A while back Jeff Jarvis made a post on Pandora, a music service that uses song classification to select and stream songs to its users.  The topic of the post was the new iPhone application that the service offers and its relative success at that point in time. 

I'd wanted to respond at the time but other issues seemed more pressing. 

But the point is important in my opinion so I'm dusting off this old, half-written post to make it.  Here's a quote from the original Jeff Jarvis post (which was posted almost a month ago at this point)...

TechCrunch says that Pandora is the killer app of the iPhone and I ag-ree. It’s the fourth most popular free app (behind obvious choices: Apple’s remote, AIM, and weather). It’s adding a new listener every two seconds. That’s the killer stat that raises the key question:

How could others use apps like this to grow?

Two things here.  First, this isn't an attack on Pandora.  I love Pandora, I use it regularly, I love having it on my iPhone, and I'm actually listening to it right now. 

That said, "a new listener every two seconds" is a good example of phrasing something to make it sound impressive.  Apple claims to have sold around 7 million or so of the first generation iPhones (who got the iPhone app upgrade for free).  Plus you have about half a million consumers buying the 3g version in the first 3 days.  That puts the total iPhone market at about 7.5 Million available buyers.  Pandora, a free program that leads to a free service, is claiming about 46,000 new users per day which means about .5% of the available market and that's at launch.  Those numbers will plummet after the initial rush for Apps. 

Again, I don't mean to lessen the accomplishment of Pandora.  Its a great product and it deserves success.  My point is only to draw attention to the excessive hype given to some products by the Web 2.0 crowd.  This is an important point.  Here's why (again from Mr. Jarvis' post)...

How could others use apps like this to grow? Simply putting content up — a la the New York Times fine but not revolutionary app — is not enough.

I think winning apps for mobile will be, like Pandora, completely personal; my Pandora is nothing like yours. They will feel live and constantly connected — I can satisfy as much musical restlessness as I can imagine without having to download.

and...

I believe some apps will have link to the real world: leave a review about where you are right now (I’ll write more about this annotation later soon). Some winners will be two-way; I’ll be connected with a live world at other edges of the cloud.

Now the whole "just add Web 2.0" mentality is more than I have time to address here but what I want people to notice is the pattern. 

Ignore Facts > Brand what you like a success regardless of whether it actually is > take the traits you like about that product and give them credit for its supposed success > Suggest/Demand every product implement those features. 

The dirty little secret of Web 2.0 is that most of the flagship products aren't that successful.  At least not in the areas that we gauge success (number of users, profits, etc...).  Yet even after being around for years they are still trumpeted by many bloggers as the way of the future. 

This isn't a statement on the merits of any of the programs/sites themselves its just an example of how the supporters of Web 2.0 have no criteria other than personal preference by which they judge success.  Yet they refer to these companies as successful and then encourage others to follow that lead.  But often times that lead isn't a path to creating a profitable business.

It's something to seriously consider when you're starting a company and trying to decide how much of your resources you'll devote to so-called "social features"

I know I just quoted a Dare Obasanjo post a couple days ago but it really is good to see him back and I think the post that inspired this blog entry is one everyone should read.

In the post, entitled "Note to Web 2.0 Companies: Early Adopters are not the Mass Market", he makes the point that the needs of the mainstream usually don't jive with those of the rest of the population.  Here's a quote...

The fact is that early adopters have different problems and needs from regular users. This is especially true when you compare the demographics of the Silicon Valley early adopter crowd which "Web 2.0" startups often try to court with the typical users of social software on the Web.  In the few years I've been working on building Web applications, I've seen a number of technology trends and products that have been heralded as the next big thing by technology pundits which actually never broke into the  mainstream because they don't solve the problems of regular Internet users. Here are some examples

I really enjoyed this post and hope everyone checks it out.  But I wanted to briefly give my own thoughts on this particular point.  Or more accurately, an argument I always hear when making the point he's making.

The argument basically goes like this: Early adopters are enough to sustain a company indefinitely.  So a company should court early adopters because they are the eventual trend setters.  As the mainstream sees how much easier the early adopters life is made by new technology they will, little by little, migrate over.  The point of this being the mainstream will eventually have to accept "Web 2.0" services on their own terms so there's no point is tailoring a service to the mainstream. 

This argument tends to rely on the service scaling down.  So you'll get people who say "sure mainstream users don't track 200 web sites like I do but once they see how easy it is for me to track 200 web sites they'll rush to track their 12 favorite web sites in the same way" 

Two points here: 

First, Early Adopters are Fickle. 

The problem with trying to survive on early adopters until the mainstream catches on is that they fall in love with every new thing.   Robert Scoble had no sooner added all 500 of his friends before he ditched Facebook for Twitter.  That lasted for about a month before he moved on to Friendfeed.  and so on. 

Scoble's one who makes a business out of cultivating his audience so he continues to update the platforms he's essentially abandoned but most early adopters aren't so courteous. 

Early adopters will never sustain a company because you can't appeal to someone who compulsively wants the newest thing.  Your product can only be the newest thing for so long. 

Second, most Web 2.0 products don't actually solve a problem

At the risk of being controversial, most of these "Web 2.0" companies are given a lot of lip service because early adopters love the concept but aren't very useful in the long term.  Does anyone really pay attention to their friend's del.icio.us links?  Maybe occasionally, when they have extra time on their hands and absolutely nothing to do, but mostly not.  If del.icio.us disappeared tomorrow I doubt anyone would be impacted that negatively. 

Blog Search is another example.  Sure vanity searching is nice but hardly necessary.  For most useful searches a standard Google search will serve your purpose much better.  The list goes on and on.  Whether its Friendfeed creating so much noise that it drowns out the useful content or Facebook which claims to keep you in touch with friends but actually just allows you to send them virtual cocktails most Web 2.0 services don't solve a problem at all. 

So unless your world is largely online and you're just looking for more ways to spend time connected these services don't help.  They certainly don't improve a person's life to the extent that a normal person would be envious of. 

My Point

Though it really wasn't the point I started out trying to make I guess my point is to expand on what Mr. Obasanjo said.  Web 2.0 startups don't just need to focus on solving a mass market problem they need to focus on solving a problem in general.  Early adopters will love you just because your new but the mainstream requires a lot more to come on board.   When trying to find that "lot more" usefulness is, as always, a good place to start.

Addendum: Sorry for the double post to anyone who subscribes via RSS.  The link was broken, when I tried to fix it the post disappeared for as yet unknown reasons (and lets be honest, I'm not going to look into is so its really a mystery for the ages)

Apparently "Web 2.0" types haven't tired of talking about the death of e-mail.  CNet's Caroline McCarthy has an article about discussions being had at the "Future of Web Apps" conference that wrapped up last week.  Here's a quote...

The way people have been talking about e-mail at the Future of Web Apps conference, you'd think it were a cell phone carrier or a domestic airline. It's antiquated, it's backward, and everybody hates it.

Kevin Marks, a Google engineer and Technorati veteran, said in a talk about the company's OpenSocial project and Social Graph APIs that e-mail is a "strange legacy idea."

"E-mail has died away for a group of users. For the younger generation, they don't use e-mail," he said, talking about the young Web users who have started to abandon e-mail for Facebook messaging and mobile texting.

...

And when a lively group of Web 2.0 elite (including Mullenweg, Digg's Kevin Rose, Pownce's Leah Culver, and Flickr's Cal Henderson) tackled a panel led by TechCrunch's Erick Schonfeld that involved creating the concept for a new Web app in 45 minutes, their end result was a product that would make e-mail less of a headache by making sure that users reply to everything. (It was done in 45 minutes, so the specifics weren't totally ironed out.)

There are basically two points here, (1) young people don't use e-mail and (2) e-mail is inefficient so businesses will stop using it in lieu of something else.

The first point is one I've addressed on this blog before.  I hate to quote myself but I hate typing something I've already said more.  Given that I quote from a post I made a few months ago entitled "E-Mail is dead, again, for like the 200th time"...

Point #1: Slate says that e-mail is dead because kids don’t use it and businesses usually end up adopting what the kids do rather than the other way around. To that, I say hogwash (though half of that is just because I don’t get to use the word “hogwash” anywhere near as much as I’d like).

Here’s the thing, I’m in my late 20s and when I was a kid I didn’t use e-mail. People seem to forget that IM has been around since the 70s and in some popular form for the last 12+ years (I used Compuserve, ICQ and eventually AIM when I was in high school). So why isn’t e-mail already dead?

Two reasons, One teenagers only talk to who they want to talk to where as adults have to deal with people they (a) don’t know and (b) don’t like. When you are an adult dealing with one of those two scenarios it helps to have e-mail. Two, adults sometimes need to document their conversations where teenagers do not. At work I e-mail as much as possible because I want to be able to trace the day I said a certain thing or prove that someone was told something they claim they never knew. Bottom line, e-mail will get adopted by today’s teenagers because it is the best tool for the jobs they will face as adults.

'nuff said.

On the second point I have a better question..."Why haven't we just fixed e-mail?"

There have been dozens if not hundreds of e-mail solutions that would virtually eliminate spam (which is the main problem behind e-mail).  All of these solutions were technologically viable so that isn't the problem and a new solution isn't going to fix anything. 

The issue is universality not technology.  Ever wonder why PCs STILL come with 3.5" floppy drives?  Because universality is hard to come by and even harder to replace.  If even a small fraction of people resist change it fails because everyone else still needs to interact with that small number. 

Which is exactly why we still have e-mail.  No one wants to maintain two solutions and everyone knows there will be hold outs who resist which is why we get stuck.

How do we get this fixed?  The easiest way is to succeed at what people have been failing at thus far and convince the manufacturers of e-mail servers to agree on a secure e-mail standard.  The second and much less effective option is for someone to create a hybrid solution that is backwards compatible AND THEN make their new solution an open standard that other manufacturers could adopt. 

But even then your asking a manufacturer to put a  lot of money into a solution they'll have to give away and which still has a very small chance of becoming the de facto standard. 

It is a very difficult problem that goes completely unaddressed because everyone just wants to spout "e-mail is dead" and then discuss pie in the sky replacements.  Software development is about defining a problem and then working to fix it.  These conference discussions ignore the problem and then go on to talk about solutions that don't fix anything. 

The reason this bothers me is because most computer users still use technology that is 10 years behind (e-mail, unconnected desktop apps, etc...) because the industry isn't addressing their actual problems.  Just once I'd like to see an industry discussion that focuses on real world problems and not just impractical theory. 

Interesting news about Google today.  Here's the quote from Clint Boulton of Google Watch...

Numerous media outlets are covering comScore's Monday report that clicks on Google's paid search links fell 7.5 percent from December 2007 to January. Reporters did the same when IDC two weeks ago reported Google's ad share dipped 0.5 percent.

Is it time to cry recession?

Google made $16.6 billion from online advertising in 2007, so I would agree that Google losing 7.5 percent of its primary financial cash cow would be a big hit to the company coffers if the figure averaged out or grew over 12 months.

It is not a sign that something is wrong with Google or its advertising business per se, not anymore than the search vendor's absurd soar to a $700+ stock share price this summer meant the company had found the fountain of youth. Finance is a fickle fancy.

I agree in that I don't think this says anything about Google.  I expect Google will have a few more flat-to-down quarters but I doubt it will matter.  Google will survive this bubble just as Microsoft, Yahoo and others survived the last.  They have a solid business model that will carry them through. 

The same is not true of a lot of "Web 2.0" companies out there who are counting on ads to get by.

It baffles me how people didn't see this "Web 2.0 bubble" following the same pattern as the "Web 1.0 bubble".  People start advertising on the web, a bunch of web startups popup funded by those ads, the bottom falls out of the ad market and those companies go out of business.  It isn't that difficult.

Yet I still see almost no acknowledgement of this in the blogs.  Worse yet, people are actually treating ad-based models as if they were the only business model.  Just one example was Steve Karp essentially claiming that in relation to the Wall Street Journal's decision to retain their paid content (I wrote a post on it)

Baffles me...

I'm not sure there's any saving the doomed Web 2.0 companies at this point.  If I have any advice it would be start cobbling together a secondary revenue source before things get bad.   Either that or combine with other like minded companies in order to create a compelling ad-network, ad-based revenue models are appropriate in some places.

My real hope here is that, when Web 3.0 rolls around, people will learn to put ad-based revenue into perspective.  Its certainly appropriate in some places but it is not and never has been the be-all-end-all.  Its just one tool in what should be an arsenal of ways to make money.

"A lot of things are free in Vegas but most of them aren't all that good"

I had a lot of reason to think about the above quote while vacationing in Las Vegas over the New Years Holiday.  But more than Vegas it got me to thinking about the "Web 2.0" world and how much of our lives are now dependent on companies that don't answer to us directly.

What I mean is that, in the old days, if your local Newspaper printed something about you that wasn't true you could call someone up and complain.  Now, if someone writes something false about you in Wikipedia and Google is indexing it for the world to see there's not a whole heck of a lot you can do about it.

This is one of the biggest problems and least discussed consequences of Web 2.0's new "Advertisement Based Economy".  By being an intermediary between you and the service you are using the advertising company is preventing you from having any hold over the company that is actually providing you with a service.  Because of that you lose the ability to hold them accountable for providing that service poorly. 

It actually adds a lot of credence to the idea that nothing comes for free.

So the question is, what can be done?  People certainly don't want to start paying for something that is currently free and web sites have no reason to listen to users while the people with the ads are providing all the funding.  What needs to happen is the middle man (a.k.a. the advertiser) needs to start advocating for the user.

This isn't unheard of believe it or not.  For all the hate that gets slung Wal-Marts' way they are actually famous for being a middle man who advocates for their customers.  If you'll recall, items you had to assemble didn't come with little mini screw drivers until a few years ago when Wal-Mart insisted that manufacturers wanting to sell through them include mini tools for the consumer. 

The Advertisers could do that too.  It would take very little effort for them to set up a web site allowing their customers to lodge complaints about sites they advertise on and then advocating for their customers against the various web properties that have no reason to listen to the users otherwise. 

The truth is, if the advertisers were smart they'd band together and form services in which you'd register with them and they could advocate for you.  In doing so they'd be getting user information that they could use to promote themselves while providing a valuable service to the user.