multi-author blog and correctly shown that it was Cyndy who posted it, eh? Svetlana, must you always try to grab Cyndy’s glory?
@Louis - I’m not actually trying to steal the glory here - I honestly have not seen it possible to claim a multi-author blog here the way it can be done on MyBlogLog, for example. Though of course I’d prefer to do just that
Go to “Account”, click “edit/add” next to services, click on the RSS icon for http://www.profy.com, check the box for multiple authors, and then add your name. (And yes, I know you weren’t trying to steal Cyndy’s glory…)
It’s funny to see Amazon mentioned. I remember when everyone was laughing at them as being “unsustainable”, and saying that they would be out of business as soon as B&N started a website. I also remember when Google was a “obscure niche player in an already mature market”.
Yes, it was really that simple! How could I not notice it when I first added the Profy feed here. Thanks a lot for pointing that out to me!
Paul, very true, for some reason people tend to think that new companies in already established markets with strong players have no chances to survive - and only months or years later we don’t even remember who originally were the strong players.
People (including managements of dominant companies) consistently underestimate how successful new players with useful solutions will be because they consistently fail to understand how much current solutions still suck.
Yes, that’s probably the key to continuous success - actually listening to what your customers want to be improved. And I guess many startups do this much better than established companies
@Robert Thanks! @Louis LOL. I had it claimed that way, but didn’t realize Svetlana didn’t. @Paul I know! People then thought I was nuts to be singing their praises. Bezos really did have a vision. And I wrote a review of Google that called it “the web’s best-kept secret.” Hilarious now!
I would argue that, sans revenue model, these Web 2.0 startups aren’t even companies. Companies / businesses are about turning a profit. These are more like over-funded hobbies.
I’ve read that 50% of internet traffic is now streaming video…. Tell me, how does YouTube make money? I can guarantee you that bandwidth costs money, and telecom companies aren’t in it to expand the social graph and push the envelope of social network marketing. They’re in business to make money like grownups.
What else should we expect, though, from the Prozak / ADHD generation? The spoiled children who grew up in the land of milk-and-honey that was the longest peacetime expansion of the US economy during the run-up to the Web 1.0 bubble are now trying to make their mark, and we feign surprise at their having precious little grasp on reality.
Hi Cyndy,
I enjoyed your article, it was very well written, but I do have to comment because 10 years from now you could easily write an article listing web 4.0 companies and question why they can’t be more like Facebook, Xobni, or other successful web 2.0 companies.
I am the co-founder of Xobni and assure you that Xobni has ambitions larger than the marketing surrounding our current product has conveyed to you. Before I go further I will also add that simply our current product, which only integrates with Outlook, has a total addressable market of 400-500M monetizable users with a glaring pain point. This alone can be a huge business.
That said, we started Xobni with the simple idea that Google organized all the information on the web, yet no one has done that for personal information. And there exists two orders of magnitude more data in personal data silos than public data exists on the web. So, you will see us go in new directions, but most smart companies start with a refined but strong beachhead - Slide made a widget for MySpace, Google made a search algorithm to license to websites, and Yahoo started as a webpage of Jerry and Filo’s favorite links. So, could Xobni IPO some day? Email is huge. Personal data is huge. And we have investors that tend to invest in companies that do: http://www.khoslaventures.com/people.html I wouldn’t count us out.
Best,
Matt Brezina
co-founder, Xobni
I installed Xobni when all the buzz was going on about Microsoft buying them. I haven’t uninstalled it yet mostly because it’s just that unimportant to me.
Xobni is a classic example of a feature being pitched as a product. A stable and usable email client is a product (although there’s plenty of free ones, so not really a monetizable product). A plugin for email to let me see statistics and views into my email? A feature… Actually a feature I would turn off if it slowed down my computer appreciably or in any way was a detriment to the main feature of my email app…. receiving and reading email.
Have you noticed that things like Google Desktop Search came out and were very popular in the short term, but now you don’t hear about them? There’s a reason. It’s interesting for a while, but ultimately doesn’t have enough value to be worth the trouble or potential security or privacy issues. Oh, and that was a Web 1.0 version of Xobni that touched a lot more than just email.
I think Xobni and others are great examples (agree with @Grendel) - We had the same way of thinking in Web1.0 as in Web2,0 the target function of the startup (supported and/or pushed to by its investors) is to make “quick exit” not to “build a company for IPO” or even “build a profitable company” - Is it the right approach ? maybe, if you look in net investment terms. Does it bring “usable” products? Does it give the motivation for startups to build viable business model? build a “real” product offering rather then a niche feature (which is more likely to be bought)? - no it doesn’t. I think that its not the right way to go, but working with many startups I find it very hard to convince them to invest in long term strategy rather then in aiming at doing quick bucks.
I would like to take this opportunity to dissociate myself from this article. The comment of mine which was quoted here by Cyndy was nothing more than a humorous comment, like most of the comments I leave about the web 2.0
@Matt I don’t count you out, since everyone I know who uses Xobni seems to love it. The point that I’m making, however, is that small companies with a microfocus don’t really have a chance to compete in this market. The end-game goal for Web 2.0 seems to be acquisition, not building a company that will still be standing on its own as a success story 10 years from now. The Industry Standard’s recent series on what happened to dot-com companies that looked like they could succeed should be a wake-up call for much of Web 2.0, but there is a prevailing mentality that we all just didn’t know what we were doing in the late 90s.
@Grendel and Naor “And you will know us by the trail of the dead” should be the mantra for tech. There are so many examples of companies that coulda/shoulda/woulda succeeded that should be studied, but there is no sense of history. The Standard articles I referenced above included one about eToys, and I felt that same sickness in my stomach reading it that I did the day the community manager at BabyCenter told us eToys had filed and was trying to sell off BabyCenter/ParentCenter to at least save the community. It was a great company with a great brand and fantastic products. I still haven’t seen a toy store manage to replicate what eToys was. If I were someone starting out, I’d be picking over those companies trying to find out what they did right and what *I* could do better.
@Slippy The point was that your comment was meant as parody, but it’s dead on for much of the rhetoric spouted by the 2.0 wantrepreneurs. If I was confused, I’d have left out the last line.
Sometimes, when you want to drive a point home, you use the most hyperbolic example. Yours, parody or no, was that example. 