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I Thought The Web Was The Platform
I remember the tagline for Tim O'Reilly and John Battelle's first web 2.0 conference.
Web 2.0 - "The Web As A Platform"
We've seen the definition of Web 2.0 change since then and become so hyped up that its borderline worthless as a term now. But when I first saw that phrase, I really liked it and I still do.
So when I happened upon Jeremy Zawodny's blog post on "Platforms, Mashups, and Markets", I read it three of four times to try to understand the point he was making.
Jeremy starts with mashups and observes (with the help of Greg Linden) that mashups may be nothing other than free R&D for the large portals. Jeremy assets that the big guys will watch what you build on top of their platforms and copy the best of them.
Then Jeremy goes on to say that "The platform is what you must build today in order to create a new on-line market."
In the process of making this argument, he links to my post on an open market for online advertising. Which doesn't make much sense to me, because in that post I was not suggesting the creation of a new platform.
I believe the web is a platform. And that everything we need for an open ad market, or an open data archticture, or frankly most anything else, is available on the "web platform" today.
This may be nothing more than semantics, but when I hear people use the word "platform" I often think proprietary. And I believe that "proprietary platforms" aren't going to get us where we need to go.
A commenter in Jeremy's post clearly identifies me in that camp and says:
This is not 1995, you need to have lot of IP (Entire IP Portfolio of GYM) in order sustain as a business. Most of the web 2.0 companies are noice in IMHO. Building a web platform is not an average startup model. This is the model where VCs like Vinod Khoslas and John Doerrs of the world will thrive and Others ( Like Fred Wilson of the world ) will miss it because they wont see the value immediately. Iam yet to see a company currently out in the market which can survive as a stand alone business.
Being mentioned in the company of John Doerr and Vinod Khosla is always nice even if the point is that they are smart and recognize the value of IP and I do not.
It's not that I don't recognize the value of IP, its just that I don't think IP is what this is all about. As Paul Graham said in his essay on Web 2.0:
Web 2.0 means using the web as it was meant to be used, and Google does. That's their secret. The web naturally has a certain grain, and Google is aligned with it. That's why their success seems so effortless. They're sailing with the wind, instead of sitting becalmed praying for a business model, like the print media, or trying to tack upwind by suing their customers, like Microsoft and the record labels.
Google doesn't try to force things to happen their way. They try to figure out what's going to happen, and arrange to be standing there when it does. That's the way to approach technology-- and as business includes an ever larger technological component, the right way to do business.
It's a great observation. The Web is a Platform and you must build on top of it and you must be open and you must not try to lock people in. If you do, you are eventually going to regret it.
December 3, 2005 Venture Capital and Technology | Comments (12) | TrackBack (5)
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» The Web as a platform or not from mathewingram.com/work
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» Versioning and platforms from EconoMeta
Fred Wilson says that the definition of Web 2.0 has become so hyped up that its borderline worthless as a term, but that he likes the early definition the web as a platform.
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Comments
Is it wise to build a business that's completely dependent on a specific, independent 3rd party (such as Google Maps)?
Is it wise to invest in a 3rd party-dependent business in which the 3rd party declares that you can't do it for commercial reasons?
What may be happening is that the platforms are simply waiting till clever mashups emerge that are easily replicated, and then simply replicate them.
Or, waiting until so many mashups are completely dependent on them (and probably violating the no-commercial term), and then announce a fee structure.
We want our Web 2.0 business to be smart, creative, and aggressive - but we don't want to be stupid (or, probably more accurately, naive).
Posted by: Terry Steichen | Dec 3, 2005 9:23:48 AM
- sorry, didn't mean to have my company number at the bottom - I was using an Outlook email as a spellcheck!
Posted by: Peter Nixey | Dec 3, 2005 9:28:07 AM
I have always enjoyed your allusions to the web as the platform, Fred. I do nonetheless think that whilst the idea is catchy and simple it's also too simple.
A platform is anything that raises someone up to a new level of power. A computer is a platform and provides resources such as a processor, memory and storage. It's not the platform that the majority of developers build on though, they build on the OS, on the browser or higher still, on a website – Ebay or Del.icio.us.
The more useful and accessible a platform is, the more people/developers it attracts. I should imagine that there’s a power law for the number of people actually developing/creating on each of the levels I mentioned above.
The ‘web’ enables developers to do a huge amount but also requires a huge amount of work to implement. Want to sell something and in a lot of cases you're best to treat EBay as your platform. Want to be found and you'd better be sure to treat Google as your platform.
That platform doesn't have to be proprietary and the most successful ones (search engines) aren't. We may recently have seen a change of perspective but Google reached where it is today by being entirely non-proprietary. Write your webpage in HTML, get someone to link to it and it'll end up somewhere on their index.
The platform is an enabler and a catalyst. People will gravitate towards whatever enables them most effectively whether it is Rails, Base, Del.icio.us, Digg or something new. As Jeremy pointed out, it is also that platform that ultimately collects the cash.
I believe that the real essence of web2.0 is not actually Javascript, mashups tagging or any other implementation detail. Web2.0 is about what's possible when you realise that the power of the web is not in the computers it connects but the people.
Web2.0 is about what’s possible when we use people to process data rather than machines. All the other details of Web2.0 – Ajax, tagging, RSS are nothing more than tools that optimise the quantity we can process and the quality we produce.
Posted by: Peter Nixey | Dec 3, 2005 9:28:41 AM
Google is proprietary. Successful platforms--ones that make money through customer adoption and/or 3rd Party ISV adoption, are all proprietary. The owner of the platform benefits most from it, and the owner usually fights hard to protect its dominant position. IBM owns the PC platform, mostly, and Intel and Microsoft have largely taken it over in hardware and OS, a level up from IBM.
Microsoft's OS dominance continues over Apple largely because of its ability to attract and retain both customers and ISVs--over 70,000--who benefit from the low-cost, high-value platform. Apple's platform is higher-cost, high-value, and is a lot less interesting for a 3rd Party to build for strictly because of its low market position. We don't build for Mac, as much as we'd like to, because it's not a lucrative market for us and does little to move us forward. The web browser + web _ web apps totally marginalizes Microsoft's platform, and they get that so they fight to stay relevant by adding hooks for developers so it's easy and low-cost or free to make money for their platform. When PC makers start shipping $100 machines that turn on directly to the web with no other application options, Microsoft is in trouble. In fact, Google should invest in seeing that happen.
But Google provides a set of APIs that are not free and available for independent commercial use. When they told us that about Google Maps and asked us to stop using them, we switched over to Microsoft Maps, and will likely stick with that proprietary platform. We go where it's easy, low-cost, and lucrative for us to go.
If there were a set of free APIs, a free database of maps, we'd build to that (maybe there is; we have no time to look for it though). Or we'd buy it as a commodity so we could control how we and our 3rd parties use it. Until then, we'll depend on Microsoft because it helps us serve our markets for little pain.
When we release our own platform, it will be free, open, etc etc except where it's not--like all proprietary systems, it exists for a reason. That's to attract a critical mass of developers and customers and benefit from the economic activity that depends on it.
To create/attract/retain the economic activity, the platform has to be 1) functional 2) easily adapted 3) unobtrusive to the apps using it and 4) low-cost to use and implement. It can't represent greater value than the end value, and should represent a small fraction of the overall cost. And the more customers the platform has, the more value it has to ISVs.
Google could really blow it if it continues to put up barriers to 3rd-Party ISVs.
Posted by: charlie crystle | Dec 3, 2005 1:13:13 PM
Every business has at least one proprietary partner or supplier. Most businesses have many.
Unlike operating systems, which you can pay once for an use in an unlimited fashion, providing web services costs the provider money every time a consumer uses them. So obviously the provider is going to need to recapture those costs somehow. The winner will be the provider that does so in a manner that is least onerous to the consumer.
Posted by: Jeffrey McManus | Dec 3, 2005 7:25:17 PM
I am the guy who wrote the comment on Jeremy’s blog. Sorry for offending you. I tend to get frustrated when people try coin terms like "Web is the platform". IMO Web is not a platform but a distribution channel controlled by no single company. I define Platform is a set of software applications and APIs a software company distributes on which Independent software vendors (ISVs) can develop applications providing additional value.
Is Google/Yahoo/MSN are platform companies in web distribution channel model,
The answer is No.
None of current major web service providers figured out how to generate revenue through their APIs. In offline world your application runs exclusively inside the platform vendor environment such as Microsoft windows. Nothing works without the platform in offline platform. In Web world that is not the case, software tends to stay on ISV environment not inside the platform vendor environment that makes very difficult to generate revenues from mash up business models of ISVs.
Unless you empower ISV, there is no chance of every having a platform on web distribution channel, expect more fragmentation if there is no platform.
However the chap who figures this riddle will be the next Microsoft. Even if you figure how to monetize and empower ISVs this is not 1995, this is 2005 you need lot of IP on which ISVs must leverage from - that means you need to develop all the web applications and APIs of SAP, Yahoo and EBay by a single vendor.
VCs will play pivotal role in the coronation of the next platform vendor by cash infusion at right inflection point. Most VCs who tends to looks at management teams, revenue models, tend to focus on deals which they can see clear value. But there are some VCs who look at value side of IP and strategy of startups. VCs should worry more about increasing upside and not worry about downside.
What do you think?
Posted by: Ramana Kovi | Dec 3, 2005 10:27:14 PM
i just want to say that the discussion on this blog is great. ever since i started reporting on tech last year, it's been insane case of hype vocabulary and it's been helpful to read this stuff for me. not that its clarified anything 100% but i'm closer to having comprehension and perspective.
Posted by: irina slutsky | Dec 4, 2005 1:38:37 AM
ramana
i am not offended by your comment at all. i posted it because it's an important part of the conversation.
the conversation leads to understanding. this is a topic of great interest to me and i appreciate that you are helping me understand all of this stuff.
fred
Posted by: fred | Dec 4, 2005 8:52:34 AM
Google wants to invest in Wifi access. Why? Same reason for opening up its APIs. Ads. The more people have access, the more they'll search, and as long as Google appears to be a better search experience, those people will go to Google.
Same with APIs. Sure, Google will see which mashups will benefit them, and I'll guess they'll copy some and buy or invest in others. But they are doing it for two reasons that serve the goal of Google as center of the universe: attract and develop more sticky functionality around the platform, thereby attracting more participants and driving more ads and ad revenue, and giving developers/people the ability to create more and more relevant content, again, from which they make more ad revenue. I disagree with Paul G and Fred on Google being "with the grain"; they are trying to become the grain--in a wholly proprietary way.
The Web is certainly a platform, but customers don't care about that. They care about what works for them. This morning I walked down to the cafe to get some coffee, and on the way back only walked on the shoveled paths. Why? Because it was easier. It worked.
It sounds so mundane, but customers don't care about the mechanics of what's going on, they just want it to work, and they'll do their part from there. Like my sister said at Thanksgiving about software: it should just work. The underlying platform, Web 2.0 discussions, etc, really pale in comparison to what works for the people who pay our bills--the customers. My question to Fred is this: where do we "need to go"?
Man, Pandora works, at least on the surface. Very cool app.
Posted by: Charlie Crystle | Dec 4, 2005 11:56:52 AM
It might be helpful to note that there are two separate ways that value can be built being discussed here:
(1) by building a new application on an existing platform
(2) by building a new platform (possibly on an existing platform)
Applications like Google search and del.icio.us tagging are of the first kind: they are built on "the web as platform." But Google and del.icio.us APIs, and for that matter eBay and RoR, are of the second kind: they are new platforms, and also proprietary.
A question that a lot of people seem to be asking is, "should I consider building a new application on a new, proprietary platform?" That's an interesting question...more here.
Posted by: Adam Marsh | Dec 4, 2005 3:47:19 PM
It's fairly easy to make money from API's in the current environment: (1) Google can reserve the right to place ads on any site that uses an API for say Google Maps, and also offer to share revenue with the site (or the site owner can elect to pay for the feed instead); (2) API's that enable more transactions on the parent service (such as the Google AdWords API) inherently make more money for the parent service by encouraging customers to use the parent paying service.
As for the parent "portals" usurping or replacing the mashup, aren't there enough data sources/feeds around today to prevent that (as pointed out above, if Google Maps rejects or hassles you, use MS Maps), and won't there continue to be more feeds that mashup makers can use?
Finally, many mashup businesses should be able to create their own value through the data they gather from customers to make the mashup useful - make it free, encourage it to grow fast, make the data freely portable and transferable, but always think about other (non privacy invasive) uses for the data. That's how you can create value without a ton of IP.
Posted by: Joe Agliozzo | Dec 4, 2005 3:52:09 PM
Platform is not some mythical thing. It is actual software IP one need to put together. A "web platform" vendor have to provide some basic services, some of those are
Core services
1. Authentication system (e.g. SXIP, Passport)
2. Payment System ( e.g. Paypal)
3. Reputation System ( e.g. Opinity)
4. Credit/Risk Management System (Dun & Bradstreet/FICO )
5. ...
6. .....
Data services
1. Product Catalog Services ( e.g. Amazon/iTunes etc)
2. Mapping services ( Google/Yahoo/MSN/Map quest)
3. News services ( Reuters/AP)
4. Ad Network ( Adword)
5. ...
6. ….
3. Communication/Collaboration Services
1. E-Mail
2. Calendar & Messaging
3. Blogs
4. Wikis
5. Social networks
6. ....
I am sure you can pull together a mash up from multiple vendors but eventually some vendor will come up with a platform with all the above mentioned services. It will be free but not the way web 2.0 folks want.
Do you agree or disagree? what is your opinion?
Posted by: Ramana Kovi | Dec 4, 2005 5:26:28 PM
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