The perfect storm, 2-5 years out

IBM didn’t see it coming, but Microsoft does. They are smart. That’s why we’re aligned with them. 😉

What is this perfect storm? What happened to IBM? IBM got hit by the PC revolution, economies of scale. The tremendous book “The long tail” makes two superb points:

1. The internet allows the long tail to operate, where brick and mortar stores truncate this natural phenomena – by restoring the long tail to your business you can add up to 35% to your revenue
2. The world economy always reorganizes itself around free (or near free) resources. When we built ships, the seas were “free” to sail on and so we sailed and traded. And so on, as growth reveals more “free”, the world adjusts economically around that free resource. China, India, Indonesia and Russia suddenly revealed near free (relative to US and European salaried rates) employees and the world reorganized around that.

Item one above is interesting… item two is compelling. And now we have Google. Their stuff is free. And Microsoft’s stuff is not. Now hold on… before you sigh and give up and close the browser, just stick with me and see where this is going. I suggesting that like the discovery of ships led to a vast new past time (sailing and trading) this free resource will lead to things only 1 year away that we never imagined.

What is Google offering… when you swallow these facts, you might be able to see why Microsoft is plunking down $2billion per year to create their own data-centers!

I don’t open MS Office any more

Google GMail was good. Google Apps for your domain is awesome. (Google Apps). I now send and receive through gmail but using my EXISTING company email addresses. NOT my gmail address. Since I moved to the Google Apps version of GMail, I only opened Outlook to export my contacts. Really. Bye bye Outlook. Google Writely is a free Ms Word, Google Spreadsheets… except that it’s free. Google Calendar.

I doubt I will renew my MS Office subs… I don’t need it any more! I simply do not use it. Except for the development environment, like Atlas and so on. But as my next point explains, that might not be for too long.

UPDATE: Today I opened Frontpage to edit some HTML. 

No more SQL Server licenses?

Google got my corporate mail and of everyone working on reBlogger. What else will they take?

You might not get that heading right away. Look at this. You know about Google Base where I can define my data structure and then generate pages to expose the data. The data is hosted by Google’s servers.

Now entering into this picture is Google Base and the Google Database API where you can write against this “GData” and access it from your own servers. Unlimited free data hosting on a server where you don’t have to worry about scalability? No more budgeting for 20 million of backend server racks. This is profound. Sayonara to SEO… look at the BASE slogan: “post it on base. find it on google”.

UPDATE: I found an article about gbase being moved into the retail sector. Lookout amazon!
I know what you’re thinking… the latency between your server and the Google servers would make it unworkable. But what if they hosted the application, just as they now host my company email? Enter Google Page Creator.

It’s all free

I confidently said to my co-worker about 2 months ago that within 1 year I wouldn’t be using MS Office any more. He doubted me. It’s 2 months later. I don’t use MS Office any more.

I am hesitant to say when we will stop using the .NET web developer stuff… there is far more for Google to have to build before I can use it. But the offer of not having to build an enormous backend for my online reBlogger business is just so tantalizing. Not having to write code for storing and indexing the masses of data that reBlogger collects and stores… ohhh yeaahhh.

Every blogging company (eg wordpress etc.) would just leap at free hosting of their data. You bet! And automatic inclusion into the Google results!? Of course! Woohoo!

But look a bit further down the road. Take technorati as an example. If they built for the Google “Platform” (developers! developers! developers!) then they wouldn’t need to collect their own data, they simply use GData to mine the EXISTING Google data store. Now can you imagine what we could do if Google hooked GData into their existing data store?

This idea is already being explored by the Alexa crew with their APIs, but they don’t appear to have the vision and based on my interaction with them during the year, they don’t value interaction with mere mortals and don’t want to meet the needs of these mere mortals. Hey, that’s ok, Google or Microsoft will.

Why Microsoft won’t be an IBM

Because Gates is smart enough to see this coming. Oh, wait. Gates is leaving. But they will see it, I have no doubt about it. Their decision to spend $2billion on server farms tells me that they are responding. But their cash cows are under threat. Someone is cow-tipping over night and we KNOW who is doing it. hehehe.

Industry organizes around near free resources

Google are inventing the “ship” (in the analogy) and the industry will begin to re-organize around the free resource that has been exposed to us: unlimited bandwidth, unlimited hosting, unlimited scalability.
The thing is that they are making money, theirs is not a bubble economy. The revenue model is usage based. It’s going to be interesting!

6 reasons why reBlogger will not be like Kiko

This post is our company reply to my own post: Bubble 2.0 begins to deflate – 9 lessons

Here are some reasons why reBlogger will not deflate with Bubble 2.0, but instead we will increase and grow:

1. We have more income than expenditure – we’re cash flow positive, without any investors (low risk approach)
2. Metcalfe’s Law is still valid and this alone tells me that reBlogger is the right product, at the right time: Metcalfe’s original insight was that the value of a communications network grows (exponentially, as it turns out) as the number of users grow because as the network grows, as participation grows (via RSS) the need for management inside companies grows too… and we’re the only product that offers to resolve this problem for large companies
3. The pricing is crucial – and our pricing is right. We have a free version, hobby, corporate and very large corporate versions.
4. We have great features but we’re not afraid to remove many of them. Some say that a movie is not finished being edited until the “favorite/protected/darling” scenes have been cut. Just today we agreed to remove central features from the default install, to make it an easier learning curve for initial users.
5. We have big dreams and a great vision, but we’re still focussing half our time on making what we have work better than before.
6. We have made a strategic decision to align with Microsoft and they reach the cashed-up corporate market where companies still have money to spend long after the Bubble 2.0 has gone under

I think that we must simply ignore the carnage that is about to happen and keep our minds focussed on creating the best product to monitor corporate blogs. The best place to watch internal blogs, track competitor’s blogs and keep up with the industry news – right there in your cubicle using reBlogger.

Bubble 2.0 begins to deflate – 9 lessons

Do you remember the way we used to be? Our lives untainted by memories. And we laughed and we cried and we…. yeah yeah yeah. You know the song.

Well it had to happen. Bubble 2.0 is starting to deflate. Just as the new economy resulted in effed company which tracked the fall from dizzy heights and good companies with good people became road kill… in the same way Bubble 2.0 has deadpool and the body count is rising.

Well, the inevitable is starting to happen – a few new web startups are starting to close up shop as they find that building an application is a lot easier than getting users to try it out, and keep coming back. – Fold.com…Folds

Never a truer words has been spoken. Well, ok. Very seldom has… well yes… many truer words have been spoken. But still. This is a good word.

In our company we have been trying to focus on certain strategies and to avoid certain things for some time now. The acid test for me was not the hype, not the investment, not the long tail, not the ideas, not the talent, not the committment nor the features or buzz or excitement… it was the income.

You can’t take home and eat excitement. The proof of the pudding is still in the eating. Do people want to eat what you are offering… more specifically, will they pay for it? If someone doesn’t pay for it, you have NO business model.

Here are some really good posts about a recent startdown called Kiko:

• Kiko in the deadpool
• Actual lessons from Kiko 1
• Actual lessons from Kiko 2
  
• Kiko Flatlines

As Richard White, member of the Kiko team, wrote:

I agree with the 37signals argument that having paying customers forces you to hone in on what that market wants, and that probably would have done us a lot of good – Actual lessons from Kiko 2

As Justin Kan blogged about Kiko

Stay Focused. … snip… If you’re a creative person, it’s very easy to get side-tracked on side ideas when you really should be working on your main one. This is bad. Bad, bad, bad. We did this a lot with Kiko, and it caused many delays in getting the product out the door.

Cute hacks can cost you time. Take the time to do things right from the beginning. Seriously.
Build incrementally. We tried to build the ultimate AJAX calendar all at once. It took a long time. We could have done it piece by piece. Nuff said. – Actual lessons from Kiko 1

These simple pieces of advice can absolutely mean the difference between earning an income and just getting by and never actually being able to make a difference in the world. The cute hacks one still drives me absolutely nuts as I struggle with moving us forward while having to undo the junk legacy code that was written in the past.
Some other lessons worth considering

Too many features killed the cat – It didn’t look it at first, but if you played around with Kiko 1.0 for 15 minutes you found out that there was a *lot* of functionality under the hood. Problem was that we felt we needed to bring *all* of that functionality over to Kiko 2.0. I mean you can’t cut features between versions, right? Wrong. We should have cut features, probably about 40% of them and launched.

You must have a plan for escaping the Technosphere – To a degree, it didn’t matter how many posts we got on TechCrunch, LifeHacker or Scoble; we would still be stuck in the same Technosphere duking it out with Google, 30Boxes and everyone else. You can make a nice living just pimping your wares in the technosphere (which is what I’m attempting with SlimTimer) but if you ever want to gain any real traction as an online calendar service you have to target the cubicle dwellers and their Outlook calendars that only exist outside the sphere. Techie users are fickle, transient and demanding. You can spend all of your time implementing ATOM feeds and hCalendar export and never be the better for it. We didn’t have a plan for how to go mainstream, which, in hindsight, was a prerequisite for our success.

I would add one more thing: know when to stop. If you’ve been pouring money into something and it’s just not happening, not finishing, not there… its always “just” this or “only” that and if the issues keep shifting (even if it’s FOR A GOOD REASON) then you might need to swallow the loss of your investment and regain control of the direction of the company. We recently did this too.

So in summary:

1. Buidling the product /= gaining revenue from it.
2. Be cashflow positive. Earn more than you spend. Live within your means.
3. Work on the main idea, not on all the “great” (but peripheral) ideas
4. Do not hack in things badly, they will cost dearly you later
5. Build and release incrementally (3.1, 3.2, 3.3… 4.0)
6. Launch with the features that are complete, don’t forever delay the launch for “still to come” features
7. Business is where the money is, not the technosphere – have a plan to reach the cubicle dwellers in companies
8. Know when to stop going down a wrong path. Stop wasting money and accept the loss.
9. Find a way to charge for your product because this produces realism. If no one buys it… then no one is buying it, there is no future… you can then change products, diversify, cutback and try again. If they are buying, then keep on keeping on.

These are the strategies to keep out of the deadpool.

Kilo is currently for sale on eBay. 40,000 monthly visitors… being sold for $50k.

Everything 2.0

Just when you thought 2.0 had been buried… Everything 2.0 and they don’t have reBlogger! Scandalous!

Office 2.0 + Google Spreadsheets = Query(trouble(MS Office))

I've blogged bout a lot of different Office 2.0 solutions. Some of them had spreadsheets like Zoho sheets. But now entering stage from left: Google Spreadsheets. This came sooner than I expected! Techmeme. CNET.

Robert Scoble says: Google announces more sleepless nights ahead for MSFT product managers

It's a good thing because of my philosophy. I want better software. Competition brings better software. It gets product managers to worry about customers. It causes discussions of features that were long-ago decided on.

You're watching two massively different ideas about how computers should be used battling it out right on the world's economic stage. On one hand you have the old standard Office that says "load locally and use local resources." On the other hand you have the new, fresh and clean, Google Office that says "load on the server and use a thin client, er browser."

I know which one I'm betting on. Why? Perspective. Even with my always-on-$80-a-month Verizon card getting to Network resources is still far slower than pulling them off of the hard drive. And, that'll remain true for a long time. Also, the Web browser simply doesn't have the API support to do really rich stuff.

Most interesting. I strongly recommend you read the rest of his post. He goes on to say that Ajax (DHTML) will run out of legs as people demand more features in the online version.

Don Dodge says that Google's online Office software really just competes with OpenOffice and not with MS Office.

So, while the headlines may scream Google Spreadsheets is competing with Microsoft Office, the more accurate statement is that Google is competing with OpenOffice. Remember, free and open source alternatives to Microsoft Office have been around for a long time. They serve a different segment of the market. Google is competing with Open Source and going after that market.

He wishes! This is a head-on-head battle. As Microsoft comes after Google's strength (search and AdSense/AdWords) Google is going after one of the cash cows which bring in something like 28% of the Microsoft revenue.

PR 2.0

Holy cow. Did you know there is a "PR 2.0"? I just added it as a keyword to SEOData's reBlogger in the Web 2.0 section.

Clock 2.0?

So funny! "Kind of like a game of hide-and-seek". Muhahaha!

Clocky™ (patent pending) is an alarm clock that runs away and hides if you don’t get out of bed on time. The alarm sounds, you press the snooze, and Clocky will roll off of the bedside table, fall to the floor, and wheel away, bumping mindlessly into objects until he finds a spot to rest. When the alarm sounds again, you must awaken to search for him. Clocky will find new spots everyday, kind of like a hide-and-seek game.

Clocky via Venture Chronicles via Joshua Schachter via Om

Bubble 2.0: Facebook turns down $750 mill

Not sure we're in a bubble? This social site Facebook is for sale and turned down a $750 million offer. Om reckons they should have sold. Techcrunch points out Skype got $4.1B and MySpace got $500 Million. Check out the Visitors statistics of US social networking sites and  here are their Alexa rankings.

— from gapingvoid

Bubble 2.0: Squidoo, hosted solutions etc.

I've written about Squidoo in the past. They are the closest thing we have to a competitor to reBlogger. Here is an interesting post from TechCrunch that says Squidoo won't survive the crunch: Squidoo: Seth Godin’s Purple Albatross? In reply, here is a must read: Squidoo and Tech Crunch: Wisdom from the mud pit of arrogance

What am I focussing on this? I think it's very important to have perspective that there can be the best APIs and mashups and Ajax use, but what is really needed to survive… is… revenue. Duh.

Over the long term Squidoo might show that they have a good business model and they will survive. We must have one.

Bubble 2.0 – how to stay focussed

We know this is a bubble (Bubble 2.0) and there will be a shakeout. There always is. 95% of the 2.0 websites and companies will blow $millions and never even break even. Some won't even earn advertising revenues. The ones left standing will survive.

Because of this reality, we have to maintain discipline. We have:

• a clear business model
• clear revenue source(s)
• a clear date at which we will look at how we're going – in terms of achieving revenue goals. If it's not happening we have to ask "why not?!" Are there too many free players in the market?

Ajax, 2.0, Mashups, APIs… it's exciting to think about all these cool technologies but it's also dangerous. We can get distracted from what really matters: our product called reBlogger.

Here's what matters:

• We're not trying to be all things to all people. We fetch web feeds, merge and extract useful information for the user and display it back to the user.
  
• We use Ajax (Microsoft Atlas) but we know it only adds to our actual product offering, ajax is not the product. Let me repeat, no matter how cool a PPT presentation was and how excited it made you feel, it was not the product… you still had to build a product.
• We're not just an online RSS reader, we do a lot more than that. No one else does what we do. Not even close.
• We might include some API/mashup items (like flikr) but it's an extra, it's not core to our product – and we know the difference

We need to stay focussed on the product and on earning revenue, not on the bubble nor on the UI tricks. Writely gained thousands of users by word of mouth. That is the most sincere form of flattery – that someone tells someone else about your product.

Bubble 2.0

I just renamed a category (tag) from "Doing Business on the Web" to "Bubble 2.0" because I think we need to be realistic about what is happening on the web right now.

Bubble 2.0

Money is being made all over the Internet these days. Some of it by good old fashioned revenues and cash flow. That's the foundation for the recovery in Internet investing we've been enjoying for the past couple years. But increasingly money is being made the way we made it from 1998 to early 2000; mometum investing, speculation, fast money chasing deals, caution being thrown to the wind, and amateurs jumping in on the action.

Built To Be Bought (Bubble 2.0)

So why am I now getting this increasingly uneasy feeling? I was chatting with a veteran of Bubble 1.0 recently and I think he hit on the thing that makes those of us who've seen this movie before most nervous. He pointed out that there are a large number of "companies" being created again for the express purpose of being acquired.

I've been blogging on the various DIGG clones and different open source business models and 2.0 UIs and Ajax techs… but what remains is to develop a working business model.

Once someone told me a piece of advice and it goes like this: fish where the fish are. To survive a company needs to fish where there are paying customers (unless your business model is to be bought out). Where are the fish biting? Where are the fish that will pay money? I may have massacred the analogy, but you get my point.

In my opinion the consumer market is so full of free software and free hosted services run by advertising, the only place to find fish that still bite is on the corporate intranet.

I'd like to hear your thoughts on this.

What is the open source business model?

I am wondering about this. Where do the revenue come from? What can we learn from companies around us that we deal with?

WordPress.org gives away it's source code (they have had over 1 million download that they make nothing from) and makes no advertising money from the enormous number of blogs they host for free. Their site says:

Services

There has been quite a bit of demand for professional services around our projects, and we’re happy to provide them for select clients.

Enterprise Support

We can provide enterprise support, priority updates, training, and consulting for WordPress, WordPress MU, and bbPress. Contact us with your needs and someone will get back to you shortly.

Swapping job security for a startup – an interview with Toni Schneider

Why did Toni Schneider leave a good job at Yahoo to dive back into the fray with blog-software maker Automattic?

You've joined Automattic to help it capitalize on WordPress. Why?

"WordPress is an interesting new challenge because it's not like most startups, where the world still hasn't heard of you. WordPress is way past that stage. On the other hand, there is no business yet. Until Automattic came along, there was nobody working for it. It was all volunteers. So taking that product momentum and somehow turning that into a business will be really interesting.

…
So what is the business model?

"We're looking at a number of things. WordPress as a blogging platform is already open-source. If you want to run your own blogging service and host other people's blogs, great. Take it. We want lots and lots of people to become serious bloggers. Then we can offer add-on services to those people.

If a blog starts to have so much traffic that you start making some money, once you get to that point, you're ready to spend meaningful money. For people who just casually blog, it should be free.

We're starting to license add-on services like Akismet, which blocks Web spam, to other people who are running corporate blogs, for example. If you're, say, an About.com, and your business is on blogs, you can't have spam on there."

What is the open source business model?

The open source business model relies on shifting the commercial value away from the actual products and generating revenue from the 'Product Halo,' or ancillary services like systems integration, support, tutorials and documentation.) This focus on the product halo is rooted in the firm understanding that in the real-world, the value of software lies in the value-added services of the product halo and not in the product or any intellectual property that the product represents.

Seven open source business strategies for competitive advantage

Individual and enterprise users of software today have many options for satisfying their computing and networking needs. Open source software (OSS) is one of them, and it is often selected because of the broader choices OSS can deliver. For instance, OSS offers enterprises the opportunity to be more self-reliant through source code modification. It allows incremental project and upgrade schedules, free rein in integration decisions, and direct interaction with the OSS community. It creates the opportunity to implement projects in a way that is consistently mindful of enterprise goals, rather than the goals of a proprietary software vendor. OSS allows enterprises to select from a broader range of hardware and software vendors and service providers than proprietary solutions. For these and other reasons, the pace of Linux and OSS adoption continues to accelerate.

The companies in the graphic … illustrate some of the OSS strategies being used to create product value, attract customers, and generate revenue. Each of these strategies and models is explained in greater detail in the following pages.

The Optimization Strategy – one layer of a software stack is "modular and conformable," allowing adjacent software layers to be "optimized."… Winners … are the adjacent, interdependent layers of the software stack, the layers where applications are optimized to achieve greater value, and where, correspondingly, better pricing power exists.

The Dual License Strategy – offers free use of its software with some limitations, or alternatively offers for a fee commercial distribution rights and a larger set of features … So what is the incentive for dual license vendors to license software without charge? A free option facilitates new business in a number of ways, including improved customer awareness and faster adoption, stronger competitive positioning, and a large base of users to find bugs and recommend improvements to the software.

The Consulting Strategy – … in 1999, Clay Shirky said: open source suggests an almost pure service model, where the basic functionality costs nothing, and all the money is in customization…

The Subscription Strategy – According to Culpepper, "revenues from services — both maintenance and consulting — increase in proportion relative to revenues from licenses. Move out to the 20-year mark, and the typical software company will have $2 of services for every $1 of licenses." … Unlike the NetWare software product from Novell, the Red Hat Linux distribution generates no license revenue for Red Hat. But clearly Red Hat maintenance revenue is increasing at a faster rate than Novell maintenance revenue…

The Patronage Strategy – When a company contributes open source software to an independent organization, it anticipates that a de-facto standard and supporting community will converge around that contribution… To succeed with a patronage strategy, the patron must deliver more than just source code. There must also be leadership and consistency… The Mozilla project continued to deliver buggy, late releases, and by January 2004, Microsoft had gained 95% market share… Eclipse – by commoditizing the framework, IBM can add value higher up the development tool chain… but in the relatively near future open source will infringe on those domains, and IBM… will have to look to other areas to add value.

The Hosted Strategy – In a January 2004 interview with Java Developer's Journal, Scott McNealy gave the following prediction: Software licensing and deployment models will be radically simplified. 2003 was the year we saw a bunch of companies finally get the service provider model right. Companies like Salesforce.com, eBay, and Google, are in the software business, but they don't sell their software, they let you use it or rent it. You're going to see a lot more activity in this space in 2004.

The Embedded Strategy – Hardware vendors should utilize standards and commodities, including Linux, as a platform strategy, and move up the chain by developing software that actually creates value. Set-top vendors, for example, might be more viable businesses today if they had pursued truly open platforms and standards.

Open Source As A Business Model

Why is reBlogger 4.0 going to be a hosted solution?

Any user of the current version of Microsoft Office could suggest tweaks and improvements. One word: clippy.

Users are fabulous at providing feedback to software they use and are familiar with. Software companies rely heaily on user feedback to improve the existing product that the users are already famliar with. Users are not good at describing how to improve products they don't use or don't understand.

reBlogger has that exact problem. No one can help us build it, because they have never seen it before! It also has the problem of requiring to be installed, WordPress had the same issue and decided to offer a hosted solution called WordPress.com. I like their explanation of why they started the hosted WordPress.com to complement their original WordPress product:

WordPress was famous for its 5-minute install, but as simple as we could make it the barriers to getting a WordPress blog were still fairly high and technical. Enter WordPress.com, a more limited version of WordPress that is hosted and completely maintained. Thousands of people every day are creating blogs on the WordPress.com service, which has just begun to explore its capabilities.

Many people have played with the online services of memetracker, technorati and the other services – but even these people struggle to understand what reBlogger does for them. We tried providing online videos and a release notes page but this has still not resolved the problem.

reBlogger has three problems:

1. it requires installation and specific pre-installed software (.Net, MS SQL)
2. reBlogger solves problems that most companies perhaps don't yet know they have
3. We use too many nouns that aren't in wikipedia (haven't gained a large enough audience)

Is there a market for what we are building? Absolutely!

The blog wave is gathering speed – it doubles every 5.5 months – so this problem of managing information is only going to grow. The need for reBlogger is going to become intense. But unless people can get their hands on it and play with it – we're not going to break through.

We can see the same problem for every innovative product. Back when everyone was riding horses, Henry Ford was building something the people didn't know they needed and could not have described – until they saw it and used it. Henry said:

“If I asked people what they wanted, they would have said ‘faster horses.’ ”
– Henry Ford, apparently as he is quoted in the London Observer

Hehehe. People didn't know they wanted cars – but they did. This is a significant problem for any first mover. While Henry got the next generation big picture right, he vastly underestimated how important the feedback from users us. He obstinately said:

"You can paint it (the car) any colour – so long as it's black."
– Henry Ford

That was a huge mistake: everyone wants cars in their own shade of color!

In the social/blogging world what people want is to express themselves and to get some level of control over the software that they use. That's the reason for the success of WordPress widgets and TypePad widgets. Combine that with open source (wordpress.org has the free PHP GNU source) and the end result of user extensions and playing around is quite unexpected: a WordPress Comic theme. Read From Weblog to CMS with WordPress.

Users are phenomenally good at giving advice about products that they use. A company that doesn't listen to feedback and act on it rapidly will lose out. We must strive to listen to what our customers want.

If you're interested in how revolutionary reBlogger is, listen to this interview with Robin Good Digg-In-A-Box… the interview. He makes some interesting comments about our functionality and how it plays into the whole blogosphere and newsmastering.

We have a strong responsibility to our passionate users

If you read this blog regularly you'll know that I try record good examples for our company to reflect on. These could be bits of advice or business strategies or stimulating user interfaces.

In this post "Automattic gets a little funding" Matt makes a comment that I strongly value:

The best thing that can ever happen to a web service is to have passionate users. Users that notice and email you the second there’s a database problem, users that really push the limits of what you can provide, and users that are phenomenally successful and bring thousands of others to your doors.

As a service provider, you have a strong responsibility to these folks. They’re putting their life online with you, they deserve nothing less than 100% uptime. They tell all their friends to try you out, they deserve for the experience of the hundred thousandth user to be as great as the tenth.

Automattic is the maker of WordPress, Akismet, Ping-o-Matic and other services we know and love. I enjoyed reading this VC perspective on why they invested in Automattic.

During this time, I've been able to watch WordPress go from its first genuinely commercial grade release (I was at the release party where they had the laptop on the counter ticking off the number of downloads) to over 1 million downloads, a pretty phenomenal thing for an unfunded band of hard core coders with not an iota of time or money dedicated to marketing.

Sounds like us! Go team! 😀

Blog revenue sharing – paying the content creator

Redux – I'm revisiting the revenue sharing topic.

DotNetKicks has an interesting solution to sharing the revenue. They have combined their revenue generation model with a model to encourage submissions by using your AdSense ID. How it works is this: 50% of the times your story submission is displayed you earn that money.

So the revenue is shared between the site ID and the editor ID (the person who listed the post). But what about the content creator (the author of the post)? Shouldn't we be sharing the $ with the owner and author? Yes of course. But this raises the problem: how do we get the YPN ID of the owner so we can pay them?

I have a suggestion on this. Before you read this I suggest you delve into my previous suggestion about blog content ownership and control where I suggest we should extend the RSS spec to include a "robots.txt" kind of idea so that the owner can exert control of the content throughout the life of the content, no matter where the content goes or how it is used.

Now, as we develop the next version of reBlogger, I am wondering how I can share revenue with the creators of the content that we republish.

Here is my idea: you've probably seen how to claim your own feed on Feedster and Technorati? Now what if a publisher (an athor) could place their YPN ID somewhere (in their feed?) and whoever displays their content can/must/should use their YPN ID and share the revenue. The issue of can or must or should would be stored in the RSS version of a robots.txt (you really should read: blog content ownership and control)

If there is an uptake of this idea, then YPN or Google AdSense or whatever could easily become the main vehicle of revenue flowing around the internet. PayPal is the current mode of small payments, but the use of YPN/AmazonSense IDs would quickly overhaul that… simply because of the sheer speed of growth in the size of the blogosphere and the amount of republishing that is happening through products like reBlogger.

Here are some of my previous posts on revenue sharing:

• A huge vote for us
• FeedFlare – building longevity into blog posts
• blog content ownership and control
• Content theft or revenue generation?
• Sharing affiliate revenue

GCalendar + GMail + Search = new functionality!

So you've seen GMail and Google Talk (IM) being integrated which resulted in Google Talk being placed right there in your GMail. That was ok. Nothing terribly new or innovative though.

Now try this:

1. sign up for GCalendar and wait a few days (for the new menu bar to pop up in the top left of your GMail window). The two are now connected.
2. Now send yourself an email (to GMail) in which you invite yourself to dinner tomorrow night. Read that email in GMail.
3. Notice the "Add to calendar" offer on the right to automatically add an event to your GCalendar based on the invitation in the email? Notice that it has "read" your email and correctly identified your details, the date and time. Cool huh?

It's thanks to GMail being integrated with GCalendar.

Think about that for a moment. How did it know that the email contained an invitation to dinner, the day and the time? The natural language ability of the Google search engine is being integrated into the other apps.

They appear to have a remarkable ability to understand commonly spoken language, if they can "read" that the email is an invitation and can correctly pick the event, the day and time and offer to add it to GCalendar.

What if they keep doing this right across all their applications? I just blogged about Office 2.0 in prepration for this post, because this is where the action really happens. Those Office 2.0 applications all stand alone and don't integrate (think MS Office or Open Office). But further than that, they have no hope of replicating Google's ability to understand natural language either, so they won't be able to compete with the functionality that Google provides.

I'm suggesting that Google will integrate their technologies in really useful ways BECAUSE they can understand natural language so well. The upcoming WinFS wanted us users to "mark up" our documents so computers can understand the contents of the documents, but Google Desktop forged ahead and learned to understand our documents – not needing us to mark them up. Natural language came to market first – and WinFS got canned.

The only remaining two questions are:

1. When will GOffice arrive and what will the integration be like?
2. Will Microsoft be able to integrate their natural language stuff (if they have any) into their Office Live stuff?

I'd like to hear your thoughts and ideas.

10 things a startup (like us) should do

10 Rules for Web Startups

1. Be Narrow
2. Be Different
3. Be Casual
4. Be Picky
5. Be User-Centric
6. Be Self-Centered
7. Be Greedy
8. Be Tiny
9. Be Agile
10. Be Balanced

Google's 10 rules of mananging knowledge workers

1. Hire by committee
2. Cater to their every need
3. Pack them in
4. Make coordination easy
5. Eat your own dog food
6. Encourage creativity
7. Strive to reach consensus
8. Don't be evil
9. Data drive decisions
10. Communicate effectively

First movers and followers

Don Doge wrote his Innovate or imitate post. It's worth reading.

My memory is that VisiCalc was slow to adopt the DOS platform. Lotus 123 moved ahead on DOS and achieved market leadership, but failed to jump onto the Windows platform fast enough. Excel did make the move and the rest is history.

The trend there is clear. The question for our company is… what the next platform that will separate the leader(s) from the pack.

He goes on to list other examples:

• AltaVista -> Google
• Napster -> iTunes
• VisiCalc -> Lotus 123 -> Excel
• Word Perfect -> Word
• Netscape -> Internet Explorer
• Apple Newton -> Palm Pilot -> Blackberry
• IBM PC -> Compaq -> Dell
• Double Click -> Google Ad Sense
• Ofoto -> Flickr
• Compuserve -> AOL -> @Home -> Comcast & Verizon

His reasoning is excellent and well worth reading. Here is the punchline:

Why did the fast followers take over market share leadership?

• Better business model (Google, Ad Sense, Dell)
• Better market position (Word, Excel, Comcast, Verizon)
• Better timing (iTunes, Flickr)
• Better platform choices (Blackberry, Word, Excel)
• Better management (all the fast followers)

His wrapup is great:

Lessons for entrepreneurs;

• Never stop innovating
• Build a well rounded management team early
• Value sales and marketing talent as much as technical talent
• React quickly to disruptive technologies or business models
• Don't be too proud to imitate when it makes sense

If you're into learning about management, I recommend you click through to Innovate or imitate and read it.

The cathedral and bazar

Read this to understand the cathedral and bazar metaphor. Raymond describes the cathedral as closed and proprietary, but I see it differently.

I think the cathedral is technorati and the bazar is the wild west of millions of competing tiny blogging websites. The only time I can think of when a cathedral lost was when the walled-in AOL lost to the sprawling web. (Their real failure was to try and milk their enclosure for far too much money.)

The cathedral always wins if it embraces the efforts and contributions of it's users. Centralization and grouping always occurs in society. Two political parties survive to compete. One or two software companies survive to compete. One Linux kernel survives as the core – if there were too many then Linux would be a bazar, but it's not, it's a cathedral. XBox Live (centralization of logins, subscription, notification – cathedral) is so successful that Playstation has decided against their "federation" approach (each software company does their own thing – bazar) and so there will be a centralized (cathedral) server for the PS too. (Pun intended).

I am 100% sure that the cathedral approach will always win – if they embrace their users. All the content may be created in millions of blogs, but it will be used (viewed) on the site that displays it in the most useful way. The users (viewers) always go to the place where all of their needs are met, this is why Yahoo (by buying del.ico.us, flikr and other social software) will win with their Yahoo 360 integration across so many useful systems. Google is also spreadng itself across many related topics. MS Office and BackOffice taught the world that the one who covers most of the needs of the users in an integrated package will win.

reBlogger does that well by covering so many content and SEO topics in one go. Take a look at my tongue-in-cheek post about how to make a free reBlogger to see the fairly long list of things we do well.Having greater revenue on one site means that site has more income to pay for innovations – which in turn encourages more users to come to them. This is the positive cycle that Technorati has going for them: reinvestment into more user-oriented and useful features. This centralization and reinvestment is one of the reasons why the cathedral always wins.

At the moment the competition between sites is focused on "coolness" (one word: Ajax) but as every site gradually gets the same coolness (voting etc.) there will be a shift to functional and useful and productive. Look and feel is low hanging fruit, everyone can get that relatively easily – but usefulness is fruit that is higher up the tree, it's harder to reach.

Ten Things To Think About

Guys, as we build our system, let's keep these in mind. (Thanks to Dion Hinchcliffe) What a tremendously insightful list of guidelines! Rachel Cunliffe simply calls it "me first". both posts are excellent reading.

Encourage Social Contributions With **Individual Benefit**

Make Content Editable Whenever Possible

Encourage Unintended Uses

Provide Continuous, Interactive User Experiences

Make Your Sure Your Site Offers Its Content as Feeds and/or Web services

Let Users Establish and Build On Their Reputations

Allow Low-Friction Enrichment of Your Information

Give Users the Right To Remix

Reuse Other Services Aggressively

Build Small Pieces, Loosely Joined

I think the key point that Dion is making, which underpins all the rest, is this:

The idea is that most people will not spend the time to contribute content or enrichment to a web site unless they are getting something out of it. With social bookmarking, it's the fact that your bookmarks are uniquely valuable to you personally, regardless of whether they are socially shared.

No matter how great our ideas are, how flexible, how WS integrated, how small, how layered how whatever… the contributor must receive real and immediate value. Only after that can we expect submissions and only then after that can we expect our social software to kick in and begin mashing or enhancing the value of having brought information together.