Saturday, October 22, 2005
The Great Disruptive Web 2.0 Search
Richard Macmanus has kicked off a thread trying to find some really disruptive 2.0 plays based, in part, on my comments last week. This is a cool idea.
Let me jump into the conversation, which I've largely missed so far because I've been pretty busy this week.
We've got to begin by defining disruptive. I am going to set the bar really low and define a disruptive startup as one that meets two of the three following features (YMMV):
1) Is it not simply a product range extension for existing incumbents? If it is, it's more than likely that it's not going to be disruptive - it's going to be an incremental innoviation. I think SproutIt is pretty cool, but does it meet this criterion?
2) Can it scale to more than 25m users (in 2-3ish years)? Current Web 2.0 penetration is peanuts; 1m users/readers/subs is nothing in broader media terms. Example: I like the idea of urbnforage a lot, but does it meet this criterion?
3) Can it achieve revenues/user of at least $.50 (in 2-3ish years)? That doesn't sound like a lot, but it is. A startup will have to present a (really) disruptive business model - on the order of AdSense or eBay - to create this kind of value.
You get the idea. I think there is a very (very) short list of current plays that meet these criteria.
The more interesting question is why. Why is the list so short? 2.0 technologies make it pretty easy to disrupt markets like media.
My answer, as outlined previously, is that the Valley really doesn't have a great understanding of how media works, so it's having a hard time defining what Media 2.0 should look like.
Understanding media is about understanding consumer behavior and dynamics. Why are things cool? Why do some brands suck, and others not? Etc, etc. This gap is not surprising - the Valley is famous for its rejection of consumer culture.
So, to answer the question, why are there so few disruptive 2.0 plays, I don't see, pretty simply, that the geeks have this understanding - which is why most 2.0 plays are default-targeted, like a broken record, to the same somewhat smarmy 20somethings (uh, like me).
To make this concrete, think about how long it's taking disruptive, radical innovators like Technorati and del.icio.us to meet the criteria above.
Clearly, the technologies they've built easily have the potential to meet the above targets - but it's the search for strategy, marketing, branding; that is, understanding where and how the value they've created fits into the larger media landscape - that's held them back from realizing this potential.
Thanks for the nod :) Here�s my (very, very modest) commentary:
1) As far as I can tell, no. The fashion world is highly fragmented, with information either artificially withheld to glorify a personality (Fashion Calendar
, for example) or behind a prohibitively expensive subscription (WGSN
). Part of what we�re doing is leveraging social software to help designers and retailers pool their knowledge and replace these services.
It�s sort of funny - the whole "most Web 2.0 companies are really just features" meme has been really helpful in designing our software. The proliferation of open APIs (props to eventful
, and etsy
) has also been really helpful - and we�re going to contribute some new functionality to the system.
2) We�re networking three different (slightly overlapping) types of people - designers, retailers, and shoppers - in different positions. I believe that a network of even 100 trendsetting designers and stores could be a disruptive force. There are certainly more than 25m shoppers in the country, although initially our demographics are skewed towards, um, smarmy 20somethings, albeit ones who will spend $300 on a pair of jeans ;)
3) The money is certainly there. I won�t go too much into the business model right now, but there�s a lot of potential in coupling the granularity of "we are all niches" collaborative filtering with the "if you can see it you can buy it" model of glam.com
We�re also flexing our trendspotting muscles - search results from our shopping guide will be sorted by the level of "buzz" around a particular item or store - a search for "denim in San Francisco" will point you to a hip, up-and-coming label at a trendy store. Automatically. This feature is a few months out but it�s pretty neat and, yeah, potentially disruptive.
You�re much more knowledgeable about these things than I am, so feel free to beat me up in your next post if I sound too arrogant.
Finally, if you or any of your readers are in NYC, SEA, or SF I�m going to be running around doing various errands in all three cities next week and I�ll spring for coffee if anyone wants to meet up :)
I'd suggest it's better to stick to "disruptive" in the Clayton Christiansen definition, as something the incumbants can't get into because it's worse (or useless) from the perspective of their existing customers.
In this sense, I see Ning as being genuinely disruptive, if you consider it as a web-development platform in competition with Microsoft's Visual Studio, IIS, database products etc. Or with similar Java based web-middleware from Sun, or even with Ruby on Rails and other free offerings.
Although Ning is "worse" in the sense that it builds a limited range of applications, it might be able to build the applications most people want. But MS or Sun couldn't get into it without abandoning their existing developer customers who are have more sophisticated requirements and are already commited to their own existing codebases.
Extended version of the above, here : http://platformwars.blogspot.com/2005/10/what-id-do-with-ning.html