On Web 2.0 Definitions

The buzz has been increasing over the past few days on what is Web 2.0, and what it is not. Om sort of initiated the movement by blogging his answer to a question asked during a dinner conversation. My own response (at the same dinner) included 3  characteristics: openness of data and services, rich user experience and low cost of delivery.

1. Openness of data and services, to contrast with closed data silos that still exist today (Amazon reviews/recommendations, eBay reputation).
2. Rich user experience, based on technology providing increased interactivity (Ajax, Ruby,…) and clever remix/combinations of numerous services (maps, photos, calendar, lists,…) that free the developers from building infrastructure and focus on the user and its needs. I found that Trulia is a great example of such rich user experience, providing instant gratification upon the first use (Disclosure: I have no relationship with Trulia).
3. Low cost of delivery, as I have written/talked about many times over, this new generation of applications is built bootstrapped on $50K to $100K tops (provided that the founding team pays itself very little). From there, the odds are that:
• a few will hit it big (or even huge)
• some of these companies will reach profitability relatively quickly and have their options open, but it is not clear how far they will scale
• others will have very decent exits with one of the GEYAMA club after taking in just a minimal investment $$$
• a number will be rolled up into other Web 2.0 startups during a (necessary) consolidation
• the rest… well… will stagnate, fade away and eventually disappear. But because of the limited working capital requirements, a consolidation might take a long time to effect.

Note that these scenarii can be applied to any startup, and the only difference here is the limited requirement on capital intake. Which led to my “closing” remark, that I was not sure how the usual VC economics will work out in this otherwise fascinating space.

Going through comments and links on the topic, I found a very interesting essay from Tim O’Reilly attempting to broadly define Web 2.0. Also from Tim comes a compact definition that I subscribe to:

Web 2.0 is the network as platform, spanning all connected devices; Web 2.0 applications are those that make the most of the intrinsic advantages of that platform: delivering software as a continually-updated service that gets better the more people use it, consuming and remixing data from multiple sources, including individual users, while providing their own data and services in a form that allows remixing by others, creating network effects through an "architecture of participation," and going beyond the page metaphor of Web 1.0 to deliver rich user experiences.

Richard Mc Manus in his weekly wrap-up also has a few useful pointers on the subject.

Quite an appropriate topic for the week leading to the Web 2.0 conference.

PS: I replaced built by bootstrapped above to clarify that the initial development of the startup is what costs $50 to $100K.

Comments

[Tom Simpson]

The most important element of Web 2.0 (in my opinion) is the conversation. Tim touched in is by calling it an "architecture of participation". The "conversations" are the essence of openness and a rich user experience is about. The low cost of delivery allows for more people to be "included", but isn't really an element of what Web 2.0 is all about.

[Jeff Clavier]

Tom> I agree that the architecture of participation is an important feature, but I disagree that it is the most important. You can have great composite appplication/services providing instant value just based on the functionality that you are being offered.
On cheap cost of delivery (which includes cost of building), it might be because of my focus on helping early stage startups to get the right amount of capital from the right sources, but I will argue that this is a key characteristic.

[Lyndoman]

I like to think all it means is "new stuff". But in reality I read so many versions of the definition that I am starting to think it doesn't exist at all. Can something exist that cannot be described, or is it really that the act of defining comes with distance. To be honest I think that only those who can't understand it can explain it.

[Lux]

Web 2.0 is what I call < webware >.

It's social, participative and personal software applications available online.

Web 1.0 was < webdata >.

Now we moved on to < webware >.