March 15th, 2006
Monetize This!
by Joshua Porter | 
8 Comments | shortlink: http://bokardo.com/p/379
Martin Lamonica’s piece Making Web 2.0 Pay is indicative of the growing concern among Web watchers, venture capitalists, and other interested techies who are worried how to monetize the amazing innovative period we’re in. However, I think his piece, though illuminating, is exactly the type of thing that developers should run away from immediately because it focuses on the problem of making money at the industry level, and not the level that matters: the level of your individual users.
In his piece Martin discusses issues like making money via mashups, building to flip, and commodity office applications and points to several reasons for the new boom:
- High-speed internet connections
- Ajax
- APIs
- Cheap startup costs
So Lamonica’s point is that it is simply easier to create now. These seem like very reasonable factors for the new companies and products we’re seeing. However, simply having the means doesn’t really lead to innovation…but solving someone’s problem in a better way does. So in addition to technology-related reasons, I would add a couple more factors to Lamonica’s list, including two that can directly lead to solving people’s problems:
- Increased attention pain
Techies, who are often ahead of the curve in most areas, are feeling the pain of increased pressure on their attention more than anyone else. Especially those who read RSS feeds. This is an obvious problem, and so is a great place to look to innovate and build. - Increased frustration with desktop software
You don’t have to replace something that works great. Desktop software, though it works well for a single person talking to themselves, is horrible at leveraging the network. (it wasn’t built for it) The frustration we have with the inability to communicate with every tool we use leads to new innovation as much as simply the possibility of it. - High profile success stories
It’s easy to imagine growing a business and getting bought out by a big company. However, the ability to imagine it is nothing compared with seeing it actually happen with 1 and 2 year-old companies like Flickr, Upcoming.org, Writely, etc… These are the canaries in the mineshaft for the onlookers just waiting for the water to warm up before they jump in.
Giving away the prized milk cow
Certainly, in an effort to get a network effect many companies are giving away their prized milk cow by failing to charge for their service. But the thing is, people don’t mind spending money on things they find valuable. Why else would teenagers spend 2-3 dollars each for dozens of ringtones? (This is something I will never fully appreciate)
Instead of worrying how everyone else makes money with Web 2.0, I wonder if developers should ignore articles like Lamonica’s and instead worry about how they can solve the problems of their users. If they can do that, then they won’t have any problem making money. Focusing on mashups in general and getting bought out are not focusing on real problems. So I hope that developers don’t get too discouraged by Lamonica’s piece…and instead keep forging ahead despite the concerns.
I don’t remember where I heard this next quote but I think it still rings true, especially in light of the increasing questions we’re facing like those in Lamonica’s article:
All businesses succeed for different reasons, but fail for the same ones.
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Comments
1. Gavin Purcell 9:54am, Thu 16th, 2006
It’s interesting how much naysaying has arisen in regards to the world of the mash-up. Maybe part of it is a global cautionary reaction to the last bubble burst, everyone feeling that this time they’re personally responsible for warning everyone that business really do need to make money.
Jeff Jarvis had a great post a while back about how the true value of web 2.0 is the building of significant trust and relationships. Good mash-up sites are certainly helping to foster these ideas across the population of the internet.
A quote from that post
I think we still probably need to find a greater way to monotize these relationships (will there be even more targeted advertising?) and as a TV producer I’m still not entirely sure how we deal with the copyright issue but it does seem like we’re at a turning point of sorts in how we structure the economy of the net (and even beyond).
I’m leaning toward what you were saying above. If you make it right, they will come.
Anyways, love the blog!
2. Solomon 6:51am, Thu 23rd, 2006
Awesome analysis as always…
My take as a hard-core enterprise developer: Web 2.0 is being applied creatively to create new Business that can compete in the same space with money making existing business.
Take a look at Zopa… They’ve applied social software to banking and produced an amazing, viable company in the UK…
There are plenty of viable money making opportunities in both the consumer and enterprise businesses…
BTW, thanks for your thoughts on Information Grazing. Please take a look at how I use Grazr and Gada.be.
I love your comment preview… It’s great!
3. Alisya 1:51am, Fri 9th, 2007
I suspect that’s thereason general public want to read blog….Internet visitors generally create blogs to declare themselves or their secret views. Blog grant them same matter on the monitor screen what they specifically needed,so as the above stuffs declared it.
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