how to join the web ecosystem

How to join the Web EcosystemMatt McAlister

Yahoo! Developer Network

TOCTOCTOCTOC

• What is the Web Ecosystem

• Opening Out

• Opening In

• Network Effects

• Advertising

Ecosystem

Software stacks are made of dependenciesSoftware stacks are made of dependenciesSoftware stacks are made of dependenciesSoftware stacks are made of dependencies

Ecosystems are made of interEcosystems are made of interEcosystems are made of interEcosystems are made of inter----dependenciesdependenciesdependenciesdependencies

• Hosts

• Parasites

• Reproduction

• Food chains

• Producers

• Consumers

• Evolution

Platform concepts comparedPlatform concepts comparedPlatform concepts comparedPlatform concepts compared

HBR, “Platform-Mediated Networks:Definitions and Core Concepts”, Jan 2007

ItItItIt’’’’s all about platforms, not destinationss all about platforms, not destinationss all about platforms, not destinationss all about platforms, not destinations

“I have really stopped thinking of Hot-or-Not as a destination site and worry about how many people are using our service no matter where they are. The concept of a destination is so 1999. I think you are going to see a big shift. People will go where they will go. The world is evolving. Sites like HotorNot are starting to see themselves as services and less as destinations.” -- James Hong, CEO of Hot-or-Not

Source: http://www.techcrunch.com/2007/10/16/should-hotornot-become-just-a-facebook-app/

OOOO’’’’ReillyReillyReillyReilly’’’’s Make/Craft Magazines in the wilds Make/Craft Magazines in the wilds Make/Craft Magazines in the wilds Make/Craft Magazines in the wild

Related example: Motorcycle manufacturingRelated example: Motorcycle manufacturingRelated example: Motorcycle manufacturingRelated example: Motorcycle manufacturing

“In contrast to more traditional, top-down approaches, the assemblers succeed not by preparing detailed design drawings of components and subsystems for their suppliers but by defining only a product's key modules in rough design blueprints and specifying broad performance parameters, such as weight and size.

The suppliers take collective responsibility for the detailed design of components and subsystems.

Since they are free to improvise within broad limits, they have rapidly cut their costs and improved the quality of their products.”

John Hagel and John Seely Brown, Connecting Globalization & Innovation

Opening Out

Opening Out: Opening Out: Opening Out: Opening Out: BloggingBloggingBloggingBlogging/RSS/RSS/RSS/RSS

Give others machineGive others machineGive others machineGive others machine----level access to your datalevel access to your datalevel access to your datalevel access to your data

Publisher APIs

startup.comstartup.comstartup.comstartup.com

mysite.commysite.commysite.commysite.com

newapp.comnewapp.comnewapp.comnewapp.com

API Example: API Example: API Example: API Example: FlickrFlickrFlickrFlickr

Opening Out: Pipes Opening Out: Pipes Opening Out: Pipes Opening Out: Pipes mashupsmashupsmashupsmashups

Opening In

The Importance of User DataThe Importance of User DataThe Importance of User DataThe Importance of User Data

“One of the key lessons of the Web 2.0 era is this: Users add value. But only a small percentage of users will go to the

trouble of adding value to your application via explicit means. Therefore,

Web 2.0 companies set inclusive defaults for aggregating user data and building

value as a side-effect of ordinary use of the application… They build systems that They build systems that They build systems that They build systems that

get better the more people use them.get better the more people use them.get better the more people use them.get better the more people use them. ”

Tim O’Reilly“What is Web 2.0?”, September 2005http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html

Opening In: Community matters more than their Opening In: Community matters more than their Opening In: Community matters more than their Opening In: Community matters more than their commentscommentscommentscomments

Opening In: Opening In: Opening In: Opening In: InstructablesInstructablesInstructablesInstructables

Opening In: Opening In: Opening In: Opening In: WesabeWesabeWesabeWesabe

Misguided IncentivesMisguided IncentivesMisguided IncentivesMisguided Incentives

• "An act of love drastically changes meaning when one person offers the other money at its end, and a dinner party guest who will

take out a checkbook at the end of dinner instead of bringing flowers or a bottle of wine

at the beginning will likely never be invited again.“ – Yochai Benkler, Coases’ Penguin

• "I've never seen UGC sites as the least bit

driven by money. They are driven by pride, the desire to be first, reputation, whuffie. But dollars? That often screws it all up.“ – John

Battelle

Network Effects

The Network is the ComputerThe Network is the ComputerThe Network is the ComputerThe Network is the Computer

The network effect is a characteristic that causes a good or service to have a value to a potential customer dependent on the number of customers already owning that good or using that service.

For example, by purchasing a telephone a person makes other telephones more useful.

http://en.wikipedia.org/wiki/Network_effects

Last.fmLast.fmLast.fmLast.fm vsvsvsvs PandoraPandoraPandoraPandora

This battle is nearly overThis battle is nearly overThis battle is nearly overThis battle is nearly over…………

…………or is it?!or is it?!or is it?!or is it?!

Last.fmLast.fmLast.fmLast.fm is my data brokeris my data brokeris my data brokeris my data broker

Artists I like playing soon and nearbyArtists I like playing soon and nearbyArtists I like playing soon and nearbyArtists I like playing soon and nearby

Advertising

Implicit user data can drive $Implicit user data can drive $Implicit user data can drive $Implicit user data can drive $

Implicit user data can drive $Implicit user data can drive $Implicit user data can drive $Implicit user data can drive $

Advertising networks and exchangesAdvertising networks and exchangesAdvertising networks and exchangesAdvertising networks and exchanges

Conclusion

Hire more engineers…!

The efficiency war is hereThe efficiency war is hereThe efficiency war is hereThe efficiency war is here

"The average export price of Chinese [motorcycles] has dropped from $700 in the late 1990's to under $200 in 2002. The impact on rivals has been brutal: Honda's share of Vietnam's motorcycle market, for instance, dropped from nearly 90 percent in 1997 to 30 percent in 2002.“

ResourcesResourcesResourcesResources

Books, Papers, Articles

• “Connecting Globalization & Innovation”, John Hagel and John Seely Brown

• “The World Is Flat”, Thomas Friedman

• “What is Web 2.0”, Tim O’Reilly

• “Coase’s Penguin”, Yochai Benkler

• HBR, “Platform-Mediated Networks:Definitions and Core Concepts”, Jan 2007

Blogs About Publishing Business

• Rex Hammock

• Paul Conley

• Scott Karp

Important Industry Blogs

• PaidContent

• ProgrammableWeb

• Umair Haque’s Bubblegeneration

• Fred Wilson

• Lawrence Lessig

• John Hagel’s Edge Perspectives

• Nick Carr’s Rough Cut

Thank you.Matt McAlister

http://www.mattmcalister.com/

mattmcal@yahoo.com

408-349-2705