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February 11, 2007

Web 2.0 is Stuck at a Local Optimum

Sketch of a fitness landscape. The arrows indicate the preferred flow of a population on the landscape, and the points A, B, and C are local optima. The red ball indicates a population that moves from a very low fitness value to the top of a peak. Illustration by C.O. Wilke, 2001.

Sketch of a fitness landscape. The arrows indicate the preferred flow of a population on the landscape, and the points A, B, and C are local optima. The red ball indicates a population that moves from a very low fitness value to the top of a peak. Illustration by C.O. Wilke, 2001.

Tim O’Reilly blogs: “What really needs to be done is not just to connect the various social networks that do exist in internet network-of-networks style, but also to social-network enable our real social network apps: our IM, our email, our phone. Where, I keep asking vendors, is the Web 2.0 address book?... When one of the big communications vendors (email, IM OR phone) gets this right, simply by instrumenting our communications so that the social network becomes visible (and under the control of the user), it seems to me that they could blow away a lot of the existing social network froth.”

When his happens, we’ll have gotten past the local optimum which Web 2.0 is stuck on (which ironically, is that Web 2.0 is optimized for GLOBAL rather than local groups). Implicitly Tim is saying this because he is looking for the vendors of INTERNET apps – email, IM, Phone – rather than vendors of Web apps to be the source of the needed innovation.

[If you already know all about fitness landscapes and local optima as these terms are used in evolution, skip the next paragraph.]

Visualize a landscape pimpled by peaks of various sizes. Visualize a population in which random mutations occur and are heritable or copyable. In this case the population is a bunch of web entrepreneurs so we’re not getting into any creationism debates (today). Height represents the number of unique daily visitors to a web site. Mutations which lead up are rewarded by more capital; mutations which lead down are punished by loss of access to capital just when it’s needed.  Standing on a peak can get you acquired.  The problem comes once a population is on a peak. It is very difficult to get to a higher peak across a fitness landscape because you have to go down to go up. And mutations which take you down are punished.

For very good reasons Web 2.0 services optimized themselves for the global communities which the Internet enabled; this was a good peak to climb and totally unoccupied because, before the Internet, it was impossible to knit global communities together without regard to distance.  Web 2.0 services also optimized for low initial costs of entry and viral marketing; as I’ve posted before, that’s a great strategy for the first social networking service and maybe even the tenth; it doesn’t work for the hundredth because everybody else is doing it.

The great environmental change affecting web businesses today (evolution is a mechanism for coping with change) is that we’ve passed a tipping point for use of the web by local organizations – organizations which already exist. Since it is now more likely than not that the majority of members of most local groups in the US have some sort of broadband access, these groups are ready to go beyond IM and email and even cheap phone calls in their use of the Web.

Web 2.0 entrepreneurs know this. In an excellent taxonomy of social networks, Liz Gannes blogs on GigaOM: “Everyone and their mother wants to build white-label social network to serve an existing interest or community these days, but most of the stuff I’ve tried using is pretty crappy.”

Why is what they build so crappy? Because they’re trying to use the stuff they so successfully developed to serve global groups to meet the needs of local groups. Trouble is local groups have different needs.

Local groups (unlike the global groups formed by the social networks) already exist. This is not about forming groups; it’s about serving them. Some may not even want new members.  Few of them will see the Web as their primary means for getting new members.

Access control may be much more important to local groups than global groups.

Most local groups are not populated by us nerds. They want easy more than cool.

Local groups may not care much about free. Those that have web sites are paying too much for design and hosting and getting too little usability in return.  They could pay something substantial (compared to what Web 2.0 services charge) and still come out way ahead.

From a marketing POV, the decision to use a web provider to meet the needs of the existing group in NOT an individual decision like using del.icio.us or digg; it’s a decision made by whomever or whatever committee is already in charge of communication for the group.

Please feel free to use comments to add to the list of differences.

The great Web application(s) for existing groups will come. My guess is that few if any these applications of them will come from those who have been successful with Web 2.0; they’re trapped on local optima by their prior success when the market was a different place.

The Local Web won’t be Web 2.0+ or Web 3.0; it won’t be the semantic web; it’ll be its own unique self, a branch from lower on the evolutionary tree. And it’ll be huge.

Related posts: (note that it took me awhile to realize that the Local Web is NOT Web x.0)

For Web 2.0 Success - Think Local, Act Local

Web 2.0 – The Global Opportunities in Local

Local – The First Life Opportunity

The Newbies are Coming

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