broadstuff

Dave Winer on Twittercrashes:

Some guidelines for potential Twitter-competitors.

1. I don't like names with the word "killer" in it -- even in private. It's the wrong idea. No one will kill anyone. And names you use in private have a way of leaking out in public.

2. Don't use the term crowdsourcing -- it betrays a perspective that's arrogant and wrong. I am not part of a crowd, I am a creative important person. Most Silicon Valley companies have this attitude. It's a good vector for competing. Our users are sentient human beings, individuals. Important not just as a collection of people.

3. Most important, any service meant to compete with Twitter must be 100 percent compatible with the Twitter API. Porting of apps that build on Twitter means making the domain an option, where you call twitter.com it must be possible to change it to mytwitterclone.com, for example.

4. It must be possible to use your clone when Twitter goes down and then switch back to Twitter when it comes back up with no loss of data. If you want smoothe entry into the market you must serve as a backup, earn your place with the users. Everyone will love you because it gives Twitter a very real concrete incentive to become more reliable.

5. To everyone, twitter.com included -- this is a utility like email or IM. Reliability is key. If it's going to be used in business (very powerful idea) then auditability is essential. To assume that users love the product is not a good idea, any emotional connection becomes a negative if you can't keep the system up.

Damn...there goes my plans for Killercrowdsource.com !

But its a very good 5 point plan for any Telco or other Service Provider looking to build a simple UC service.

But is there a point 6 - don't build big scale stuff in Ruby on Rails? Seems to be a common factor in quite a few constant-outage Web 2.0 systems

This post caught my eye while looking at Techmeme this am:

Pedestrians repeatedly thumbing their cell phones could be playing the latest mobile game, but it's just as likely they're microblogging addicts updating their Twitter accounts. Twitter's short-form service makes it ideal for two-sentence contributions from mobile phones, IM services, browsers, and desktop apps. Here are a few ultra-convenient third-party Twitter-updating apps.

The article goes on to do a good service to readers and list all the 3rd party apps that Twitterers can use to get their fix in our converged world, but the pedan...I mean analytical part of me got very grumpy at the "just as likely" bit above.

The total number of Twitterers is about 1 million globally, of which a (significant?) minority are on mobile phones - say 500,000.

The number of people with mobile phones is far far greater - in the US and EU combined (let us assume ALL Twitterers are in those areas) there are about 500m phones knocking about. Even assuming only 10% are playing games etc, thats still 50m.

Doing the maths, 500,000 / 50m = 1%

So in fact, the correct statement is that its c 1% likely that they are microblogging addicts.......

I feel better now

....I am getting increasingly fed up with those blogs that are pumping graphics through my RSS reader. I don't want them, its wasting my page real estate - I like line items like email so I can scan them quickly. Yes, I can go into my settings and change it, but its wasting my time

(Clarification - I mean the thumbnail graphics that appear in the list of headlines on the RSS reader aggregation page - see picture below)



These are fairly recent, in the past graphics in a blog didn't show up, but its clearly a new "value add" - I don't think its my reader (MyYahoo) as lots of the feeds don't have a "show image" option, even though they have in-blog graphics, so clearly its an upstream thing.

So, I've started to turn off my "marginal" blogs who use this...next step is bigger volume ones

You know who you are.........................

(Update - some good points re mobile feed from Ian Delaney in the comments, and I agree with him - but thats different to what I'm on about, there its trying to reproduce the actual graphics in the blog post)

Ian Delaney has a good writeup of the London VRM Hub meeting over here - I haven't had time to blog it yet, but as he says, its the 50% of unnaccountable Ad/Marketing money that is a good initial target - also the wasted effort in the production / inventory management process if demand can be ascertained before production.

Although I am a VRM fan, I am always very curious as to why it hasn't got farther, faster, sooner - after all we were talking C2B at least 10 years ago.....and in my view understanding the barriers to adoption early is very important in ensuring new ideas don't fall into the Chasm!

To be fair, the power of broadband, the lower technology costs today, and the sheer penetration of the web have chanegd the economics of the internet since 1997, but there are still practical barriers to adoption.

The barriers as I see them are 3 - fold:

(i) Transaction costs vs item value have an impact - I've written a quick note on that over here

(ii) Why so little to date - as I noted last night the basics are already done in some industries, yet takeup is slow - one can hypothesize slowness of retailers, but I don't think thats all there is to it, as the concept is already used in some sectors. I suspect there are obscure transaction cost blockers that prevent industries using this without prior investment.

(iii) The "Keep it Simple" vs "There be Bad guys" issues - where there is money, there is fraud, which begets security, which adds weight etc etc

One thought I took away from the meeting is that VRM will happen initially for big ticket items (ie Transaction value make it worthwhile absorbing the extra social transaction costs) or very small (eg the £50 insurance on a credit card makes it possible to have simple, probably less secure transactions) - I can feel a 2x2 matrix coming on

The other thought I am have is the "Be careful what you wish for" aspect, this was made clear in the airline seat example - if everyone is capable of specifying exactly what they want, there will be a tradeable market - so the price of that much desired aisle seat with legroom will rocket, and the mid-row seat in the middle of the plane will plummet.

That said I think the blogging metaphor is very apt.

Article in Read/Write Web about an interview with (Sir) Tim Berners Lee (points to a more complete transcript on ZD Net as well):

“There’s an awful lot of data out there. And I think, one of the huge misunderstandings about the Semantic Web is, ‘oh, the Semantic Web is going to involve us all going to our HTML pages and marking them up to put semantics in them.’ Now, there’s an important thread there, but to my mind, it’s actually a very minor part of it. Because I’m not going to hold my breath while other people put semantics in by hand… So, where is the data going to come from? It’s already there. It’s in databases…”

Our hypothesis is that the Semantic Web will be initially implemented in verticals, where the the total number of terms used is smaller and thus manageable (See earlier posts here and here), and I think this is also an implicit recognition of that, because most databases are in verticals. Some verticals are far more advanced in using common terms (eg EDI) to communicate than others

In fact I'd go so far as to say the Semantic Web is here, now - just very unevenly distributed

In addition, there was an allusion to the area we think will most drive the semantic web, ie the needs of machines on the 'net - they are just not smart enough to understand context, and thus will need a simple taxonomy (an Esperanto for sensors - the Pidgin protocols?) to function.

Incidentally, this could also have huge benefits for people, eg making it easy to have one identity and not have to sign in multiple times with names, addresses etc onto multiple systems.

Update - Paul Miller has a vodcast interview on the subject over on Nodalities (my RSS reader too is unevenly ditributed )

Update - StoweBoyd has commented on this post that Esther Dyson made, (we commented on our view that she was possibly in error re Dopplr over here, mainly because the functions she ascribes to closed systems like Dopplr will be done "in the wild" soon) but he makes an interesting point:

I wrote years ago that in the future, all e-commerce would be socialized. Looks like we are about to pass over that horizon.

Its an interesting idea, but we were debating this at a recent VRM meeting, and I've now come away with the realisation that not all e-commerce will be socialised per se - there is going to be a subsection where either the value of the transaction, or the transaction cost of providing it, will make a pure price based transaction necessary.

In essence a pure price finding transaction takes away the need to socialise (which has its own frictions and costs) as it is a very simple, low cost transaction, and in some environments it will be the most efficient, or the only transaction cost that market will bear.

So the chatterati are full on about Google, Ad values declining and thence onwards to recession, depression and downright doom. (If you want to be truly Recursivist just go to Google Blogs and hit "Google Recession" ). The doom and gloom scenario goes someything like this - the NYT version:

Investors have focused with new intensity on Google’s so-called paid clicks, which grew at 30 percent in the fourth quarter, because the search and advertising giant earns the vast majority of its revenue from text ads, for which it is paid only when users click on them.

Umm...grew at 30% in Q4 - OK, thats a real problem? But soft, that ever reliable datasource ComScore has put the wind up the collective investing knickers:

investors were spooked by a report by the research firm comScore that said clicks on Google ads the United States were flat in January when compared with a year earlier.

More sanguine minds may like to look at this data from HitWise on Google traffic to shopping and retail sites - is that a cyclic pattern I see before me? Could I possibly predict that in January through March people buy less, as opposed to the peak before Xmas?.



Question therefore is why all the hullabaloo now. Is this real, or is this just overall recession anxiety projected on the seemingly recession proof Google (well according to their EU CEO anyway)....

Maybe there were people who actually believed all that recession proof tripe (apart from certain analysts of course, who were famous for writing one thing but believing another....)

As we noted before when Forrester claimed Social Nets were recession proof (just before all the data on Facebook etc audience collapse came out, of course - the world, as you know, rests on a molten core of irony) one should always head for the hills - or at least sell the stock - when such pronouncements are made, and wait for the inevitable discovery of the opposite.

So, following this Broadstuff Universal Stock Tracking (BUST) system, its clearly time to buy Google

Longer term however, you have to wonder about the people who perenially pimp Google - by definition margins erode in any market as competitors enter, and their core tech is old and increasingly less fit for purpose, spawning an increasing "new search" industry.

Thayer Driver has done a great survey of Twitter behaviour....her heads up on her blog over here is:

- People mainly use Twitter mostly to see what their contacts are up to (50.6%).
- Most respondents to this survey are followed by twice the amount of people (101-200 followers) than they follow themselves (51-100 followers).
- You’re most likely to become un-followed if your Tweets aren’t deemed relevant to your followers
- Half the respondents (48.5%) had Twittered drunk…
- … Yet thankfully most people (65.7%) have never regretted a Twitter post

However, far more detailed and interesting to study is the full report, on PDF over here. I was most curious about the "Bad Behaviours" on Twitter, most specifically what makes people stop following someone. Results are:



Relevance is a big thing, clearly - both volume and value - and I suspect its the belated realisation by early adopters that the contents of their lunchbag etc are of minimal interest to others that has driven what to me is Twitter's greatest shift over the last year, i.e. people actually starting to talk about useful stuff and not the drivel it initially sarted with.

Very interesting post by uber-blogger Dean Bubbley, referring to another interesting post from Mobile Opportunity about the changes in the mobile industry that the Internet is forcing.

Readers of this blog will know that our view is that the Future of Mobile is no longer in the hands of the mobile industry per se (see these posts here, here and here) and these two posts push these thoughts another big step forward

Firstly, why the Mobile market is in trouble - we've mentioned before that the problem with mobile is the proliferation of Operating Systems and no standard device middleware (the motor car and aircraft industries took less time to decide how to lay out control systems than Planet Mobile, never mind the PC industry). Mobile oppotunity quotes from this post by ex-Palm guru Elia Freedman

From the technical perspective, there are a couple of big issues. One is the proliferation of operating systems. Back in the late 1990s there were two platforms we had to worry about, Pocket PC and Palm OS. Symbian was there too, but it was in Europe and few people here were paying attention. Now there are at least ten platforms. Microsoft alone has several -- two versions of Windows Mobile, Tablet PC, and so on. [Elia didn't mention it, but the fragmentation of Java makes this situation even worse.]

I call it three million platforms with a hundred users each (link).

The second technical issue is certification. The walls are being formed around devices in ways they never were before. Now I have to certify with both the OS and with each carrier, and it costs me thousands of dollars. So my costs are through the roof. On top of that, the adoption rate of mobile applications has gone down. So I have to pay more to sell less.

Then there's marketing. Here too there are two issues. The first is vertical marketing. Few mobile devices align with verticals, which makes it hard for a vertical application developer like us to partner with any particular device. For example, Palm even at its height had no more than 20% of real estate agents. To cover our development costs on 20% of target customer base, I had to charge more than the customers could pay. So I was forced to make my application work on more platforms, which pushed me back into the million platforms problem.

The other marketing problem is the disappearance of horizontal distribution. You used to have some resellers and free software sites on the web that promoted mobile shareware and commercial products at low or no charge. You could also work through the hardware vendors to get to customers. We were masters of this; at one point we were bundled on 85% of mobile computing devices. We had retail distribution too.

The other issue is the amount of fiddling that the average Mobile play expects the user to do, on what is fundamentally a hard-to-use UI. The points Dean makes especially stand out to me, as they resonate with some work we are doing at the moment:

In particular, the following use cases remain for native (or virtual machine) device applications:

- Pre-installed applications at the factory.
- Pre-installed applications by the operator or other service-provider (eg RIM)
- Pre-installed applications by the retailer or distributor
- Certain markets are a bit more application-savvy (eg the US, with its history of PDA users), although other markets still view installing (or even thinking about) handset software as a geek-only activity.
- Applications installed by enterprises for their end users
- Applications like VoIP that need access to underlyig device APIs and capabilities like codecs.
- Applications (maybe IMS apps) for which carriers are able to design & enforce a complex over-the-air automated download & install process. Likely to only work in situations where the user has a deeply-customised phone, rather than a 'vanilla' device.
- Games, and even then only by certain demographics.
- End-to-end services coupled to specific devices or a limited range, rather than generic handsets (eg BlackBerry, Amazon Kindle)

Bottom line - I totally agree with Michael that web-based applications are becoming much more important relative to "installed" mobile apps.

We've said this before, but I'll Mobile Opportunity guys say it again:

.... there is now an alternative platform for mobile developers. It's horribly flawed technically, not at all optimized for mobile usage, and in fact was designed for a completely different form of computing. It would be hard to create a computing architecture more inappropriate for use over a cellular data network. But it has a business model that sweeps away all of the barriers in the mobile market. Mobile developers are starting to switch to it, a trickle that is soon going to grow. And this time I think the flash flood will last.

If you haven't figured it out yet, I'm talking about the Web. I think Web applications are going to destroy most native app development for mobiles. Not because the Web is a better technology for mobile, but because it has a better business model.

Think about it: If you're creating a website, you don't have to get permission from a carrier. You don't have to get anything certified by anyone. You don't have to beg for placement on the deck, and you don't have to pay half your revenue to a reseller. In fact, the operator, handset vendor, and OS vendor probably won't even be aware that you exist. It'll just be you and the user, communicating directly.

Until recently, a couple of barriers prevented this from working. The first was the absence of flat-rate data plans. They have been around for a while in the US, but in Europe they are only now appearing. Before flat-rate, users were very fearful of exploring the mobile web because they risked ending up with a thousand-Euro mobile bill. That fear is now receding. The second barrier was the extremely bad quality of mobile browsers. Many of them still stink, but the high quality of Apple's iPhone browser, coupled with Nokia's licensing of WebKit, points to a future in which most mobile browsers will be reasonably feature-complete. The market will force this -- mobile companies how have to ship a full browser in order to keep up with Apple, and operators have to give full access to it.

QED, as they say

This post on Wired by the long tailed Chris Andersen is a good and detailed discussion about "free" business models. Some key notes from it:

Thanks to Gillette, the idea that you can make money by giving something away is no longer radical. But until recently, practically everything "free" was really just the result of what economists would call a cross-subsidy: You'd get one thing free if you bought another, or you'd get a product free only if you paid for a service.

Over the past decade, however, a different sort of free has emerged. The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast. It's as if the price of steel had dropped so close to zero that King Gillette could give away both razor and blade, and make his money on something else entirely. (Shaving cream?)

That third party offset model is critical in our view, as we have discussed before there is just not enough advertising revenue to go round, and its likely that VRM and similar technologies will reduce Ad usefulness anyway.

The second piece of the discussion that is key is this one, on the impact of technology advance on business economics:

Last year, Yahoo announced that Yahoo Mail, its free webmail service, would provide unlimited storage. Just in case that wasn't totally clear, that's "unlimited" as in "infinite." So the market price of online storage, at least for email, has now fallen to zero (see "Webmail Windfall"). And the stunning thing is that nobody was surprised; many had assumed infinite free storage was already the case.

For good reason: It's now clear that practically everything Web technology touches starts down the path to gratis, at least as far as we consumers are concerned. Storage now joins bandwidth (YouTube: free) and processing power (Google: free) in the race to the bottom. Basic economics tells us that in a competitive market, price falls to the marginal cost. There's never been a more competitive market than the Internet, and every day the marginal cost of digital information comes closer to nothing.

Not just consumers - it gets harder to argue that businesses should spend a fortune on something that consumers get for nowt. The Freemium will start at SoHo and divisions in Corporates and spread - free is an easy business case in corporate life as well!

The next interesting point is the transferenece of "Free" to where things are not free - ie where there are new limits:

Enabled by the miracle of abundance, digital economics has turned traditional economics upside down. Read your college textbook and it's likely to define economics as "the social science of choice under scarcity." The entire field is built on studying trade-offs and how they're made. Milton Friedman himself reminded us time and time again that "there's no such thing as a free lunch.

"But Friedman was wrong in two ways. First, a free lunch doesn't necessarily mean the food is being given away or that you'll pay for it later — it could just mean someone else is picking up the tab. Second, in the digital realm, as we've seen, the main feedstocks of the information economy — storage, processing power, and bandwidth — are getting cheaper by the day. Two of the main scarcity functions of traditional economics — the marginal costs of manufacturing and distribution — are rushing headlong to zip. It's as if the restaurant suddenly didn't have to pay any food or labor costs for that lunch.

Surely economics has something to say about that?

It does. The word is externalities, a concept that holds that money is not the only scarcity in the world. Chief among the others are your time and respect, two factors that we've always known about but have only recently been able to measure properly. The "attention economy" and "reputation economy" are too fuzzy to merit an academic department, but there's something real at the heart of both.

And another - in an interesting point, Chris alludes to the other area that is increasingly not free when he notes...:

consider this analogy: In 1954, at the dawn of nuclear power, Lewis Strauss, head of the Atomic Energy Commission, promised that we were entering an age when electricity would be "too cheap to meter." Needless to say, that didn't happen, mostly because the risks of nuclear energy hugely increased its costs.

And not only did it not happen, but ironically its going to be one of the great drivers of "Not Free" economics on the internet - its already been calculated (somewhat tongue in cheek) that a second life avatar consumes more energy than a Brazilian peasant, and that trend is not going to go away.

So, net-net Chris is probably right in the short term (ie the time taken to get your startup up, out and bought), but externalities, unseen obstacles and value transference means that in the long run the free lunch eventually gets paid for.....