Cloud Street

Tuesday, February 28, 2006

All the things I could do

But (for new readers, this is point 2; point 1 is here, and you should go and read it immediately), it's becoming clear that Web 2.0 is all about the walled gardens. As I wrote in that post, In the context of social software, when I use a word like 'enclose' - or a word like 'monetise' - it means something quite specific and entirely negative: it's a red-flag word. Which means that, oddly, when I started reading Russell Beattie's WTF 2.0 I found a lot to agree with.
The worst thing about all the Web 2.0 hype is the complete loss of business perspective. There’s a few companies out there that seem to get it but just about every other new website I’ve seen lately is nothing but features parading as businesses. Sure, these guys get to be entered in the “Flip It Quick Acquisition Lottery”, but beyond that, none seem to be creating anything of any real value.
"Features masquerading as businesses", the "Flip It Quick Acquisition Lottery" - all good stuff. Except that Russell's objections aren't quite the same as mine.
You can create a new website, fill it with all the goodness in the world, be good to your users, and be a good netizen and use every open standard there is while you’re at it, if at the end of the day your users didn’t put money into your bank account, it’s a useless waste of time for everyone involved. I mean, hey, if you want to create the next non-profit service like Wikipedia, all the more power too you. But if you want to get VC cash, an office in downtown Palo Alto, do a bunch of development, attract lots of users and pretend you’re a business? Then act like one, create something of real value and make some real money from it.
"Real value", "real money". You don't have to be a Marxist to suspect that those aren't necessarily the same thing (although, to be honest, it does help). In the next paragraph Russell draws a hazy distinction between the two himself:
look at the Weblog federations for example. They’re making money like people have done for a hundred years or so: hire writers, sell some ads, publish using standard technologies. Nothing too innovative, but they’re making money and I totally dig that. Then again, those writers are generating real value, IMHO, so there’s something there to make money from.
Russell commends the Weblog federations, whoever they are (didn't they have trouble with the spice routes a while back?), for making money. He then stresses that they're also creating real value, which means there’s something there to make money from - but 'real value' is qualified rather worryingly with 'IMHO', suggesting that it may or may not be real. At the end of the day the money's real, though, and Russell digs that.

Russell then reminds us that things are different in the 'mobile world'. (If your immediate reaction to this sentence was "Damn right, things are obscenely expensive in the mobile world", or words to that effect, you're ahead of me already.)
I deal with companies every day who have no qualms about charging 25 cents to send 160 characters of data from one person to another, or who have no problems charging $3.00 for a 10kb .gif image or a bad .midi version of a popular song, or even up to $10.00 for a small Java clone of Tetris - a 20 year old game. Unlike the web world, the mobile world is accustomed to charging for every thing that has the slightest bit of value. The difference between the markets couldn’t be more drastic. I know of a mobile chat site that’s on many carrier decks that’s a great example of this. To use it, you need to sign up to a subscription for $3.00 a month, and in return you get a URL which links to a very basic WAP based chat. This would be okay in my mind if there was some sort of extra special functionality, but there’s not.
Follow this reasoning. Money is being charged; in Russell's mind this would be okay if there was 'extra special functionality' involved; but there isn't. So, by implication, it's not okay. The money is real, the value isn't. An equally poor service which was free would be better. A better service which was free would be better still. Right? Well...
But don’t get me wrong, it’s not that this is a bad service or a rip off - they are providing a chat app as promised and it works. It’s just the fact that this particular app could be written by any developer in the Valley in less than an hour, and yet they easily have thousands if not millions of paying subscribers world wide.
The part about how the value isn't real and it's not okay? Forget that. The value is real, obviously, because they are providing a chat app as promised and it works. In other words, the measure of the value of a service is the fact that people are willing to pay for it. And if people aren't paying for a service that has value to them (because it does stuff that they want it to do), then that's just wrong and we shouldn't encourage them.
Why will people gladly pay $3.00 for a basic mobile chat site and not pay anything for a decent web service? I think it’s mostly because of expectations, and honestly, the naivete of many of the people trying to start “businesses” on the web today.
Really, the hype around Web 2.0 has got to stop until all concerned stop acting like a bunch of hippies and start concentrating on what really matters, which is of course money:
I really do think there should be a litmus test for new web apps launched from now on - something very basic and if they don’t pass, they don’t qualify for any buzz or linkage. It’s a simple test: Will they take my credit card? That’s it. I don’t care if they have advertisers or sponsors or god knows what else, all I want to see is a place where I can type in my credit card for some service.
Money: that's what Russell wants. Or rather, that's what he wants to be charged. After all, if you're giving it away, it can't have very much value.

Ultimately, for Russell, there are two very simple questions which software developers need to be able to answer if they're going to have any hope of jumping the Web 2.0 train. Do you want to get VC cash and an office in downtown Palo Alto, or not? And if not, WTF is wrong with you?

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