October 7th, 2005

Web2Con: Remixing/Mash-up Apps and Competitive Advantage

by Joshua Porter  |   4 Comments

The following bit emerged out of the Mash-ups 2.0: Where’s the Business Model? session at the Web 2.0 Conference.

Despite it’s name, there was only one salient point about business models to emerge from this session, in my opinion.

The point came from Paul Rademacher, the creator of the most interesting mash-up we’ve seen so far: Housingmaps.com. To make Housingmaps, Paul combined data from two public services: Google Maps and Craigslist.

His point revolved around the idea that if you’re creating a mash-up from publicly-available data, then that data cannot be your competitive advantage, since anybody else can access the same data and create the same application as you.

Given that, competitive advantage must come from somewhere else. Paul suggested that there were three ways to do this with mash-ups.

1. User Experience Advantage
   User experience as competitive advantage means that your interface or some other part of the experience is actually better than other applications, which makes users want to stay with it. This could be ease-of-use, customer service, accessibility issues, and other things. This is the goal that Paul was shooting for with Housingmaps, and the resulting elegant interface shows his attention to this detail. I should point out, however, that Paul is not really competing with anybody with his application. In fact, because of the success of Housingmaps, he got a job at Google.
2. Algorithmic Advantage
   This is the advantage that Google Search has enjoyed over the last 6-7 years. Google can be seen as a mash-up because it indexes basically the same data that anybody else can index, but their algorithm for assigning relevance to content (Pagerank) is superior to others. Also, it is widely known that Google continues to refine its algorithm all the time, so they’re intent upon keeping this advantage over time. Another service that intends on leveraging an algorithm is Linked In, which creates tools that allow people to create links to other people in their social network, and then produces interfaces that make those links apparent. Because of this, LinkedIn has become one of the most popular of social networking sites among a sea of competitors.
3. Added Data Advantage
   This means adding data on top of the publicly-available data being used. This is the approach that sites like Yahoo are adopting, adding services that you can quickly get up to speed with and tie into your existing Yahoo account. Additionally, there are sites like MapBuilder, which I found out about as the result of you readers!, that adds personal data on top of a Google Maps interface.

These approaches are not orthogonal: many applications will try to leverage all at once. Most developers will try to make a great interface, perhaps add some additional data, and possibly create an exceptional algorithm.

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