Category essays

Sandy and how the technology we build could serve us more effectively

Last week was a rough one here in New York City. People lost their homes, some a lot worse. We were lucky. I live downtown and all that my family and I had to deal with was no electricity for most of the week, no cell access and a lot of water in our kitchen, no one got hurt and the damage is all fixable. But the lack of basic technology services got me thinking about what could have worked differently. With all the technology that has been placed in the hands of users since the first personal computer I found it remarkable how little was useable. Let me start with a personal overview of our situation and then lay out some ideas about what could be done differently.

When Sandy hit my family and I found ourselves with:
– no power
– no cell phone access (ATT, our provider was down)
– Lack of reliable connectivity

For four days our only access to the internet at home was via one Verizon enabled iPad. Luck would have it, that this turned out to be the one Apple device you want. The iPad has the best battery of any the options available (iPhone, android phone, laptop), and the Verizon network proved to be far superior to ATT.

Yet many of the web sites we needed barely functioned. Con Edison was the worst. After 45 mins of dropped connections the ConEd website told us that they weren’t aware of an outage in our area . Power in all of lower manhattan was out and somehow the site couldn’t tell us that.  The map they had of outages had a few flags on it — those were the brave souls who persisted and reported an outage with pitch black all around them.  And from what I gather ConEd was way better than Connecticut Light and Power — their home page was still saying “Prepare for Sandy” days after the storm hit. News sites were too general, what I wanted was hyper local news. Twitter wasn’t useful. Twiter is hard to filter and the content stream moved too quickly to use effectively given intermittent connectivity. Facebook wasn’t useful, I wasn’t interested in pushing information out, I wanted to get information.

So what could have have been done differently? Here are five ideas:

1. Data and accessibility:

The data is there it just needs to be made accessible. ConEd and other utility service providers could design their websites for constrained circles of accessibility. Think of an inner most circle with no web access, just SMS. One ring outwards represents low bandwidth or intermittent access, mostly email, some web — and then the furthermost ring represents high bandwidth access. Ideally, utility websites should be adaptive across all these rings, at a minimum they should offer users the ability to navigate it at different levels, depending on the situation. So when an emergency hits users shouldn’t be faced with a site that is optimized for high bandwidth access with videos expelling things. What I wanted from the ConEd site was a simple status update of power restoration in our neighborhood. All the rest of the media and information on the website was of no use, in fact, it detracted from what should have been a simple experience.

Going one step further if ConEd and utility service providers made their basic service data accessible via API’s then it could easily be reformatted and delivered to people using the channel best suited to the situation. In the case of Sandy that would have been a simple web site, optimized for low bandwidth and intermittent connectivity, with neighborhood navigation. Someone would have made that site if ConEd and other utility providers made block level service status data available.

[update: there are a few end points that people found to ConEd data, that generated some data, for a good example see this thanks to @cmenscher who sent this to me and @ckundo who created the visualization]

And if service providers had basic API’s they could share them with each other. As @Auerbach reminded me ConEd may not actually know if power is down in your building but Time Warner Cable knows it. And the street lights have connectivity back to a central station. A little bit of data sharing could go a long way here.

2. Usability:

Utility web sites seem to have been designed primarily as marketing tools. This is backwards. The sites shouldn’t be managed by the marketing department, particularly in the case of a utility where customer churn is basically nonexistent. Take a look at the coned twitter feed: https://twitter.com/conedison. The number of messages with media, essentially promotional,is high. But ConEd and CLP are were at least active on Twitter this past weekend. In contrast AT&T’s marketing department seem to have gone home for the weekend.

Socialmedia is opening up channels for people to talk to companies and companies to talk to customers. The departmental lines between marketing and customer service are a fabrication of an era that is past. Customer service is becoming marketing and it should have primacy in situations like this. Companies and brands are starting to think they need to produce media in order to talk with customers. This makes sense in a marketing context but in a situation like Sandy it doesn’t. I’m not interested a Utilities video channel. What I want is usable information.

3. Simplify, Simplify, think /status

As technology advances systems become complex. During emergency situations that complexity needs to be unwound so that basic services remain available and accessible – the first and most basic is an awareness in an organization that systems, critical systems need to scale up and down this curve of complexity. If that awareness can become part of how we design technology then as new, more, complex functionality is added to a product will make the roll back actually possible.

Another approach to simplifying or unwinding a complex systems is for there to be basic standards that system providers agree to. Consider really simple things — i.e.: what if service providers adopted a standard so that users knew that if they went to www.coned.com/status or www.ATT.com/status or Twitter.com/status they would get a network status update. In emergencies simplicity of navigation goes a long, long way. There are simple solutions and while this disaster is fresh in our minds is a good time to consider a few.

4. City, local, government data hubs:

Government and city government’s first job is to keep citizens safe to that end government could play an important role as a hyper local data aggregator. If the service providers made service/status data accessible via API’s then cities could easily aggregate that down to a neighborhood level. What I really needed was a single page with aggregate information for power, cell access, flood levels for our neighborhood or even block.  This is a prototypical public good that local governments could offer citizens. Match that page with a simple notification system to alert me of changes and we would have a very simple, usable, local status page.  Note the data I’m talking about is not account level data, its simple service level availability data. This isn’t a radical shift in the role of government, or governments access to data — at some level data becomes a public good and government are the most natural and benign aggregator of that data.

5. Towards a Machine readable city:

By the end of this year there will be approximately 2.3bn people connected to the network. Thats a big number, but we are on the cusp of an explosion in that number. Sensors that communicate with purpose built devices are going to be everywhere (think fuel bands and Nests for consumers and for the enterprise think about all the industrial hardware that will be wired up with sensors to monitor use and state of wear).  Additionally, I believe, cities will become machine readable. Imagine if a city simply added to its street signs simple QR codes. Not only would this give added information to citizens but information could be programmatically updated in the case of an emergency like Sandy. Over the coming decade billions of sensors get wired into the network, many of them in our cities. Most of these sensors primary purpose will be commercial yet there will be some level of aggregate data that the city government should have access to aggregate.  Weatherunderground had some useful maps of the tide levels on monday night as Sandy approached but the detail needed on a local level to make informed decisions was missing.

What happened here in NYC was nothing compared to the earthquake in Japan and the nuclear fallout that followed. Yet alot of our technology failed us. Technology needs to be designed as flexible, adaptable to the context that it exists in. Over the coming decade we will see contextual computing upend many of the services that today we take for granted. Building and designing technology with events like Sandy as a consideration are a first step down the path of making computing and the machines we depend on, function regardless and in regard of the context they exist in.

 

betaworks 2012 shareholder letter

Related links:

7 on 7

This weekend (May 14th) 7on7 runs for the second time in NYC – the event brings together artists and technologists – where they conceive and often build a project over the course of a single day.   Some people have referred to it as a YCombinator for the art world, sort of, but last year it was a little more unconventional and irreverent than a YC event.   Slamming an artist together with a technologist can have unexpected consequences.

Last year Matt Mullenweg and Evan Roth hacked WordPress to add in a feature that would create random and unexpected experience at points in the software that he described a lonely or threatening.  Marc Andre Robinson & Hilary Mason created an umbrella with a homing beacon so that you could see patterns of use and rain across a region. Joshua Schachter & Monica Narula devised a concept for a guilt exchange. You can see a video of these three presentation here.   The other four presentations were wonderful – the whole event from 2010 is posted here.

Why 7 on 7?

A handful of reasons: this event and the process that it represents is something I have been fascinated by for a long time.  The first site I created on the web was äda’web, back in 1994. It was a platform for artists and technologists to collaborate and create projects for the web – ones that were medium specific – ie: it wasn’t about putting paintings on the web, rather it was about using the web to create. The site is still up and running courtesy of the Walker Art Center, to whom we (and AOL) donated äda’web to in 1998.   For more about what “äda’web is” see this interview with my co-founder, Benjamin Weil, and / or read this piece he wrote about äda’web as a digital foundry.

Back in the late nineties it struck me that the process that an artist and a technologist apply to their craft is similar.  There is much to write on this subject, rather than diving in here there is a thread we started yesterday on quora titled Do Artists and Technologists create things the same way – it spells out similarities between creating art and creating technology.

7on7 slams technology together with Art.   As such it is a great platform for pranksters.   Pranksters have a vital role in any society — from Jesters, forward they help us gain perspective and see and say things that might otherwise be socially unacceptable.  I met this group earlier this year who setup a system to randomly wardial phone boxes in London — Art or Hack?  I’m not sure, either way, fierce fun.

Last thought. Art and technology are two communities that are well represented here in New York and yet they dont intersect that frequently.   This event was designed to become a bridge between these communities.  As technology becomes more deeply engrained in our lives and society it will become part of what we consider to be art and vica-versa.   See you on saturday, I can promise something will surprise.

7on7, this Saturday, May 14th details here.

note: I’m a board member at Rhizome and member of the motley crew who came up with this idea – others are: Lauren Cornell, Peter Rojas and Fred Benenson.

 

news.me

News.me launched this morning as an iPad app and as an email service. Here is some background on why and how we built News.me:

Why News.me? For a while now at bitly and betaworks, we have been thinking about and working on applications that blend socially curated streams with great immersive reading interfaces.

Specifically we have been exploring and testing ways that the bitly data stack can be used to filter and curate social streams.   The launch of the iPad last April changed everything. Finally there was a device that was both intimate and public — a device that could immerse you into a reading experience that wasn’t bound by the user experience constraints naturally embedded in 30 years of personal computing legacy.  So we built News.me.

News.me is a personalized social news reading application for the Apple iPad. It’s an app that lets you browse, discover and read articles that other people are seeing in their Twitter streams.   These streams are filtered and ranked using algorithms developed by the bitly team to extract a measure of social relevance from the billions of clicks and shares in the bitly data set. This is fundamentally a different kind of social news experience. I haven’t seen or used anything quiet like it before. Rather than me reading what you tweet, I read the stream that you have selected to read — your inbound stream.  It’s almost as if I’m leaning over your shoulder — reading what you read, or looking at your book shelves: it allows me to understand how the people I follow construct their world.

As with many innovations, we stumbled upon this idea.  We started developing News.me last August after we acquired the prototype from The New York Times Company. For the first version we wanted to simply take your Twitter stream, filter it using a bitly-based algorithm (bit-rank) and present it as an iPad app. The goal was to make an easy to browse, beautiful reading experience.  Within weeks we had a first version working.  As we sat around the table reviewing it, we started passing our iPads around saying “let me look at your stream.” And that’s how it really started.  We stumbled into a new way of reading Twitter and consuming news — the reverse follow graph wherein I get to read not only what you share, but what you read as well.  I get to read looking over other people’s shoulders.

 

What Others Are Reading…

On News.me you can read your filtered stream and also those of people you follow on Twitter who use news.me.  When you sign into the iPad app it will give you a list of people you are already following. Additionally, we are launching with a group of recommended streams. This is a selection of people whose “reading lists” are particularly interesting.  From Maria Popova (a.k.a. brainpicker), to Nicholas Kristof and Steven Johnson, from Arianna Huffington to Clay Shirky … if you are curious to see what they are reading, if you want to see the world through their eyes, News.me is for you. Many people curate their Twitter experience to reflect their own unique set of interests.   News.me offers a window into their curated view of the world, filtered for realtime social relevance via the bit-rank algorithm.

 

Streamline Your Reading

The second thing we strove to accomplish was to make News.me into a beautiful and beautifully simple reading experience. Whether you are browsing the stream, snacking on an item (you can pinch open an item in the stream to see a bit more) or you have clicked to read a full article, News.me seeks to offer the best possible reading experience.  All content that is one click from the stream is presented within the News.me application.  You can read, browse and “save for later” all within the app. At any given moment, you can click the browser button to see a particular page on the web. News.me has a simple business model to offer this reading experience.

Today we are launching the iPad News.me application and a companion email product.  The email service offers a daily, personalized digest of relevant content powered by the bit-rank algorithm, and is delivered to your inbox at 6 a.m. EST each morning.   The app. costs $.99 per week, and we in turn pay publishers for the pages you read.  The email product is free.

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Created with flickrSLiDR.

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How was News.me developed? News.me grew out of an innovative relationship between The New York Times Company and bitly.   The Times Company was the first in its industry to create a Research & Development group. As part of its mission, the group develops interesting and innovative prototypes based on trends in consumer media. Last May, Martin Nisenholtz and Michael Zimbalist reached out to me about a product in the Times Company’s R&D lab that they wanted to show us at betaworks.  A few weeks later they showed us the following video, accompanied by an iPad-based prototype. The video was created in January 2010, a few months prior to the launch of the iPad, and it anticipated many of the device’s gestures and uses, in form and function. Here are some screenshots of the prototype.   PastedGraphic 1

On the R&D site there are more screenshots and background.   The Times Company decided it would be best to move this product into bitly and betaworks where it could grow and thrive. We purchased the prototype from the Times Company in exchange for equity in bitly and, as part of the deal, a team of developers from R&D worked at bitly to help bring the product to market.

PastedGraphic 4

 

With Thanks … The first thank you goes to the team. I remember the first few product discussions, the dislocation the Times Company’s team felt having been air lifted overnight from The New York Times Building to our offices in the heart of the Meatpacking District. Throughout the transition they remained focused on one thing: building a great product. Michael, Justin, Ted, Alexis — the original four — thank you.  And thank you to Tracy, who jumped in midstream to join the team.  And thank you the bitly team, without whom the data, the filtering, the bits, the ranking of stories would never be possible.  As the web becomes a connected data platform, bitly and its api are becoming an increasingly important part of that platform. The scale at which bitly is operating today is astounding for what is still a small company, 8bn clicks last month and counting.

I would also like the thank our new partners. We are launching today with over 600 publishers participating. Some of whom you can see listed here, most are not. Thank you to all of them we are excited about building a business with you.

Lastly, I would like to thank The New York Times Company for coming to betaworks and bitly in the first place and for having the audacity to do what most big companies don’t do. I ran a new product development group within a large company and I would like to dispel the simplistic myth that big companies don’t innovate.   There is innovation occurring at many big companies.  The thing that big companies really struggle to do is to ship.   How to launch a new product within the context of an existing brand, an existing economic structure, how to not impute a strategy tax on a new product, an existing organizational structure, etc.   These are the challenges that usually cause the breakdown and where big company innovation, in my experience, so often comes apart. The Times Company did something different here.  New models are required to break this pattern, maybe News.me will help lay the foundation of a new model.   I hope it does and I hope we exceed their confidence in us.

http://on.news.me/app-download

And for more information about the product see http://www.news.me/faq

#Jan25: “Sorry for the inconvenience, but we’re building Egypt.”

Its been a remarkable few months in the middle east.   Most recently the events in Egypt have captured the world and Al Jazeera’s english web site has become the place to watch many of the events unfold.   Given that the channel isnt carried by most US cable companies the web site has been the means to view the channel live over the Internet.

Al Jazeera is also a user of Chartbeat.   Chartbeat offers a real time window into what is happening on a web site right now.   Watching the traffic flows over the past few weeks has been fascinating — in Al Jazeera’s case, the site broke traffic record after record.   I wonder what popluar TV show would compare to having 150,000 to 200,000 simultaneous users on a web site, most of them watching TV?

A lot has been and will be written about the role of social media in this revolution here is some data and perspective from the vantage point of traffic to the Al Jazeera web site yesterday as seen via their Chartbeat dashboard right as Mubarek announced his resignation.

Many thanks to the Al Jazeera team and specifically Mohamed Nanabhay for letting us publish these snapshots.

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Just before noon yesterday, users started flooding into the Al Jazeera web site.

Aj1

The screen shot below shows the traffic sources — links, social and search at noon EST.

Aj2

If you zoom into the article level view you can see that 70%+ of the traffic is coming from social networks.   The picture on the left is the same as the one above — the one on the right zooms into the article level dashboard for the page titled “Hosni Mubarak resigns as President”.

Social71

Mohamed Nanabhay, Head of Online, Al Jazeera’s English web site described the experience:   “As you can imagine our newsrooms and field teams have been on full throttle over the past three weeks. While Al Jazeera very quickly became the worlds window into the revolution in Egypt, Chartbeat proved invaluable as my window into our audience and website. From deploying resources to prioritizing updates, from rolling new features to identifying technical issues on the site, we were able to make better decisions more quickly based on real-time data.”

Interesting snapshots and kind words from people who are monitoring the real time web in ways that could not have been imagined a revolution or two ago.

networked media

This is a different kind of post. I started thinking about “networked media” last August. This began in the same way my longer posts usually do: a slow process of thinking, writing, and editing that spans a few months. But the process took a left turn in October when I decided to speak about networked media at betaday. My work on the blog post ceased and I focused my attention on betaday. What I’m posting here is a compilation of the introduction that I wrote back in August, a video of the betaday talk, and my general notes.

The impact of the “socialization of the web” (i.e. the social components of the web that now pulse through every web page) is a fascinating subject that I think we are only just beginning to understand. Though “socialization” is a politically loaded word, my intent here is not political.   Rather, my use of the word “socialization” is three-fold: I seek to 1.) to show how media is changing as it becomes integrated with social experiences. 2.) to note that the economics of media production is changing and 3.) to emphasize that this shift is a process, not a product.

Social disruption

Over the past few years I have written a fair amount about how the social web will change the way people discover and distribute information online. This started with a post in the spring of 2008 on the Future of News. Then in early ’09 I outlined how “social” would change the discovery process and disrupt traditional search. And then I wrote a long piece about what this shift in discovery means for the user experience on sites. These ideas, and subsequent posts, have informed a lot of what we have built and invested in at betaworks. New modes of navigation and discovery are being developed – from Summize to Tumblr to TweetDeck, and more recently from GroupMe to Ditto. It is now generally accepted that the impact of “social” on discovery and navigation is under way, but I believe the impact goes beyond discovery.

Undoubtedly, search has changed, and continues to change, the way we write, create pages, layout pages, tag and relate to content. It has also encouraged the creation of sites with limited or distracting content that exist solely to optimize search.  Search has not driven a change in the content and user experience once a user is on a page that they value. By contrast, the “social web” is changing the web itself – “social” is altering the nature of what we find. Social experiences are becoming the backbone of many sites. A web page that is part of the “social web” transforms content into a liquid experience, giving rise to a new kind of media: networked media. In the video from betaday, I walk through this shift and show data we have at betaworks that illustrates this change.

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Link to: Networked Media presentation from betaday/10 on Vimeo.

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General Notes re: Networked Media from my September draft:

Starting about four years ago it became clear that the social, real time web could change the way search and discovery happened online.   Fast forward today and that is certainly happened. The impact of this shift in distribution economics isn’t over but the trend has tipped to scale during 2010.   Last year we saw site after site announce the percent of traffic that it is getting from the social web now exceeds or is a second only to search.   In my post on how social will disrupt search two years back I used the example of youtube, and showed the speed at which it had become the second largest search destination on the web.   Twitter, Facebook, tumblr and other vertical social networks are driving meaningful traffic to sites around the web.    Take a collection of sites in the chart below, from news to commerce, from TV based media to sports for many of them social is now the largest driver of traffic.  Nick Denton said last month that referrals to Gawker properties from Facebook had increased sixfold since the start of the year.    And this is different traffic to search traffic.  Its socially referred, its of higher quality and embedded in it is the multiplier effect that the social publishing platforms drive.

NewImage.jpg

The socialization of the page

The question I would like to turn to now is how web pages and applications are been changed by the social, real time web.  Search changed the way we discovered the web.  Web sites optimized their pages for search bots but in most cases they didn’t actually change the content or substance of the page that was presented to the end user.   Put another way, search brought little tangible benefit to the end user beyond discovery.     Search certainly created new forms of sites.   Domain parking, content farmers, link bait, search spawned thousands of sites that managed to game the discovery tool to gain attention, clicks and visits by users who find themselves on site that has the meta data they were looking for but often little of the content.

But unlike search the dynamic of a web page becoming part of the social web is transforming the experience and the content of that page into a liquid experience that is giving rise to a new kind of media.  Humor sites changed because of search.   This was the one exception I found.   Fred Seibert told me last summer about how humor sites changed the content of their pages, placing the punch line up front — because that is what people searched for.

(for the interested, a short primer is here on what we do at betaworks)

Three steps re: how does a page becomes networked?

#1. An Activity window opens up Somewhere between 1-3 hrs after a story is posted a window of social activity opens.   An example, albeit a slightly unusual one: a product page on amazon for a set of speaker wires that cost almost $7,000 — this past weekend this page has all of a sudden taken flight on on Twitter and some of the social blogs.  The page was actually posted to reddit a month ago.  Yet for whatever reason, the insanity of a $7,000 cable didnt mesh with the zeitgeist until November 27th.   On the 27th the page was Tweeted by @PaulandStorm.  And off it went.   Screen shot of the page here.   In the video above you see this process happen in detail. I use Chartbeat to understand the progression and dispersion that occurs in this initial activity window.   Take a look at the dispersion patterns of typical stories on Fred’s AVC blog you can clearly see the window of engagement happen — just take a look at this as Fred puts up a new post one morning.  Look at the uptake starting about 1 hour after the post hits.  Usually the peak occurs at the 100 minute mark. Chartbeat data from 1000’s of large sites around the web suggests that for a blog the peak is usually around 60 mins after posting and for a news site its 130mins.  Its great how open Fred is with this data, lots to learn. These are windows of meaningful, concurrent activity.   Concurrent users is the key metric to track at this point.     Amplification in the social web is what drives the metric.    And amflification happens because of relative influence within your and other social groups.   Link and discuss: It’s Betweenness That Matters, Not Your Eigenvalue: The Dark Matter Of Influence: http://sto.ly/ii40vr

#2. Social clustering occurs With the engagement window open and concurrent users on the page peeking clustering starts to happen.   What separates this from just an open engagement window is the level of engagement.  Users arrive on the site and they start posting comments and the conversation begins.  “Each comment someone takes the time to leave serves as a proxy for 100 or so folks who properly echo that sentiment” (Batelle).    Examples… The importance of the time of day that you publish into the social web.   Timing relative to what your social group is talking about now is what triggers clustering.    This is why socialflow works — it knows when is the right time to send the message that lights up the social web.   Below is an image from some analysis that the NY Times using bit.ly data.   It shows the dispersion of a particular story — in this case a Kristof piece about the Pill — across the social web.   In the image you can see the clustering occurring, this burst over time of influencers and social engagement.

#3. The page becomes Networked Snap a synchronous experience occurs.   Critical mass of users on one page at the same time and something magical happens.   Think about it as a page becoming a live event or a live site. Similar to a concert there is a residue of the social experience when you go back — even if its way after the event.   If you watch the opening of this live concert you will get a visceral experience this looks like and what happens when media becomes connected with the audience.  Its Springsteen’s hungry heart and while he plays the opening of the song he turns it right over the audience to pick it up and sing the opening.       Forking of content.

— Rise of agile publishing: what is it?   Lean editorial teams, instrumentation of sites, getting the data feedback, adaptive CMS’s, importance of posting at the right time up, importance of tracking social engagement, how every page is becoming a front page

— Serendipity.  Some of this is science, some of it isnt.   An “old” page can become networked out of no where — point back to the amazon example.   You don’t know where its going it’s going to happen, you need tools to track and alert you when its happening

— We are moving into an age of networked media.   Dana Boyd’s analysis of the shift from broadcast to networked media

— closing of comments post the activity window – proximity references / boyd article, couple of old ones are in close proximity to this one – Structured data types to allow for debate topics.

Example: Gawker.  gawker is experimenting ,  new design that is both more dynamic (real time) and more immersive, without the restrictions of reverse chronological.    Users are no longer navigating from page to page across isolated sites. Rather they are experiencing the subset of sites as a liquid experience, where there is a consistent flow from site to site and the consistent aspect is social.   Users flow — ambient experience of media.

Example:  Dribble and iTunes icon, this became a networked media event.

Example: Yahoo bloggers adapt content to the refers and links to the spiker

Example: “the quality of the dynamics of the conversation shift from one where parlor tricks can sustain themselves beyond the quality of the content to one where we can get sort of immediate tactile connection with people” (source: 4.18.09 Gillmor Gang 1.01 min).

Example: Red State :  Twitter 140 charac wish they could aggregate topics need standardized metrics re social engagement

Points of tension to discuss and think about further?

– Advertising as the primary mode monetization and pulling people in vs. pulling them away.

– Tension between platform owners who monetize w/ advertising on their site, trying to intergrate web sites into their monetization flow

– The monolithic assumption that one social platform will rule all.   How vertical use cases of social (from tumblr to Foursquare to Groupme to Instagram) illustrate how social is fragmenting into specific workflows and uses.  Do “digital networks architectures naturally incubate monopolies” Lanier?

– How are the economics of social media are effecting networked media.  Ownership of data, ownership of content, if users are creating the content what rights do they have over it?

– Importance of the link structure of the web its the most fluid form resist the temptation to vertically integrate and “consumption” sites.

– dimensionality reduction too much data

– Importance of the link structure of the web its the most fluid form resist the temptation to vertically intergrate and “consume” sites

– Heisenberg principle of social media, the act of a page becoming social changes it

My reading collection on networked media: http://bit.ly/bundles/johnb/u




a live blog

There was a discussion on the Gillmor Gang last Friday that I wanted to flesh out a bit.   The topic was the sale of TechCrunch to AOL.   Much of the talk on the web and some of it on the Gang centered on TechCrunch as a media property.    Are “content” acquisitions on the rise?  What does this mean for content sites?   How do old media, other content companies relate to this? etc. etc. etc.     I dont think these question are that interesting.   All media is internet media today — if the so called “content” provider doesn’t place them on the net they get there regardless.   It’s no longer the presence of content online that makes it interesting — its type of engagement that occurs that is is interesting.   TechCrunch is in my mind becoming a place — a real time, or live, conversational platform.

If you look at TechCrunch articles the number of comments that stream into the page within the first hour after an article is posted is meaningful.    It’s these real time interactions, the conversations that are happening on the page, the connections that are taking place real time or close to real time — that make TechCrunch such an interesting place.    Yes, a place not a site.  TechCrunch or the Huffington Post (the other example I mentioned on the show) are becoming conversational places or platforms where the content provides context to the conversation and visa versa.  A while ago I had a conversation with Bob Stein we were talking about writing, publishing and blogging.   Bob told me about a test he had run at the Institute for the futureofthebook.  In the test they placed comments on a blog to the right of the posts / articles.  The result was meaningfully more interesting discourse.  The comments werent placed at the bottom, hidden away, like a letter to the editor, they were part of the body of the post.    Think about it this way.  If you took TechCrunch and placed the comments to the right of the posts and let them stream live (most recent first) wouldnt it look like a mirror image of the new Twitter?   Stream on the right — media on the left — Twitter is stream on the left, media on the right.     Interesting.

TechCrunch is in my mind a conversational platform and its that + the personalities of the  team that what make it interesting.    And the “that” bit, is the real time participation of the users – that provide for a degree of authenticity and connection.   I think when Steve Gillmor was talking about Neil Young on the show it was this type of connection he was talking about.  Arrington in his post “Why We Sold TechCrunch To AOL, And Where We Go From Here” says “I don’t want to get all teary-eyed here, but the best comment I ever saw on TechCrunch was years ago in response to when I quipped something like “This is my blog and I’ll write what I want” in response to a troll. The response was “No Mike, This is OUR blog. You just work here.””     When @Auerbach pointed that comment out to me this week this thread of thoughts came together.   That is whats different here, the active, passionate users who are participating in the conversation, live — maybe we should call the category live blogs.    Place like these are emerging, most of them are in news, politics, tech or gossip but other vertical categories are starting to appear.  In a sense I see these sites as children of the old bbs’s.   And its happening the way things happen on the web — its somewhat chaordic, its messy, there is a pull from the centralized services that have the advantage of a tightly coupled integration and a more gradual, but eventually greater pull from the edge.

If this all sounds fairly general, I do have some data to back up the thesis.   I’m going to talk about this data generally since its not my data to publish in detail.   Via Chartbeat (a company we built at betaworks) we see engagement on a variety of sites, in real time.   The focus of Chartbeat is on how many people are on your site, right now and what are they doing.   Looking at the real time engagement dashboard on Chartbeat accross a set of customers, say: TechCrunch, WSJ, Gawker, Yahoo News, ChatRoulette and FoxNews we see very different patterns of engagement.

The pace at which TechCrunch is published, the degree of engagement, the real time updating of comments, the requirement of the blog to post with your real name, the direct engagement from the authors … all of this contributes to a what is much more of live experience than most blogs.    There is a public example of data around a live blog that I can point to, that’s AVC.com, @FredWilson has made his dashboard for Chartbeat open.    Take a look at it the engagement view as he publishes.   Again note the pace and consistency that Fred blogs and the relationship he has to his audience.  Or look at what Chamillonaire is doing … live is becoming live in a whole new way, participatory media is becoming more diverse and interesting.    And for AOL this is in a sense, a return to its roots of community and conversation.  There is potential in this deal, potential for TechCrunch & AOL and the team to turn more of the web into more of a conversation — the vision of AOL as a next generation content platform might start to emerge out of this.

Ongoing tracking of the real time web …

The last post that I did about real time web data mixed data with a commentary and a fake headline about how data is sometimes misunderstood in regards to the real time web.    This post repeats some of that data but the focus of the post is the data.   I will update the post periodically with relevant data that we see at betaworks or that others share with us.   To that end this post is done in reverse order with the newest data on top.

Tracking the real time web data

The measurement tools we have still only sometimes work for counting traffic to web pages and they certainly dont track or measure traffic in streams let alone aggregate up the underlying ecosystems that are emerging around these new markets.  At betaworks we spend a lot of time looking at and tracking this underlying data set.   It’s our business and its fascinating.   Like many companies each of the individual businesses at betaworks have fragments of data sets but because betaworks acts as ecosystem of companies we can mix and match the data to get results that are more interesting and hopefully offer greater insight

——————————-

(i) tumblr growth for the last half of 2009

Another data point re: growth of the real time web through the second half of last year through to Jan 18th of this year.  tumblr continues to kill it.     I read this interesting post yesterday about how tumblr is leading in its  category through innovation and simple, effective, product design.   The compete numbers quoted in that post are less impressive than these directly measured quantcast numbers.


(h) Twitter vs. the Twitter Ecosystem

Fred Wilson’s post adds some solid directional data on the question of the size of the ecosystem.   “You can talk about Twitter.com and then you can talk about the Twitter ecosystem. One is a web site. The other is a fundamental part of the Internet infrastructure. And the latter is 3-5x bigger than the former and that delta is likely to grow even larger.”

(g) Some early 2010 data points re: the Real Time Web

  • Twitter: Jan 11th was the highest usage day ever (source: @ev via techcrunch)
  • Tweetdeck: did 4,143,687 updates on Jan 8, yep 4m. Or, 48 per second (source: Iain Dodsworth / tweetdeck internal data)
  • Foursquare: Jan 9th biggest day ever.    1 update or check-in per second (source: twitter and techcrunch)
  • Daily Booth: in past 30 days more than 10mm uniques (source: dailybooth internal data)
  • bit.ly: last week was the largest week ever for clicks on bit.ly links. 564m were clicked on in total. On the Jan 6th there were a record of 98m decodes.    1100 clicks every second.

(f) Comparing the real time web vs. Google for the second half of 2009

Andrew Parker commented on the last post that the chart displaying the growth trends was hard to decipher and that it maybe simpler to show month over month trending.  It turns out the that month over month is also hard to decipher.   What is easier to read is this summary chart.    It shows the average month over month growth rates for the RT web sites (the average from Chart A).   Note 27.33% is the average growth rate for the real time web companies in 2009 — that’s astounding.    The comparable number for the second half of 2009 was 10.5% a month — significantly lower but still a very big number for m/m growth.

(e) Ongoing growth of the real time stream in the second half of 2009

This is a question people have asked me repeatedly in the past few weeks.  Did the real time stream grow in Q4 2009?    It did.    Not at the pace that it grew during q1-q3, but our data at betaworks confirms continued growth.   One of the best proxies we use for directional trending in the real time web are the bit.ly decodes.   This is the raw number of bit.ly links that are clicked on across the web.    Many of these clicks occur within the Twitter ecosystem, but a large number are outside of Twitter, by people and by machines — there is a surprising amount of diversity within the real time stream as I posted about a while back.

Two charts are displayed below.    On the bottom are bit.ly decodes (blue) and encodes (red)  running through the second half of last year.    On the top is a different but related metric.   Another betaworks company is Twitterfeed.    Twitterfeed is the leading platform enabling publishers to post from their sites into Twitter and Facebook.    This chart graphs the total number of feeds processed (blue) and the total number of publishers using Twitterfeed, again through the second half of the year (note if the charts inline are too small to read you can click though and see full size versions).   As you can see similar the left hand chart — at Twitterfeed the growth was strong for the entire second half of 2009.

Both these charts illustrate the ongoing shift that is taking place in terms of how people use the real time web for navigation, search and discovery.    My preference is to look at real user interactions as strong indicators of user behavior.   For example I actually find Google trends more useful often than comScore, Compete or the other “page” based measurement services.   As interactions online shift to streams we are going to have to figure out how measurement works. I feel like today we are back to the early days of the web when people talked about “hits” — it’s hard to parse the relevant data from the noise.  The indicators we see suggest that the speed at which this shift to the real time web is taking place is astounding.   Yet it is happening in a fashion that I have seen a couple of times before.

(d) An illustration of the step nature of social growth. bit.ly weekly decodes for the second half of 2009.

Most social networks I have worked with have grown in a step function manner.  You see this clearly when you zoom into the bit.ly data set and look at weekly decodes, illustrated above.   You often have to zoom in and out of the data set to see and find the steps but they are usually there.     Sometimes they run for months — either up or sideways.    You can see the steps in Facebook growth in 2009.    I saw effect up close with ICQ, AIM, Fotolog, Summize and now with bit.ly.   Someone smarter than me has surely figured out why these steps occur.    My hypothesis is that as social networks grow they jump in a sporadic fashion from one dense cluster of relationships to a new one.   The upward trajectory is the adoption cycle of that new, dense cluster and the flat part of the step is the period between the step to next cluster.     Blended in here there are clearly issues of engagement vs. trial.   But it’s hard to weed those out from this data set.   As someone mentioned to me in regards to the last post this is a property of scale-free networks.

(c) Google and Amazon in 2009

Google and Amazon — this is what it looked like in 2009:

It’s basically flat.     Pretty much every user in the domestic US is on Google for search and navigation and on Amazon for commerce — impressive baseline numbers but flat for the year (source: Quantcast).  So then lets turn to Twitter.

(b) Twitter – an estimate of Twitter.com and the Twitter ecosystem

Much ink has been spilt over Twitter.com’s growth in the second half of the year.   During the first half of the year Twitter’s experience hyper growth — and unprecedented media attention.    In the second half of the year the media waned, the service went through what I suspect was a digestion phase — that step again?     Steps aside — because I dont in anyway seek to represent Twitter Inc. — there are two questions that in my mind haven’t been answered fully:

(i) what international growth in the second half of 2009?, that was clearly a driver for Facebook in ’09.  Recent data suggests growth continued to be strong.

(ii) what about the ecosystem.

Unsurprisingly its the second question that interests me the most.    So what about that ecosystem?    We know that approx 50% of the interactions with the Twitter API occur outside of Twitter.com but many of those aren’t end user interactions.     We also know that as people adopt and build a following on Twitter they often move up to use one of the client or vertical specifics applications to suit their “power” needs.   At TweetDeck we did a survey of our users this past summer.     The data we got suggested 92% of them then use Tweetdeck everyday — 51% use Twitter more frequently since they started using TweetDeck.  So we know there is a very engaged audience on the clients.     We also know that most of the clients arent web pages — they are flash, AIR, coco, iPhone app’s etc. all things that the traditional measurement companies dont track.

What I did to estimate the relative growth of the Twitter ecosystem is the following.   I used Google Trends and compiled data for Twitter and the key clients.    I then scaled that chart over the Twitter.com traffic.   Is it correct? — no.   Is it made up? — no.   It’s a proxy and this is what it looks like (again, you can click the chart to see a larger version).

Similar to the Twitter.com traffic you see the flattening out of the ecosystem in the summer.    But you see growth in the forth quarter that returns to the summer time levels.     I suspect if you could zoom in and out of this the way I did above you would see those steps again.

(a) The Real Time Web in 2009

Add in Facebook (blue) and Meebo (green) both steaming ahead — Meebo had a very strong end of year.    And then tile on top the bit.ly data and the Twitterfeed numbers (bit.ly on the right hand scale) and you have an overall picture of growth of the real time web vs. Google and Amazon.   As t

lines in the sand …

screenshotI had the good fortune of receiving an advance copy of Ken Auletta’s forthcoming book “Googled, The End of the World as We Know It“. It’s a fascinating read, one that raises a whole set of interesting dichotomies related to Google and their business practices. Contrast the fact that the Google business drives open and free access to data and intellectual property, so that the world becomes part of their corpus of data – yet they tightly guard their own IP in regards to how to navigate that data. Contrast that users and publishers who gave Google the insights to filter and search data are the ones who are then taxed to access that data set. Contrast Google’s move into layers beyond web sites (e.g., operating systems, web browsers) with their apparent belief that they won’t have issues stemming from walled gardens and tying. In Google we have a company that believes “Don’t be evil” is sufficient a promise for their users to trust their intentions, yet it is a company that have never articulated what they think is evil and what is not (Google.cn, anyone?).

There is a lot to think about in Auletta’s book – it’s a great read. When I began reading, I hoped for a prescriptive approach, a message about what Google should do, but instead Auletta provides the corporate history and identifies the challenging issues but leaves it to the reader to form a position on where they lead.  In my case, the issue that it got me thinking most about was antitrust.

My bet is that in the coming few years Google is going to get hauled into an antitrust episode similar to what Microsoft went through a decade ago. Google’s business has grown to dominate navigation of the Internet. Matched with their incredibly powerful and distributed monetization engine, this power over navigation is going to run headlong into a regulator. I don’t know where (US or elsewhere) or when, but my bet is that it will happen sooner rather than later. And once it does happen, the antitrust process will again raise the thorny issue of whether regulation of some form is an effective tool in the fast-moving technology sector.

UsersjohnborthwickPicturesiPhoto-LibraryOriginals2008IMG_0859.jpg

I was a witness against Microsoft in the remedy phase of its antitrust trial, and I still think a lot about whether to technology regulation works. I now believe the core position I advocated in the Microsoft trial was wrong. I don’t think government has a role in participating in technology design and I believe the past ten years have adequately illustrated that the pace of innovation and change will outrun any one company’s ability to monopolize a market. There’s no question in my mind that Microsoft still has a de facto monopoly on the market for operating systems.  There’s also no question that the US and EU regulatory environment have constrained the company’s actions, mostly for the better. But the primary challenges for Microsoft have been from Google and, to a lesser extent, from Apple. Microsoft feels the heat today, but it is coming from Silicon Valley, not Brussels or Washington, and it would be feeling this heat no matter what had happened in the regulatory sphere. The EU’s decisions to unbundle parts of Windows did little good for RealNetworks or Netscape (which had been harmed by the bundling in the first place), and my guess is that Adobe’s Flash/ AIR and Mozilla’s Firefox would be thriving even if the EU had taken no action at all.

But if government isn’t effective at forward-looking technology regulation, what alternatives do we have? We can restrict regulation to instances where there is discernible harm (approach: compensate for past wrongs, don’t design for future ones) or stay out and let the market evolve (approach: accept the voracious appetite of these platforms because they’re temporary). But is there another path? What about a corporate statement of intent like Google’s “Don’t be evil”?

“Don’t be evil” resonated with me because it suggested that Google as a company would respect its users first and foremost and that its management would set boundaries on the naturally voracious appetite of its successful businesses.

In the famous cover letter in Google’s registration statement with the SEC before its IPO, its founders said: “Our goal is to develop services that significantly improve the lives of as many people as possible. In pursuing this goal, we may do things that we believe have a positive impact on the world, even if the near term financial returns are not obvious.” The statement suggests that there are a set of things that Google would not do. Yet as Auletta outlines, “don’t be evil” lacks forward looking intent, and most important it doesn’t outline what good might mean.

Nudge please …

Is there a third way — an alternative that places the company builders in a more active position? After almost two decades of development I believe many of the properties of the Internet have been documented and discussed, so why not distill these and use them as guideposts? I love reading and rereading works like the Stupid Network, or the Cluetrain Manifesto or the Cathedral and the Bazaar, or (something seasonal!) the Halloween Memo‘s. In these works, and others, there is mindset, an ethos or culture that is philosophically consistent with the medium. When I first heard “Don’t be evil” my assumption was that it, and by definition good, referred to that very ethos. What if we can unpack these principles, so that builders of the things that make up these internets can make explicit their intent and begin to establish a compact vs. a loose general statement of “goodness” that is subject to the constraint that “good” can be relative to the appetite of the platform? Regulation in a world of connected data, where the network effect of one platform helps form another, has much broader potential for unintended consequences. How we address these questions is going to affect the pace and direction of technology based innovation in our society. If forward looking regulation isn’t the answer, can companies themselves draw some lines in the sand, unpack what “don’t be evil” suggested, and nudge the market towards an architecture in which users, companies, and other participants in the open internet signal the terms or expectations they have.

Below is a draft list of principles. It is incomplete, I’m sure — I’m hoping others will help complete it — but after reading Auletta’s book and after thinking about this for a while I thought it would be worth laying out some thoughts in advance of another regulatory mess.

1. Think users 

When you start to build something online the first thing you think about are users. You may well think about yourself — user #1 — and use your own workflow to intuit what others might find useful, but you start with users and I think you should end with the users. This is less of a principle and more of a rule of thumb, and a foundation for the other principles. It’s something I try to remind myself of constantly. In my experience with big and small companies this rule of thumb seems to hold constant. If the person who is running the shop you are working for doesn’t think about end users and / or doesn’t use your product, it’s time to move on. As Eric Raymond says you should treate your users as co-developers.  Google is a highly user centric company for one of its scale, they stated this in the pre-ample to the IPO/s3 and they have managed to stay relatively user centric with few exceptions (Google.cn likely the most obvious, maybe the Book deal).   Other companies — ie: Apple, Facebook — are less user centric.   Working on the Internet is like social anthropology, you learn by participant observation — the practice of doing and building is how you learn.   In making decisions about services like Google Voice, Beacon etc. users interest need to be where we start and where we end.

2. Respect the layers

In 2004 Richard Whitt, then at MCI, framed the argument for using the layer model to define communication policy. I find this very useful: it is consistent with the architecture of the internet, it articulates a clear separation of content from conduit, and it has the added benefit of been a useful visual representation of something that can be fairly abstract. Whitt’s key principle is that companies should respect the distinction between these layers. Whitt captures in a simple framework what is wrong with the cable companies or the cell carriers wanting to mediate or differentially price bits. It also helps to frame the potential problems that Side Wiki, or the iPhone or Google Voice, or Chrome presents (I’m struck by the irony that “respecting the layers” in the case of a browser translates into no features from the browser provider will be embedded into the chrome of the browser, calling the browser Chrome is suggestive of exactly what I dont want, ie Google specific Chrome!).   All these products have the potential to violate the integrity of the layers, by blending the content and the applications layers. It would be convenient and simple to move on at this point, but its not that easy.

There are real user benefits to tight coupling (and the blurring of layers) in particular during the early stages of a product’s development. There were many standalone MP3 players on the market before the iPod. Yet it was the coupling of the iPod to iTunes and the set of business agreements that Apple embedded into iTunes that made that market take off (note that occurred eighteen months after the launch of the iPod). Same for the Kindle — coupling the device to Amazon’s store and to the wireless “Whispernet” service is what distinguishes it from countless other (mostly inferior) ebooks. But roll the movie forward: its now six and a half years after the launch of the coupled iTunes/iPod system. The device has evolved into a connected device that is coupled both to iTunes and AT&T and the store has evolved way beyond music. Somewhere in that evolution Apple started to trip over the layers. The lines between the layers became blurred and so did the lines between vendors, agents and users. Maybe it started with the DRM issue in iTunes, or maybe the network coupling which in turn resulted in the Google Voice issue. I’m not sure when it happened but it has happened and unless something changes its going to be more of problem, not less. Users, developers and companies need to demand clarity around the layers, and transparency into the business terms that bound the layers. As iTunes scales — to become what it is in essence a media browser — I believe the pressure to clarify these layers will increase.    An example of where the layers have blurred without the feature creep /conflict is the search box in say the Firefox browser.    Google is default, there is a transparent economic agreement that places them there and users can adjust and pick another default if they wish.    One of the unique attributes of the internet is that the platform on which we build things is the very same as the one we use to “consume” those things (remember the thrill of “view source” in the browser). Given this recursive aspect of the medium, it is especially important to respect the layers.   Things built on the Internet can them selves redefine the layers.

3. Transparency of business terms

When platform like Google, iTunes, Facebook, or Twitter gets to scale it rapidly forms a basis on which third parties can build businesses. Clarity around the business terms for inclusion in the platform and what drives promotion and monetization within the platform is vital to the long term sustainability of the underlying platform. It also reduces the cost of inclusion by standardizing the business interface into the platform. Adsense is a remarkable platform for monetization. The Google team did a masterful job of scaling a self service (read standardized) interface into their monetization system. The benefits of this have been written about at length yet aspects of the platform like “smart pricing” arent’t transparent.   See this blog post from Google about smart pricing and some of the comments in the thread.   They include: “My eCPM has tanked over the last few weeks and my earnings have dropped by more then half, yet my traffic is still steady. I’m lead to believe that I have been smart priced but with no information to tell me where or when”

Back in 2007 I ran a company called Fotolog. The majority of the monetization at Fotolog was via Google. One day our Google revenues fell by half. Our traffic hadn’t fallen and up to that point our Google revenue had been pretty stable. Something was definitely wrong, but we couldnt figure out what. We contacted our account rep at Google, who told us that there was a mistake on our revenue dashboard. After four days of revenues running at the same depressed level we were told we had been “smart priced”.   Google would not offer us visibility in how this is measured and what is the competitive cluster against which you are being tested. That opacity made it very hard for Fotolog to know what to do. If you get smart priced you can end up having to re-organize your entire base of inventory all while groping to understand what is happening in the black box of Google. Google points out they don’t directly benefit from many of these changes in pricing (the advertisers do pay less per click), but Google does benefit from the increased liquidity in the market. As with Windows, there is little transparency in regards to the pricing within the platform and the economics.    This in turn leaves a meaningful constituent on the sideline, unsatisfied or unclear about the terms of their business relationship with the platform. I would argue that smart pricing and a lack of transparency into how their monetization platform can be applied to social media is driving advertisers to services like Facebook’s new advertising platform.

Back to Apple.   iTunes is as I outlined about a media browser — we think about it as an application because we can only access Apple stuff through it, a simple, yet profound design decision.   Apple created this amazing experience that arguably worked because it was tightly coupled end to end, i.e, the experience stretched from the media through the software to the device. Then when the device became a phone, the coupling extended to the network (here in the US, AT&T). I remember two years ago I almost bricked my iPhone — Apple reset my iPhone to its birthstate — because I had enabled installing applications that weren’t “blessed” by Apple. My first thought was, “isn’t this my phone? what right does Apple have to control what I do with it, didn’t I buy it?” A couple of months ago, Apple blocked Google Voice’s iPhone application; two weeks ago Apple rejected someecards’ application into the app store while permitting access to a porn application (both were designated +17; one was satire, the other wasn’t). The issue here isn’t monopoly control, per se — Apple certainly does not have a monopoly on cell phones, nor AT&T on cell phone networks. The trouble is that there is little to no transparency into *why* these applications weren’t admitted into the app store. (someecards’ application did eventually make it over the bar; you can find it here.) Will Google Voice get accepted? Will Spotify?, Rdio? someecards?     As with the Microsoft of yesteryear (which, among other ills, forbade disclosure of its relationships with PC makers), there is an opaqueness to the business principles that underlie the iTunes app store. This is a design decision that Apple has made and one that, so far anyway, users and developers have accepted. And, in my opinion, it is flawed.    Ditto for Facebook. This past week, the terms for application developers were modified once again. A lot of creativity, effort, and money has been invested in Facebook applications — the platform needs a degree of stability and transparency for developers and users.

4. Data in, data out?

API’s are a corner stone to the emerging mesh of services that sit on top of and around platforms. The data flows from service providers should, where possible, be two way. Services that consume an API should publish one of their own. The data ownership issues among these services is going to become increasingly complex. I believe that users have the primary rights to their data and the applications that users select have a proxy right, as do other users who annotate and comment on the data set. If you accept that as a reasonable proposition, then it follows that service providers should have an obligation to let users export that data and also let other services providers “plug into” that data stream. The compact I outline above is meaningfully different to what some platforms offer today. Facebook asserts ownership rights over the data you place in its domain; in most cases the data is not exportable by the user or another service provider (e.g., I cannot export my Facebook pictures to Flickr, nor wire up my feed of pictures from Facebook to Twitter). Furthermore if I leave Facebook they still assert  rights to my images.   I know this is technically the easiest answer. Having to delete pictures that are now embedded in other people’s feed is a complex user experience but I think that’s what we should expect of these platforms. The problem is far simplier if you just link to things and then promote standards for interconnections. These standards exist today in the form of RSS, or Activity Streams — pick your flavor and let users move data from site to site and let users store and save their data.

5. Do what you do best, link to the rest

Jeff Jarvis’s moto for newsrooms applies to service providers as well. I believe the next stage of the web is going to be characterized by a set of loosely coupled services — services that share data — offering end users the ability to either opt for an end-to-end solution or the possibility of rolling their own in a specific domain where they have depth of interest, knowledge, data. The first step in this process is that real identity is becoming public and separable from the underlying platform (vs. private in, say The Facebook, or alias based in most earlier social networks). In the case of services like Facebook Connect and Twitter OAuth this not only simplifies the user experience but identity also pre-populates a social graph into the service in question. OAuth flows identity into a user’s web experience, vs. the disjointed efforts of the past. This is the starting point. We are now moving beyond identity into a whole set of services stitched together, by users. Companies of yesteryear, as they grew in scale, started to co-opt vertical services of the web into their domain (remember when AOL put a browser inside of its client, with the intention of “super-setting” the web). This was an extreme case — but it is not all that different from Facebook’s “integration” of email, providing a messaging system with no imap access, one sends me an email to my imap “email” account to tell me to check that I have a Facebook “email”.   This approach wont scale for users.  Kevin Marks, Marc Cantor, Jerry Michalski are some of the people who have been talking for years about an open stack.    In the later half of this presentation Kevin outlines the emerging stack.    I believe users will opt — over time — for best in class services vs. the walled garden roll it once approach.

 
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6. Widen the my experience – don't narrow it

Google search increasingly serves to narrow my experience on the web, rather than expand it. This is driven by a combination of pressure inherent in their business model to push page views within their domain vs. outside (think Yahoo Finance, Google Onebox etc.) and the evolution of an increasingly personalised search experience which in turn tends to feed back to me and amplify my existing biases — serving to narrow my perspective vs. broaden it. Auletta talked about this at the end of his book. He quotes Nick Carr: “They (Google) impose homogeneity on the Internet’s wild heterogeneity. As the tools and algorithms become more sophisticated and our online profiles more refined, the Internet will act increasingly as an incredibly sensitive feedback loop, constantly playing back to us, in amplified form, our existing preferences” Features like social search will only exacerbate this problem. This point is the more subtle side of the point above. I wrote a post a year or two ago about thinking of centres vs. wholes and networks vs. destinations. As the web of pages becomes a web of flow and streams the experience of the web is going widen again. You can see this in the data — the charts in distribution now post illustrate the shift that is taking place.   As the visible — user facing — part of a web site becomes less important than the API’s and the myriad of ways that users access the underlying data, the web, and our experience of it, will widen, again.

Conclusions

I have outlined six broad principles that I believe can be applied as a design methodology for companies building services online today. They are inspired by others, a list of whom would be very long,  I’m not going to attempt to document it, I will surely miss someone.   Building companies on today’s internet is by definition an exercise in standing on the shoulders of giants. Internet standards from TCP/IP onward are the strong foundation of an architecture of participation. As users pick and choose which services they want to stitch together into their cloud, can companies build services based on these shared data sets in a manner that is consistent with the expectations we hold for the medium? The web has a grain to it and after 15 years of innovation we can begin to observe the outlines of that grain. We may not be able to always describe exactly what it is that makes something “web consistent” but we do know it when we see it.

The Microsoft antitrust trial is a case study in regulators acting as design architects. It didn’t work. Google’s “don’t be evil” mantra represents an alternative approach, one that is admirable in principle but lacking in specificity. I outline a third way here, one in which we as company creators coalesce around a set of principles saying what we aspire to do and not do, principles that will be visible in our words and our deeds. We can then nudge our own markets forward instead of the “helping hand” of government.

buriedtreasure

Distribution … now

In February 1948, Communist leader Klement Gottwald stepped out on the balcony of a Baroque palace in Prague to address hundreds of thousands of his fellow citizens packed into Old Town Square. It was a crucial moment in Czech history – a fateful moment of the kind that occurs once or twice in a millennium.

Gottwald was flanked by his comrades, with Clementis standing next to him. There were snow flurries, it was cold, and Gottwald was bareheaded. The solicitous Clementis took off his own fur cap and set it on Gottwald’s head.

The Party propaganda section put out hundreds of thousands of copies of a photograph of that balcony with Gottwald, a fur cap on his head and comrades at his side, speaking to the nation. On that balcony the history of Communist Czechoslovakia was born. Every child knew the photograph from posters, schoolbooks, and museums.

Four years later Clementis was charged with treason and hanged. The propaganda section immediately airbrushed him out of history, and obviously, out of all the photographs as well. Ever since, Gottwald has stood on that balcony alone. Where Clementis once stood, there is only bare palace wall. All that remains of Clementis is the cap on Gottwald’s head.

Book of Laughter and Forgetting, Milan Kundera

The rise of social distribution networks

Over the past year there has been a rapid shift in social distribution online.    I believe this evolution represents an important change in how people find and use things online. At betaworks I am seeing some of our companies get 15-20% of daily traffic via social distribution — and the percentage is growing.    This post outlines some of the aspects of this shift that I think are most interesting.   The post itself is somewhat of a collage of media and thinking.

Distribution is one of the oldest parts of the media business.    Content is assumed to be king so long as you control the distribution flow to that content. From newspapers to NewsCorp companies have understand this model well.   Yet this model has never suited the Internet very well.     From the closed network ISP’s to Netcenter.   Pathfinder to Active desktop, Excite Lycos, Pointcast to the Network computer.   From attempts to differentially price bits to preset bookmarks on your browser — these are all attempts at gate keeping attention and navigation online.    Yet the relative flatness of the internet and its hyperlinked structure has offered people the ability to route around these toll gates.   Rather than client software or access the nexus of distribution became search.    Today there seems to be a new distribution model that is emerging.   One that is based on people’s ability to publically syndicate and distribute messages — aka content — in an open manner.    This has been a part of the internet since day one — yet now its emerging in a different form — its not pages, its streams, its social and so its syndication.    The tools serve to produce, consume, amplify and filter the stream.     In the spirit of this new wave of Now Media here is a collage of data about this shift.

Dimensions of the now web and how is it different?

Start with this constant, real time, flowing stream of data getting published, republished, annotated and co-opt’d across a myriad of sites and tools.    The social component is complex — consider where its happening.    The facile view is to say its Twitter, Facebook, Tumblr or FriendFeed — pick your favorite service.    But its much more than that because all these sites are, to varying degrees, becoming open and distributed. Its blogs, media storage sites (ie: twitpic) comment boards or moderation tools (ie: disqus) — a whole site can emerge around an issue — become relevant for week and then resubmerge into the morass of the data stream, even publishers are jumping in, only this week the Times pushed out the Times Wire.    The now web — or real time web — is still very much under construction but we are back in the dark room trying to understand the dimensions and contours of something new, or even to how to map and outline its borders. Its exciting stuff.

Think streams …

First and foremost what emerges out of this is a new metaphor — think streams vs. pages.     This seems like an abstract difference but I think its very important.    Metaphors help us shape and structure our perspective, they serve as a foundation for how we map and what patterns we observe in the world.     In the initial design of the web reading and writing (editing) were given equal consideration – yet for fifteen years the primary metaphor of the web has been pages and reading.     The metaphors we used to circumscribe this possibility set were mostly drawn from books and architecture (pages, browser, sites etc.).    Most of these metaphors were static and one way.     The steam metaphor is fundamentally different.  Its dynamic, it doesnt live very well within a page and still very much evolving.    Figuring out where the stream metaphor came from is hard — my sense is that it emerged out of RSS.    RSS introduced us to the concept of the web data as a stream — RSS itself became part of the delivery infrastructure but the metaphor it introduced us to is becoming an important part of our eveyday day lives.

A stream.   A real time, flowing, dynamic stream of  information — that we as users and participants can dip in and out of and whether we participate in them or simply observe we are are a part of this flow.     Stowe Boyd talks about this as the web as flow: “the first glimmers of a web that isnt about pages and browsers” (see this video interview,  view section 6 –> 7.50 mins in).       This world of flow, of streams, contains a very different possibility set to the world of pages.   Among other things it changes how we perceive needs.  Overload isnt a problem anymore since we have no choice but to acknowledge that we cant wade through all this information.   This isnt an inbox we have to empty,  or a page we have to get to the bottom of — its a flow of data that we can dip into at will but we cant attempt to gain an all encompassing view of it.     Dave Winer put it this way in a conversation over lunch about a year ago.    He said “think about Twitter as a rope of information — at the outset you assume you can hold on to the rope.  That you can read all the posts, handle all the replies and use Twitter as a communications tool, similar to IM — then at some point, as the number of people you follow and follow you rises — your hands begin to burn. You realize you cant hold the rope you need to just let go and observe the rope”.      Over at Facebook Zuckerberg started by framing the flow of user data as a news feed — a direct reference to RSS — but more recently he shifted to talk about it as a stream: “… a continuous stream of information that delivers a deeper understanding for everyone participating in it. As this happens, people will no longer come to Facebook to consume a particular piece or type of content, but to consume and participate in the stream itself.”    I have to finish up this section on the stream metaphor with a quote from Steve Gillmor.    He is talking about a new version of Friendfeed, but more generally he is talking about real time streams.     The content and the language — this stuff is stirring souls.

We’re seeing a new Beatles emerging in this new morning of creativity, a series of devices and software constructs that empower us with both the personal meaning of our lives and the intuitive combinations of serendipity and found material and the sturdiness that only rigorous practice brings. The ideas and sculpture, the rendering of this supple brine, we’ll stand in awe of it as it is polished to a sparkling sheen. (full article here)

Now, Now, Now

The real time aspect of these streams is essential.  At betaworks we are big believers in real time as a disruptive force — it’s an important aspect of many of our companies — it’s why we invested a lot of money into making bit.ly real time.  I remember when Jack Dorsey first saw bit.ly’s  plus or info page (the page you get to by putting a “+” at the end of any bit.ly URL) —  he said this is “great but it updates on 30 min cycles, you need to make it real time”.   This was August of ’08 — I registered the thought, but also thought he was nuts.    Here we sit in the spring of ’09 and we invested months in making bit.ly real time —  it works, and it matters.   Jack was right — its what people want to see the effects on how a meme is are spreading — real time.   It makes sense — watching a 30 min delay on a stream — is somewhere between weird and useless.   You can see an example of the real time bit.ly traffic flow to an URL  here. Another betaworks company, Someecards, is getting 20% of daily traffic from Twitter.   One of the founders Brook Lundy said the following “real time is now vital to what do.    Take the swine flu — within minutes of the news that a pandemic level 5 had been declared — we had an ecard out on Twitter”.    Sardonic, ironic, edgy ecards — who would have thought they would go real time.    Instead of me waxing on about real time let me pass the baton over to Om — he summarizes the shift as well as one could:

  1. “The web is transitioning from mere interactivity to a more dynamic, real-time web where read-write functions are heading towards balanced synchronicity. The real-time web, as I have argued in the past, is the next logical step in the Internet’s evolution. (read)
  2. The complete disaggregation of the web in parallel with the slow decline of the destination web. (read)
  3. More and more people are publishing more and more “social objects” and sharing them online. That data deluge is creating a new kind of search opportunity. (read)”

Only connect …

The social aspects of this real time stream are clearly a core and emerging property.   Real time gives this ambient stream a degree of connectedness that other online media types haven’t.  Presence, chat, IRC and instant messaging all gave us glimmers of what was to come but the “one to one” nature of IM meant that we could never truly experience its social value.    It was thrilling to know someone else was on the network at the same time as you — and very useful to be able to message them but it was one to one.    Similarly IRC and chats rooms were open to one to many and many to many communications but they usually weren’t public.   And in instances that they were public the tools to moderate and manage the network of interactions were missing or crude.   In contrast the connectedness or density of real time social interactions emerging today is astounding — as the examples in the collage above illustrate.    Yet its early days.    There are a host of interesting questions on the social front.    One of the most interesting is, I think, how willthe different activity streams intersect and combine / recombine or will they simple compete with one another?      The two dominant, semi-public, activity streams today are Facebook and Twitter.    It is easy to think about them as similar and bound for head on competition — yet the structure of these two networks is fairly different.    Whether its possible or desirable to combine these streams is an emerging question — I suspect the answer is that over time they will merge but its worth thinking about the differences when thinking about ways to bring them together.      The key difference I observe between them are:

#1. Friending on Facebook is symmetrical — on Twitter it’s asymmetrical.    On Facebook if I follow you, you need to follow me, not so on Twitter, on Twitter I can follow you and you can never notice or care.   Similarly, I can unfollow you and again you may never notice or care.   This is an important difference.   When I ran Fotolog I observed the dynamics associated with an asymmetrical friend network — it is, I think, a closer approximation of the way human beings manage social relationships.    And I wonder the extent to which the Facebook sysmetrical friend network was / is product of the audience for which Facebook was intially created (students).   When I was a student I was happy to have a symmetrical social network, today not so much.

#2. The data on Facebook is assumed to be mostly private, or shared within private groups, Facebook itself has been mostly closed to the open web — and Facebook asserts a level of ownership over the data that passes through its network.   In contrast the data on Twitter is assumed to be public and Twitter asserts very few rights over the underlying data.    These are broad statements — worth unpacking a bit.    Facebook has been called a walled garden — there are real advantages to a walled garden — AOL certainly benefited from been closed to the web for a long long time.   Yet the by product of a closed system is that (a) data is not accessible or searchable by the web in general –ie: you need to be inside the garden to navigate it  (b) it assumes that the pace innovation inside the garden will match or exceed the rate of innovation outside of the garden and (c) the assertion of rights over the content within the garden means you have to mediate access and rights if and when those assets flow out of the garden.   Twitter takes a different approach.     The core of Twitter is a simple transport for the flow of data — the media associated with the post is not placed inline — so Twitter doesnt need to assert rights over it.    Example — if I post a picture within Facebook, Facebook asserts ownership rights over that picture, they can reuse that picture as they see fit.    If i leave Facebook they still have rights to use the image I posted.    In contrast if I post a picture within Twitter the picture is hosted on which ever service I decided to use.   What appears in Twitter is a simple link to that image.   I as the creator of that image can decide whether I want those rights to be broad or narrow.

#3. Defined use case vs. open use case.    Facebook is a fantastically well designed set of work-flows or use cases.   I arrive on the site and it present me with a myriad of possible paths I can follow to find people, share and post items and receive /measure associated feedback. Yet the paths are defined for the users.   If Facebook  is the well organized, pre planned town Twitter is more like new urban-ism — its organic and the paths are formed by the users.    Twitter is dead simple and the associated work-flows aren’t defined, I can devise them for myself (@replies, RT, hashtags all arose out of user behavior rather than a predefined UI.   At Fotolog we had a similar set of emergent, user driven features.  ie:  groups formed organically and then over time the company integrated the now defined work-flow into the system).    There are people who will swear Twitter is a communications platform, like email or IM — other say its micro-blogging — others say its broadcast — and the answer is that its all of the above and more.   Its work flows are open available to be defined by users and developers alike.   Form and content are separated in way that makes work-flows, or use cases open to interpretation and needs.

As I write this post Facebook is rapidly re-inventing itself on all three of the dimensions above.    It is changing at a pace that is remarkable for a company with its size membership.     I think its changing because Facebook have understood that they cant attempt to control the stream — they need to turn themselves inside out and become part of the web stream.   The next couple of years are going to be pretty interesting.       Maybe E.M. Forrester had it nailed in Howard’s End:  Only connect! That was the whole of her sermon  … Live in fragments no longer.

The streams are open and distributed and context is vital

The streams of data that constitute this now web are open, distributed, often appropriated, sometimes filtered, sometimes curated but often raw.     The streams make up a composite view of communications and media — one that is almost collage like (see composite media and wholes vs. centers).     To varying degrees the streams are open to search / navigation tools and its very often long, long tail stuff.  Let me run out some data as an example.     I pulled a day of bit.ly data — all the bit.ly links that were clicked on May 6th.      The 50 most popular links  generated only 4.4% (647,538) of the total number of clicks.    The top 10 URL’s were responsible for half (2%) of those 647,538 clicks.  50% of the total clicks (14m) went to links that received  48 clicks or less.   A full 37% of the links that day received only 1 click.   This is a very very long and flat tail — its more like a pancake.   I see this as a very healthy data set that is emerging.

Weeding out context out of this stream of data is vital.     Today context is provided mostly via social interactions and gestures.    People send out a message — with some context in the message itself and then the network picks up from there.   The message is often re-tweeted, favorite’d,  liked or re-blogged, its appropriated usually with attribution to creator or the source message — sometimes its categorized with a tag of some form and then curation occurs around that tag — and all this time, around it spins picking up velocity and more context as it swirls.    Over time  tools will emerge to provide real context to these pile up’s.   Semantic extraction services like Calais, Freebase, Zemanta, Glue, kynetx and Twine will offer a windows of context into the stream — as will better trending and search tools.      I believe search gets redefined in this world, as it collides with navigation– I blogged at length on the subject last winter.   And filtering  becomes a critical part of this puzzle.   Friendfeed is doing fascinating things with filters — allowing you to navigate and search in ways that a year ago could never have been imagined.

Think chunk
Traffic isnt distributed evenly in this new world.      All of a sudden crowds can show up on your site.     This breaks with the stream metaphor a little — its easy to think of flows in the stream as steady — but you have to think in bursts — this is where words like swarms become appropriate.    Some data to illustrate this shift.   The charts below are tracking the number of users simultaneously on a site.    The site is a political blog.    You can see on the left that the daily traffic flows are fairly predictable — peaking around 40-60 users on the site on an average day, peaks are around mid day.    Weekends are slow  — the chart is tracking Monday to Monday, from them wednesday seems to be the strongest day of the week — at least it was last week.   But then take a look at the chart on the right — tracking the same data for the last 30 days.   You can see that on four occasions over the last 30 days all of a sudden the traffic was more than 10x the norm.   Digging into these spikes — they were either driven by a pile up on Twitter, Facebook, Digg or a feature on one of the blog aggregation sites.    What do you do when out of no where 1000 people show up on your site?

CB traffic minnesotaindependent.com

The other week I was sitting in NY on 14th street and 9th Avenue with a colleague talking about this stuff.   We were accross the street from the Apple store and it struck me that there was a perfect example of a service that was setup to respond to chunky traffic.     If 5,000 people show up at an Apple store in the next 10 minutes — they know what to do.   It may not be perfect but they manage the flow of people in and out of the store, start a line outside, bring people standing outside water as they wait. maybe take names so people can leave and come back.   I’ve experienced all of the above while waiting in line at that store.   Apple has figured out how to manage swarms like a museum or public event would.    Most businesses and web sites have no idea how to do this.    Traffic in the other iterations of the web was more or less smooth but the future isnt smooth — its chunky.    So what to do when a burst takes place?   I have no real idea whats going to emerge here but cursory thoughts include making sure the author is present to manage comments etc., build in a dynamic mechanism to alert the crowd to other related items?    Beyond that its not clear to me but I think its a question that will be answered — since users are asking it.    Where we are starting at betaworks is making sure the tools are in place to at least find out if a swarm has shown up on your site.    The example above was tracked using Chartbeat — a service we developed.    We dont know what to do yet — but we do know that the first step is making sure you actually know that the tree fell — real time.

Where is Clementis’s hat? Where is the history?

I love that quote from Kundera.    The activity streams that are emerging online are all these shards — these ambient shards of people’s lives.    How do we map these shards to form and retain a sense of history?     Like the hat objects exist and ebb and flow with or without context.    The burden to construct and make sense of all of this information flow is placed, today, mostly on people.    In contrast to an authoritarian state eliminating history — today history is disappearing given a deluge of flow, a lack of tools to navigate and provide context about the past.    The cacophony of the crowd erases the past and affirms the present.   It started with search and now its accelerated with the now web.    I dont know where it leads but I almost want a remember button — like the like or favorite.   Something that registers  something as a memory — as an salient fact that I for one can draw out of the stream at a later time.   Its strangely compforting to know everything is out there but with little sense of priority of ability to find it it becomes like a mythical library — its there but we cant access it.

Unfinished

This media is unfinished, it evolves, it doesnt get finished or completed.    Take the two quotes below — both from Brian Eno, but fifteen years apart — they outline some of the boundaries of this aspect of the stream.

In a blinding flash of inspiration, the other day I realized that “interactive” anything is the wrong word. Interactive makes you imagine people sitting with their hands on controls, some kind of gamelike thing. The right word is “unfinished.” Think of cultural products, or art works, or the people who use them even, as being unfinished. Permanently unfinished. We come from a cultural heritage that says things have a “nature,” and that this nature is fixed and describable. We find more and more that this idea is insupportable – the “nature” of something is not by any means singular, and depends on where and when you find it, and what you want it for. The functional identity of things is a product of our interaction with them. And our own identities are products of our interaction with everything else. Now a lot of cultures far more “primitive” than ours take this entirely for granted – surely it is the whole basis of animism that the universe is a living, changing, changeable place. Does this make clearer why I welcome that African thing? It’s not nostalgia or admiration of the exotic – it’s saying, Here is a bundle of ideas that we would do well to learn from.  (Eno, Wired interview, 1995)

In an age of digital perfectability, it takes quite a lot of courage to say, “Leave it alone” and, if you do decide to make changes, [it takes] quite a lot of judgment to know at which point you stop. A lot of technology offers you the chance to make everything completely, wonderfully perfect, and thus to take out whatever residue of human life there was in the work to start with. It would be as though someone approached Cezanne and said, “You know, if you used Photoshop you could get rid of all those annoying brush marks and just have really nice, flat color surfaces.” It’s a misunderstanding to think that the traces of human activity — brushstrokes, tuning drift, arrhythmia — are not part of the work. They are the fundamental texture of the work, the fine grain of it. (Eno, Wired interview, 2008)

The media, these messages, stream — is clearly unfinished and constantly evolving as this post will likely also evolve as we learn more about the now web and the emerging social distribution networks.

Gottwald minus Clementis

Addendum, some new links

First — thank you to Alley Insider for re-posting the essay, and to TechCrunch and GigaOm for extending the discussion.    This piece at its heart is all about re-syndication and appropriation – as Om said “its all very meta to see this happen to the essay itself”.     There is also an article that I read after posting from Nova Spivack that I should have read in advance — he digs deep into the metaphor of the web as a stream.    And Fred Wilson and I did a session at the social media bootcamp last week where he talked about shifts in distribution dynamics — he outlines his thoughts about the emerging social stack here.   I do wish there was an easy way to thread all the comments from these different sites into the discussion here — the fragmentation is frustrating, the tools need to get smarter and make it easier to collate comments.

Creative destruction … Google slayed by the Notificator?

The web has repeatedly demonstrated its ability to evolve and leave embedded franchises struggling or in the dirt.    Prodigy, AOL were early candidates.   Today Yahoo and Ebay are struggling, and I think Google is tipping down the same path.    This cycle of creative destruction — more recently framed as the innovators dilemma — is both fascinating and hugely dislocating for businesses.    To see this immense franchises melt before your very eyes — is hard to say the least.   I saw it up close at AOL.    I remember back in 2000, just after the new organizational structure for AOL / Time Warner was announced there was a three day HBS training program for 80 or so of us at AOL.   I loath these HR programs — but this one was amazing.   I remember Kotter as great (fascinating set of videos on leadership, wish I had them recorded), Colin Powell was amazing and then on the second morning Clay Christensen spoke to the group.    He is an imposing figure, tall as heck, and a great speaker — he walked through his theory of the innovators dilemma, illustrated it with supporting case studies and then asked us where disruption was going to come from for AOL?    Barry Schuler — who was taking over from Pittman as CEO of AOL jumped to answer.   He explained that AOL was a disruptive company by its nature.    That AOL had disruption in its DNA and so AOL would continue to disrupt other businesses and as the disruptor its fate would be different.     It was an interesting argument — heart felt and in the early days of the Internet cycle it seemed credible.   The Internet leaders would have the creative DNA and organizational fortitude to withstand further cycles of disruption.    Christensen didn’t buy it.     He said time and time again disruptive business confuse adjacent innovation for disruptive innovation.   They think they are still disrupting when they are just innovating on the same theme that they began with.   As a consequence they miss the grass roots challenger — the real disruptor to their business.   The company who is disrupting their business doesn’t look relevant to the billion dollar franchise, its often scrappy and unpolished, it looks like a sideline business, and often its business model is TBD.    With the AOL story now unraveled — I now see search as fragmenting and Twitter search doing to Google what broadband did to AOL.

a5e3161c892c7aa3e54bd1d53a03a803

Video First

Search is fragmenting into verticals.     In the past year two meaningful verticals have emerged — one is video — the other is real time search.   Let me play out what happened in video since its indicative of what is happening in the now web.     YouTube.com is now the second largest search site online — YouTube generates domestically close to 3BN searches per month — it’s a bigger search destination than Yahoo.     The Google team nailed this one.    Lucky or smart — they got it dead right.    When they bought YouTube the conventional thinking was they are moving into media —  in hindsight — its media but more importantly to Google — YouTube is search.     They figured out that video search was both hard and different and that owning the asset would give them both a media destination (browse, watch, share) and a search destination (find, watch, share).  Video search is different because it alters the line or distinction between search, browse and navigation.       I remember when Jon Miller and I were in the meetings with Brin and Page back in November of 2006 — I tried to convince them that video was primarily a browse experience and that a partnership with AOL should include a video JV around YouTube.     Today this blurring of the line between searching, browsing and navigation is becoming more complex as distribution and access of YouTube grows outside of YouTube.com.    44% of YouTube views happen in the embedded YouTube player (ie off YouTube.com) and late last year they added search into the embedded experience.    YouTube is clearly a very different search experience to Google.com.       A last point here before I move to real time search.    Look at the speed at which YouTube picked up market share.  YouTube searches grew 114% year over year from Nov 2007 to Nov 2008!?!     This is amazing — for years the web search shares numbers have inched up in Google favor — as AOL, Yahoo and others inch down, one percentage point here or there.    But this YouTube share shift blows away the more gradual shifts taking place in the established search market.     Video search now represents 26% of Google’s total search volume.

summize_fallschurch

The rise of the Notificator

I started thinking about search on the now web in earnest last spring.    betaworks had invested in Summize and the first version of the product (a blog sentiment engine) was not taking off with users.   The team had created a tool to mine sentiments in real-time from the Twitter stream of data.    It was very interesting — a little grid that populated real time sentiments.   We worked with Jay, Abdur, Greg and Gerry Campbell to make the decision to shift the product focus to Twitter search.   The Summize Twitter search product was launched in mid April.   I remember the evening of the launch — the trending topic was IMAP — I thought “that cant be right, why would IMAP be trending”, I dug into the Tweets and saw that Gmail IMAP was having issues.    I sat there looking at the screen — thinking here was an issue (Gmail IMAP is broken) that had emerged out of the collective Twitter stream — Something that an algorithmically based search engine, based on the relationships between links, where the provider is applying math to context less pages could never identify in real time.

A few weeks later I was on a call with Dave Winer and the Switchabit team — one member of the team (Jay) all of a sudden said there was an explosion outside.   He jumped off the conference call to figure out what had happened.    Dave asked the rest of us where Jay lived — within seconds he had Tweeted out “Explosion in Falls Church, VA?”  Over the nxt hour and a half the Tweets flowed in and around the issue (for details see & click on the picture above).    What emerged was a minor earthquake had taken place in Falls Church, Virginia.    All of this came out of a blend of Dave’s tweet and a real time search platform.  The conversations took a while to zero in on the facts — it was messy and rough on the edges but it all happened hours before main stream news, the USGS or any “official” body picked it up the story.  Something new was emerging — was it search, news — or a blend of the two.   By the time Twitter acquired Summize in July of ’08 it was clear that Now Web Search was an important new development.

Fast forward to today and take a simple example of how Twitter Search changes everything.    Imagine you are in line waiting for coffee and you hear people chattering about a plane landing on the Hudson.   You go back to your desk and search Google for plane on the Hudson — today — weeks after the event, Google is replete with results — but the DAY of the incident there was nothing on the topic to be found on Google.  Yet at http://search.twitter.com the conversations are right there in front of you.    The same holds for any topical issues — lipstick on pig? — for real time questions, real time branding analysis, tracking a new product launch — on pretty much any subject if you want to know whats happening now, search.twitter.com will come up with a superior result set.

How is real time search different?     History isnt that relevant — relevancy is driven mostly by time.    One of the Twitter search engineers said to me a few months ago that his CS professor wouldn’t technically regard Twitter Search as search.   The primary axis for relevancy is time — this is very different to traditional search.   Next, similar to video search — real time search melds search, navigation and browsing.       Way back in early Twitter land there was a feature called Track.  It let you monitor or track — the use of a word on Twitter.    As Twitter scaled up Track didn’t and the feature was shut off.   Then came Summize with the capability to refresh results — to essentially watch the evolution of a search query.      Today I use a product called Tweetdeck (note disclosure below) — it offers a simple UX where you can monitor multiple searches — real time — in unison.    This reformulation of search as navigation is, I think, a step into a very new and different future.   Google.com has suddenly become the source for pages — not conversations, not the real time web.   What comes next?   I think context is the next hurdle.    Social context and page based context.    Gerry Campbell talks about the importance of what happens before the query in a far more articulate way than I can and in general Abdur, Greg, EJ, Gerry, Jeff Jonas and others have thought a lot more about this than I have.    But the question of how much you can squeeze out of a context less pixel and how context can to be wrapped around data seems to be the beginning of the next chapter.    People have been talking about this for years– its not that this is new — its just that the implementation of Twitter and the timing seems to be right — context in Twitter search is social.   74 years later the Notificator is finally reaching scale.

A side bar thought: I do wonder whether Twitter’s success is partially base on Google teaching us how to compose search strings?    Google has trained us how to search against its index by composing  concise, intent driven statements.   Twitter with its 140 character limit picked right up from the Google search string.    The question is different (what are you doing? vs. what are you looking for?)  but  the compression of meaning required by Twitter is I think a behavior that Google helped engender.     Maybe, Google taught us how to Twitter.

On the subject of inheritance.  I also believe Facebook had to come before Twitter.    Facebook is the first US based social network — to achieve scale, that is based on real identity.  Geocities, Tripod, Myspace — you have to dig back into history to bbs’s to find social platforms where people used their real names, but none of these got to scale.    The Twitter experience is grounded in identity – you knowing who it was who posted what.    Facebook laid the ground work for that.

What would Google do?

I love the fact that Twitter is letting its business plan emerge in a crowd sourced manner.   Search is clearly a very big piece of the puzzle — but what about the incumbents?   What would Google do, to quote Jarvis?   Let me play out some possible moves on the chess board.   As I see it Google faces a handful of challenges to launching a now web search offering.    First up — where do they launch it,  Google.com or now.Google.com?    Given that now web navigational experience is different to Google.com the answer would seem to be now.google.com.   Ok — so move number one — they need to launch a new search offering lets call it now.google.com.    Where does the data come from for now.google.com?    The majority of the public real time data stream exists within Twitter so any http://now.google.com/ like product will affirm Twitter’s dominance in this category and the importance of the Twitter data stream.    Back when this started Summize was branded “Conversational Search” not Twitter Search.     Yet we did some analysis early on and concluded that the key stream of real time data was within Twitter.    Ten months later Twitter is still the dominant, open, now web data stream.   See the Google trend data below – Twitter is lapping its competition, even the sub category “Twitter Search” is trending way beyond the other services.   (Note: I am using Google trends here because I think they provide the best proxy for inbound attention to the real time microbloggging networks.   Its a measure of who is looking for these services.    It would be preferable to measure actual traffic measured but Comscore, Hitwise, Compete, Alexa etc. all fail to account for API traffic — let alone the cross posting of data (a significant portion of traffic to one service is actually cross postings from Twitter).   The data is messy here, and prone to misinterpretation, so much so that the images may seem blurry).   Also note the caveat re; open.   Since most of the other scaled now web streams of data are closed / and or not searchable (Facebook, email etc.).

screenshot
gTrends data on twitter

Google is left with a set of conflicting choices.     And there is a huge business model question.     Does Ad Sense work well in the conversational sphere?   My experience turning Fotolog into a business suggests that it would work but not as well as it does on Google.com.    The intent is different when someone posts on Twitter vs. searching on Google.   Yet, Twitter as a venture backed company has the resources to figure out exactly how to tune AdSense or any other advertising or payments platform to its stream of data.    Lastly, I would say that there is a human obstacle here.     As always the creative destruction is coming from the bottom up — its scrappy and and prone to been written off as NIH.     Twitter search today is crude — but so was Google.com once upon a not so long time ago.     Its hard to keep this perspective, especially given the pace that these platforms reach scale.     It would be fun to play out the chess moves in detail but I will leave that to another post.   I’m running out of steam here.

AOL has taken a long time to die.    I thought the membership (paid subscribers) and audience would fall off faster than it has.    These shifts happen really fast but business models and organizations are slow to adapt.  Maybe its time for the Notificator to go public and let people vote with their dollars.   Google has built an incredible franchise — and a business model with phenomenal scale and operating leverage.   Yet once again the internet is proving that cycles turn — the platform is ripe for innovation and just when you think you know what is going on you get blindsided by the Notificator.

Note:    Gerry Campbell wrote a piece yesterday about the evolution of search and ways to thread social inference into  search.    Very much worth a read — the chart below, from Gerry’s piece, is useful as a construct to outline the opportunity.

gerry-campbell-emerging-search-landscape1

Disclosure.   I am CEO of betaworks.    betaworks is a Twitter shareholder.  We are also a Tweetdeck shareholder.  betaworks companies are listed on our web site.

Micro-giving on the Huff Po

Ran the following essay on the Huff Po over xmas. Piece by Ken Lerer and I on what we are learning from the charity water drive and the possibilities of micro-giving.

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Here is the article from the Huff Post:

Micro-Giving: A New Era in Fundraising

Thirty years ago, a young economics professor named Muhammad Yunus started a new kind of banking in Bangladesh — tiny loans to small entrepreneurs. Few thought these dreamers in a dirt-poor country would ever repay. But most did — and in 2006, Yunus won the Nobel Peace Prize.

Micro-lending has changed lives, built communities and created unlikely leaders.

Now a wave of friends and “loose ties” within the social media community are bringing the micro-lending concept and applying it to charitable giving.

Call it “Micro-giving”.

Late last week Laura Fitton of Pistachio Consulting launched a new kind of fundraising drive: an effort to raise $25,000 for a nonprofit called charity: water, a cause that works to bring clean, safe water to developing countries. She chose Twitter as her platform for financial pledges. And because she was aware of the bleak economy bearing down on her friends, she didn’t want to lean on them for significant contributions. “I asked for $25,000,” she says, “which would be just $2 for each reader I have on Twitter.”

In four days, @wellwishes had raised over $5,000. Average pledge size has been $8.50, the median is $2. And the beneficiary has taken notice. “I see micro-giving as the next stage of online fund raising,” says Scott Harrison, founder and president of charity: water. “The idea of thousands of $2 gifts adding up to wells in Africa that impact thousands of lives is something everybody can get behind.”

Though reminiscent of the Obama campaign’s decentralized funding, @wellwishes is a whole new model because it incorporates convenient, tiny donations made right on Twitter — the word-of-mouth powered social network and microblogging platform. Using payment service from a company called Tipjoy, it’s both simple and social to give. Your pledge shows up on Twitter as “p $2 @wellwishes for charity: water to save lives” (This is shorthand for “pay $2 to the Charity organization whose user name on Twitter is wellwishes.”) And that message goes — instantly — to all of the people who follow you on Twitter.

Laura Fitton (her Twitter user name is Pistachio) kicked off the campaign with an announcement of the experiment:

p $2 @wellwishes just to practice my hand at using micropayments on @tipjoy

In a later Tweet, she made her appeal:

I want something TOTALLY insane for Christmas: 12,500 people each to donate $2 for clean water @wellwishes.

And many did. Okay, these are pledges, not donations. But just as poor people pay their micro-loans, so micro-donors make good on their pledges — so far, an astonishing 86% have come through.

And then there’s the fact that the request gets personalized as people pass it on. Some add just a phrase: “very cool”. Others say the same thing, but with more characters: “small bits via Twitter + big audience = good xmas”.

The message is as important as the medium — using Twitter/Tipjoy, everyone who participates is both a donor and a broadcaster.

That suggests we’re entering a new era in fundraising and perhaps other social/political causes. What’s new? Virtual tribes — networks of caring people with more commitment than cash.

And that’s what excites us about micro-giving: It takes so little. You might not have much to spare, but you’ve got a penny jar — and we all know that if you reach in and remove a handful of change, you’ll feel no pain. What’s great about the new, frictionless online giving we’re testing here is that, if you’ve got a good cause, you no longer need to spend a fortune on real-world marketing. Online, with word of mouth and simple technology, pennies can become serious money.

Muhammad Yunus says that we can create a poverty-free world “if we collectively believe in it.” That’s a lot of belief. It will be easier to create that world if good causes have adequate funding — and if they can get that funding a few pennies at a time.

That, it seems to us, is a “very cool” idea. So give it a whirl. Give here and support charity: water, and be among the first to try what we hope is a new way to give online — micro-giving. For which you get large thanks.

disclosure note: betaworks is an investor in Twitter and Tipjoy. Tipjoy waived all fees for this effort, and, with betaworks, is making a matching gift.

We are making solid progress towards the goal. You can see a running total here.

What changed last week …

man with head in the ground.jpg

Excerpts from a note to the betaworks companies sent last week. Some other charts, and some color added.  This was already posted by SAI and Fred — thank you both.

“By now you have all read the stories from the media and venture capital world about how larger macroeconomic issues will affect the start up world.

Last week, was one shitty week. That said a downturn has been evident for a while here in NY — and most of you have already started to make adjustments to your plan, we first talked about a downturn at the brown bag in February. But two things did change this past week. (a) The credit crisis and the crisis of confidence in our markets got way worse (b) silicon valley woke up that something had changed. The first point is the one to focus on — the second is a distraction. So on to the first point — what changed this week? The confluence of events — from housing, to energy prices, to credit to equity markets, to global coupling to domestic panic, matched with domestic political uncertainty … have created a toxic mix for the economy — a perfect storm. You need to think about things differently, things have changed and your priorities should change. I broke up our thinking at betaworks into two blocks, the first is what you should be thinking about in terms of your business and the second outlines some thoughts on what this means for the market.

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#1. Priorities for you and your business:

Remember it’s a cycle, but this is going to be a longer one than we expected (that perfect storm issue)
Andy, David and I and many of you have lived through a few business cycles. Things look ugly but with distress come opportunities. Scarcity drives innovation, always has, always will. Do more with less. DO MORE with less — a trite one liner that you need to make part of your companies DNA. There will be more emphasis on user value, more ways to make money from that value — we will finally fess up to the fact that many of the ad models of web 2.0 dont yield results and we will invent one’s that do, all around there will be more innovation, its counter intuitive but during an up cycle people accept conventional wisdom, during a down cycle people challenge it. Thats good. Very good. And the cycle will winnow competition. Over the last cycle the people who were standing at the end came out on top — it sounds like a low bar but its not. This week the shift (storm) got worse and it became global. Worse in that its clear its going to take a while for the broader economy to recover. And global in that for about a year financial analysts had been arguing as to how linked — or coupled — the global economy was, this week they got the answer. This will effect your business, how is not so clear. Some negatives, some positives — keep reading.

Follow the money
Many of you are running your businesses very cheaply right now and break-even is within reach. Get there. One of the headline shifts that is taking place is that people (partners, investors, the market) are going to shift focus from audience + revenue to just revenue. This happened in the last downturn and a lot of entrepreneurs didn’t adapt to the shift till it was too late. Investors have likely encouraged you to focus on audience, you now need to focus on revenue. Cash is king, cash gives you flexibility and options — once you get to break-even the whole world will look different. Making money, like everything you do — takes work, time and attention. It will take longer than you expect and it happens in ways you can’t plan (see voting example below). Start working on it now. If you have just raised money or are raising, get it closed. The cost of capital is going up — again cash, think runway, cash and revenue.

Watch your spend, make necessary cuts now
No surprises. If you think a piece of your product needs two developers to build it, do it with one. Be excessively creative in thinking about revenues and trying those ideas. Rethink *all* your projections, looking at how reductions in cost and accelerations in revenue strategies affect the numbers. Then redo them again. You’ll be stronger. Face reality as it is, not as you wish it was. Change the mix of sales and performance based employees. Think about what you can outsource — and how you can distribute your costs. There are companies and people we are working with who are doing great things with outsourced teams — its hard and it requires different workflow but when it works it can change your whole business make up. And if you need make cuts, make them now. Don’t cut 10% now and then another 10% early next year — make the change in one fell swoop. Piecemeal’ing your way through change kills momentum, it hurts culture and the team and is a chicken shit way to run a business. You know what your plan looks like. Figure out what your runway looks like and do more with less, figure out how to extend your runway till you get to break-even.

Know you data
You have heard me rant about this before, but you have to know what’s going on, know your data really really well. Financial data, your burn, your cash flow, revenues, runway and site usage data. You cant “follow the money” if you dont know where things stand. There are a lot of things you can do to improve everything from burn to traffic. But first you need to know where you stand. So every week you have a picture of your position — make this a habit. I used to hate to do this, but once you make it a habit it becomes a tool. During an up cycle you can follow instinct, and usually your raw instinct is what you should follow — during down cycle your instinct can lead you far astray (see Zillow example below). You need to know you data. At betaworks we are going to offer some SEO / SEM / analytics to our network. All part of knowing where things stand and optimizing from there.

Compete
Take the offensive. Many of your competitors are not as well positioned as you — this is an opportunity to take share. These points are in order of priority — once you know where you stand, where you are making money, what your burn is — think aggressively about growth and market share.

This is my favorite slide from the sequoia deck (link to the deck is below):

4ff630ec03516035119014d4a5a150c5.png
3D2C95CA-8BB7-4BF6-AE22-94C474C76F51.jpg

East Coast, West Coast drama
The fact that the west coast seemingly woke up to this shift — spilled a lot of ink — this week is something that needs to be considered in a balanced way. “High time” was my first reaction to the Valley waking up — heck back in March or thereabouts there was a small run on a CA bank, I thought that would be a wake up call that things had changed to West Coast VC, seemingly it wasnt. My second reaction was lets skip the fear and panic. Media will do what it always does, there is a lot of drama that will be injected into the conversation. Fear and loathing, RIP, Armageddon, War and Peace … all good movies / books but the media will blow this out of proportion — thats what they do (I love this quote from the sequoia meeting: “It¹s always darkest before it¹s pitch black”, really,?@#!). Also note many of the people writing went through the last contraction — it was painful for them personally and they are finally getting to talk about that pain. Leave that to shrinks. Focus on the fundamentals and how to adapt to change and you will get to the other side of this stronger and better. Alan Patricof outlined more of an East coast view yesterday: http://bit.ly/26hbqA . This cycle of technology and software innovation isnt stopping. Markets winnow out losers from winners. Entrepreneurship isnt easy, if you thought this was about a quick flip — its time to go home now. You are building companies — you know what you signed up for. This isnt like the last cycle where companies have been spending like drunks, the last party we had at betaworks, was the brownbag, it kinda said it all, bring your own lunch. Winners will emerge from this cycle — smart leaders will adapt, others will die. This is what we all signed up for when we decided to be entrepreneurs. Fear has become a key currency in our culture — dont trade in it, its a distraction — use it to change if you need but then put it aside. Sorry about the Doll$ar image up above — it just cracks me up. Read this if you need a kick in the pants: http://bit.ly/dcl0T

#2. Big, broad changes.
With the economy heading into the worst setback most of you, most of us, have ever seen — think big, broad changes. Its been a long week, but let me try to anticipate a few. Useful to think about how things will change now.

Momentum and change.
Some of our business is based on momentum. Thats taken a turn for the worse. You have to adjust fast — thats your job. I love this example that Gurley uses — where Zillow surveyed average decline of housing prices across the US (20-30%) and *then* asked the surveyed people how much they had personally lost in value — people said 0%. As humans we accept change as something that someone else needs to adapt to. Think about your business, you have to change, not someone else. See: http://bit.ly/1wE8K2. And remember a Welsch maxim or two: Control your own destiny or someone else will and Change before you have to.

Cost of capital
The cost of capital has gone way up (again face reality as it is, not as you wish it were). Dont panic, just make sure you realize the rules have changed

Advertising
There will be a flight to quality, this always happens (history: http://bit.ly/ppHcO) . But this time I think its going to be more than that. For TV and print this has been an unusual year, the shift to online has been stemmed first by the Olympics and second by the election. That said year over year % growth in ad spend has been down across the board (see slide 32 of the sequoia deck, linked below). Expect the next year to be ugly and different. I think spend will move online, very fast — print may slide downhill, right downhill. And people will look for ROI — real measurable results. Monetizing social media is hard — two of our companies Lotame and Lookery — are focussed on just that. Much to do here, much money/share to make/take.

Beyond advertising
Much web 2.0 was about advertising to the tail, the wonders of google and adsense. The truth that most people havent spoken up much about is that (a) neither Google or Yahoo did a great job of monetizing much outside of search (b) the Google business is still mostly in the head of the curve, not the tail. The scale focus on auction based ad buying has distracted us from other business models. This week I had a bite with the CEO of Hi Media (who bought Fotolog) — they are an ad network, but they are now making a lot of money on payments. And a significant chunk is via “microfame” payments — fotolog users voting each other up in popularity based boards, in september, month some users spent more than $2k each voting on these boards (http://flog.fotolog.com/rank). Many of our companies are experiment with payment models — Tipjoy, Ideeli, IILWY, Covestor, SomeEcards … there is money to be made here — from payments to item sales to t shirts. Businesses to be built.

The elephants will dance
Pieces are going to move on the chess board, big pieces — anticipate and watch and plan — this shouldn’t be your focus but things are going to have change around your business, and they might effect you. IMO, Yahoo is going to be sold or bought, AOL sold. Ebay will either be sold or bought or broken up. Facebook is going to have to change (cut spending, focus on revenue) or it will be bought, same for Linked-in. Microsoft, News Corp. TWX and other media companies will be buyers. What does Google do in this cycle — freeze or bold? The newspapers — do they act out of fear or freeze up? Tel co’s and cell co, cable co’s — the pipes — do they jump upstream? Why care? — well as these pieces move around the chess board they may well effect your future, so watch carefully. If Paypal — which by some estimates is now 50% of the value of Ebay — gets spun out of ebay then they will accelerate services beyond advertising. etc. etc. Remember september 11th 2001 — how, the day after, it felt like just another day — it wasnt the world had changed, and that awful day was just the demarcator that history used. Again everything has changed, and now is simply the line that history will use. So consider the moves the elephants make, the equation for them, public or private has changed.

Openness
I think this cycle is going to drive another significant shift in how open and interconnected the web is. This is good news for you, this is bad news for the Facebooks of the world who tried to replicate the walled garden strategy of web 1.0. Think about what happened through the last cycle … start with AWS. In the 1990’s internet companies had to own everything top to tail — today you can use Amazon and other services to pop up a new box for hundreds of dollars, if that. Thats a huge shift — its also a shift towards interdependency. We are all now dependent on the amazon’s of the world for parts of our infrastructure. I think this turn of the cycle or screw is going to drive a lot more openness. This in turn ties to the market figuring out how to rapidly establish bottom’s up standards, this is about working with others and figuring out how to do things without having to do all the work.

some light reading for your weekend:

http://bit.ly/22BJrj
Silicon Valley Finds It Isn’t Immune From Credit Crisis – WSJ.com

http://bit.ly/3BbqV3
Sequoia Capital deck startups and the economic downturn

http://bit.ly/1fVGrx
Inside Details of Sequoia Capital’s Doomsday Meeting With its Companies – G…

http://bit.ly/26hbqA
VC dean Alan Patricof warns against panic, urges entrepreneurs to seize the…

http://bit.ly/dcl0T
Master of 500 Hats: Fear is the Mind Killer of the Silicon Valley Entrepren…

http://bit.ly/4DsSUw
Angel Investor Ron Conway Emails His Portfolio Companies Over Financial Mel…

http://bit.ly/1wE8K2
Benchmark Capital Advises Startups To Conserve Capital, Look For Opportunit…

http://bit.ly/ppHcO
How Bad Will The Ad Market Get? Time To Get Out The History Books

http://bit.ly/FvwGK
News Corp. Estimates Cut in advertising

Some notes I was sent from the Sequoia Capital meeting:

Today, Sequoia Capital hosted a mandatory CEO All-Hands Meeting on Sand Hill
Road. There were about 100 CEO¹s in attendance and let me tell you, the
mood was somber. I¹m not one to perpetuate doom and gloom or bad news, but
let me underscore this for you: We are in a serious economic downturn and
this is just the beginning. Immediate, decisive and swift action is
required, along with frugal, day-to-day management of expenses and our
business is required.

***Here are my notes from the meeting. Keep this note in your in-box and
read it every day. I¹m serious folks, this is for our survival.***

Speakers:

· Mike Moritz, General Partner, Sequoia Capital (he moderated the
speakers).

· Eric Upin, Partner, Sequoia Capital (Eric ran the $26-Billion
Stanford Endowment Fund and knows a few things about Economics and
investing.)

· Michael Partner, Sequoia Capital (Michael was recruited to start
Sequoia¹s very first hedge fund, coming from Maverick Capital and Robertson
Stephens.)

· Doug Leone, , General Partner, Sequoia Capital

Slide projected on the huge conference room screen as people assembled
inside the conference center to take their seats: a gravestone with the
inscription: RIP, Good Times.

Mike Moritz:

· The only time Sequoia¹s assembled all CEO¹s like this was during
the dot.com crash.

· We are in drastic times. Drastic times mean drastic measures must
be taken to survive. Forget about getting ahead, we¹re talking survive.
Get this point into your heads.

· For those of you that are not cash-flow positive, get there now.
Raising capital is nearly impossible if you¹re too far off of cash flow
positive.

· There will be consequences for those who hesitate. Act now.

Eric Upin:

· It¹s always darkest before it¹s pitch black.

· Survival of this storm means drastic measures must be taken now, so
you will have the opportunity to capitalize on this down turn in the future.

· We are in the beginning of a long cycle, what we call a ³Secular
Bear Market.² This could be a 15 year problem. [many slides on historical
charts of previous recessions, averaging 17 year cycles.]

· The credit market [versus the Equity markets] are the issue and
will take time to recover.

· Inflection point: Make changes, slash expenses, cut deep and keep
marching. You can¹t be a general if you turn back.

· This is a global issue and not a OEnormal¹ time.

· There is significant risk to growth and your personal wealth.

· Advice:

o Manage what you can control. You can¹t control the economy, but you can
control everything else.

§ Cut spending. Cut fat. Preserve Capital.

§ Don¹t trust your models and spreadsheets. All assumptions prior to today
are wrong.

§ Focus on quality.

§ Reduce risk.

Michael Beckwith:

· Note: Michael had a lot of slides that were charts, data points
and comparisons.

· A ³V² shaped recovery is unlikely [^]

· Cuts in spending will accelerate in Q4/Q1. Look at eBay
just the beginning.

Doug Leone:

· This is a different animal and will take years to recover.

· Getting another round if you¹re not profitable will be rough.

· Do everything possible to get to cash flow positive. Now.

· Nail your Sales and Marketing message.

· Pound your competitors shortcomings. They¹re hurting and they will
be quiet.

· In a downturn, aggressive PR and Communications strategy is key.

· M&A will decrease dramatically and only lean companies, with proven
sales models will be acquired.

· Spectrum discussion:

o Capital Preservation ß———————————-à Grab Market

o Everyone should be far to the left (capital preservation)

· Requirements of our companies:

o You must have a proven product

o You must cut expenses. Now and deep.

o Your product should reduce expenses and drive revenue [NOTE: I want to
revisit this with the Management team. Our solution does both, we need to
quickly and crisply define the sound bite here.]

o Honestly assess your solution vs. your competitors.

o Cash is king [have you gotten this message yet?]

o You must get to profitability as soon as possible to weather this storm
and be self-sustaining.

· Operations review:

o Engineering: Since you already have a product, strongly consider
reducing the number of engineers that you have.

o Product: What features are absolutely essential? Choose carefully and
focus.

o Marketing: Measure everything and cut what is not working. You don¹t
need large Product Marketing, Product Management teams.

o Sales & Business Development: What is your return on this investment?
The Valley has gotten fat with Sales people: Big bases, big variables. Cut
base salaries on sales people, highly leverage them with upside (increase
variable) and make people pay for themselves via increased sales
productivity. Don¹t add sales people until you¹ve achieved your goals with
sales productivity. Be disciplined.

o Pipeline: Scrub the shit out of it and be honest with yourself.

o Finance: Defer payments, what is essential? Kill cash burn.

· Death Spiral (Nobody moves fast enough in times like these, so get
going and research later.)

o The death spiral sucks you in, you¹re in it before you know it and then
you die.

o Survival of the quickest.

o Cutting deeper is the formula for survival.

o You should have at least one year¹s worth of cash on hand.

o Tactics:

§ Assess your situation. Drop your assumptions, start with a blank page
and start zero-based budgeting.

§ Adapt quickly

§ Make your cuts

§ Review all salaries

§ Change sales comp

§ Bolster your balance sheet
and save it.

§ Spend like it¹s your last dollar.

· Get Real or Go Home.

—— End of Forwarded Message

Summize acquired by Twitter

As announced this am, Twitter is acquiring 100% of Summize. Deals between two private companies are easy to consider and hard to close. In this case we had both companies on a tear and the teams on both sides who were interested in a partnership — the hope here is that what makes sense today only makes more sense down the road. Search on twitter will evolve into more than search — this is starting to happen today (more below), but bringing these teams together will only accelerate the pace of that evolution. The deal started with a conversation with Fred Wilson about how conversational search can evolve into navigation, about how important navigation becomes for UGC as you go mainstream — it concluded with the deal that was announced this morning. Betaworks is now a twitter shareholder, and excited to be one.

Finding a pain point
The history of most startup’s is made up of iterations, learning and restarts — Summize was no exception. The Summize team worked hard for a little over a year developing sentiment based algorithms aimed at crawling the review and blogosphere. Late last year they formally launched a web product that let you search reviews for books, movies and music. It worked well — offering summaries of all the reviews for a particular book, structured programmatically so they could be organized and swiftly digested by users or publishers. Yet it was complicated — not in theory or in its presentation — but in practice it was a complicated problem that most end users didnt know they needed. As an old friend would put it Summize v1. didn’t address a discernible need or pain point.

I remember early this year we took the Summize team over to meet with an executive at News Corp. After the WSJ/Dow Jones acquisition, News Corp. was thinking about data centric media and how conversational media — the blogosphere — can be mapped and structured in a scalable manner. Jeremy was fascinated by the technology but pushed us hard as to whether we knew whether people were really looking for programmatic structured access to sentiment. By March it was clear we couldn’t get the sentiment focussed company funded by VC’s — many people were interested but no one was ready to take the risk. I think this is part of the chasm between east and west coast companies — out west, interesting technology can and is often funded purely on the merits of the technology — out east, not so. At betaworks we decided to work with the Summize team repoint the technology — and launch twitter search. Why Twitter? Three reasons: there was a gap in the market for a scaled search / navigation experience of twitter, summize technology was very capable of providing and scaling a great search experience across the twitter’s live river of conversations and finally Twitter, the base data set, was growing like a weed.

Growth
It’s astounding how fast the Summize service took off. The growth is charted in this post. The premise was that there is a real time data distributed across services online that is hard to digest and that search is a well know metaphor to aggregate up these conversations into something meaningful for people. Twitter was the logical starting point — traffic was exploding and Twitter was quickly becoming a real time, one to many communications platform. Search is so often viewed as a destination experience — get this result and move on. Summize search is different — because its conversational and real time you keep searches running and open in tabs, you repeat them time and time again, to watch the conversation evolve and change — watch that refresh bar on any of the topics linked to above. The approach worked. Traffic exploded, not only on the UI but also on the API. Distributed, live search — very, very different to how search has been done to date on the web.

Now web
There is something new going on here. Somewhere in the past few months the way that I experience the Internet and specifically live information changed — there is a “now web” emerging out of an ecosystem of loosely coupled products. There has always been an immediate, instant component to the web and web communications — it goes back to mailing lists, IM, email & blog commenting. But its taking on a whole new form — the density of the conversations and the speed at which they emerge and evolve is different. I first sensed the shift with the trending topic list on front page of Summize. This is a feature that the team created right out of the sentiment based technology of Summize v1. The first night we launched v2. I recall seeing the word IMAP was trending — my first thought this has to be a mistake, but when I ran the search it turned out that Gmail was having IMAP issues. Then a few weeks later during a telephone call one participant on the call heard an explosion outside his home. He jumped off the call to see what was happening, Jay came back 5 mins later, shook up but with no idea what the noise was. This post shows the Summize stream of responses to a simple question — there had been a minor earthquake in VA. A few weeks later the earthquake in China was also emerged out of the twitter stream before it hit MSM.

We experienced this again last week — in full force — when we launched the bit.ly product. A deceptively simple URL shortener that we developed with Dave Winer. Six days after its launch bit.ly is on a tear. The launch last week started with a fantastic write up by Marshall Kirkpatrick — it moved from there into twitter and summize and within mins we were getting live feedback on the product, how to tune and test it, complaints about the lack of privacy policy and ton of great ideas. I am learning as I go — but its a whole new world out there and thanks to Summize we can converse with in a far more direct and organized manner. This should be evident again today — run a search for this or this and watch it evolve.

In summary
Summize is a great example of what we aspire to do at betaworks. Working with a great team of technologists who created a wonderful product, one that on the surface is deceptively simple — where the smarts are all under the hood. One that we helped launch and scale. Many thanks to the Summize team. Jay, Abdur, Greg, Eric and team worked very very hard to make this happen — they peered into startup abyss and decided they werent going there — you guys are smart and brave. Thank you to the advisors who worked w/ Summize the make this happen — Gerry Campbell and Josh Auerbach. And thanks to the Twitter team. I have great hopes for the joint team.

Also see Summize post by Jay

web 2.0 & making money

Article in today's financial times about Web 2.0 companies making, and not, making money.   I think the article is right and we are likely heading for some consolidation — but the article misses the most interesting points about why and how that consolidation will take place.  Its a fairly typical turn of the tide article — replete with a bonus quotation from someone who just raised a lot of money.     Moving on from the drama of MSM — start with why there will be consolidation of some form.  

The web 1.0 companies who survived and prospered did so mostly on the back of Google —  its distribution and its monetization platform.    The fact that many web 2.0 companies have yet to turn a profit is an indication that (a) Google's  platform is still not optimized for this generation of web services and that (b) Facebook, the company everyone expected to provide an alternative, has thus far failed to  provide a platform to build a business.    A year ago this week I drafted an essay on why I believed the Facebook platform needed to offer Web 2.0 applications more than just distribution — its a year later and the data is starting to be tabulated.    Facebook has left a wide gaping opportunity for others to drive into –and companies driving in to fill this gap need to scale social graphs and in order to do that they are opening up — Facebook's misstep, accomplished two moves on the chess board!    They had a chance to build another walled garden but now they are in a struggle to the bottom (or top) of who can become more open — very good for the web as a whole and, specifically, very good for web 2.0 companies.      

Moving to the how.    This shift will pry open opportunity and monetization platforms across the web – and its likely we will have diversity in this system, it will likely be much more sustainable than web 1.0.    While this change is taking place its important to grow audience, manage costs and experiment with monetization approaches that follow the grain of your service.   And lastly, the consolidation the FT talks about — may not be the typical consoldation we see as busssiness go through changes — many of the web 2.0 companies have managed overhead/costs very aggresively, there might be opportunities to loosely couple parts instead of the organizational pain that mergers spawn.    More to come on this later when I have some time to write.