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Maximising opportunities in the online marketplace Web 2.0 and beyond Image: jimkster @ Flickr - http://ﬂickr.com/photos/jimkster/2723151022/

Image: jimkster @ Flickr - http://ﬂickr.com/photos/jimkster/2723151022/ Image: jimkster @ Flickr - http://ﬂickr.com/photos/jimkster/2723151022/

Image: jimkster @ Flickr - http://ﬂickr.com/photos/jimkster/2723151022/ dot

Image: ten safe frogs @ ﬂickr - http://ﬂickr.com/photos/tensafefrogs/724682692/

Image: ten safe frogs @ ﬂickr - http://ﬂickr.com/photos/tensafefrogs/724682692/ Letʼs start by looking at what “Web 2.0” really is... Letʼs start by looking at what “Web 2.0” really is... RSS Really Simple Syndication

• The “glue” between systems (for content syndication)

Further reading: • Common Craft - RSS in plain English: http://tinyurl.com/2s9uat RSS

Web applications

• Gmail is just one of the many web applications • Facilitates collaboration and other network beneﬁts RSS

Web applications

Developer tools Web services, AJAX, agile programming

• Asynchronous Javascript And XML • Collection of existing technologies that turn a browser into a “rich client” • More responsive experience for users • Agile programming methodology - quick to market, iterative development

Further reading: • Jesse James Garret (Adaptive Path) - Ajax: A New Approach to Web Applications:http://tinyurl.com/29nlsm • 37signals - Getting Real: http://gettingreal.37signals.com/ Image: dizid @ ﬂickr - http://ﬂickr.com/photos/dizid/96491998/

Itʼs the combination of technology and the social effects that they enable.

Image: dizid @ ﬂickr - http://ﬂickr.com/photos/dizid/96491998/

Further reading: • Clay Shirky - “Here comes everybody”: http://tr.im/9dt • The value increases the more “nodes” that are in the network (“A world of ends”) • Provide personal value ﬁrst... • Derive aggregate social (and organisational) beneﬁts • Value increases the more itʼs used

Further reading: • Joshua Porter - Leveraging the network: http://tinyurl.com/2n9l97 • Doc Searls & David Weinberger - World of Ends: http://www.worldofends.com/ • The value increases the more “nodes” that are in the network (“A world of ends”) • Provide personal value ﬁrst... • Derive aggregate social (and organisational) beneﬁts • Value increases the more itʼs used

Further reading: • Joshua Porter - Leveraging the network: http://tinyurl.com/2n9l97 • Doc Searls & David Weinberger - World of Ends: http://www.worldofends.com/ • “Social bookmarking” site – the “object” is a link • Add a link, tag (categorise) and search • Personal utility ﬁrst, social value second - leveraging the network • Social value = seeing what friends are linking, what links are popular for particular categories (tags) etc.

Further reading: • Joshua Porter - Leveraging the network: http://tinyurl.com/2n9l97 • Further reading: • • • • •

Everything isMiscellaneous (Book): Looking purelyatthe“product”sideofthings The Long Tail (Book): David Weinberger addstothediscussionwithhisbook“Everything is Miscellaneous” A (slight)majorityof Amazonʼs $$salescomesfromtheaggregate of “non-hits” Chris Anderson (EditorofWired) authored“TheLong Tail”

Popularity http://tinyurl.com/2aug85 Head http://tinyurl.com/2zpeqz

Products Long tail • iTunes & Amazon exemplify the long tail effect • Amazon: user reviews (leveraging network), afﬁliates (ﬂipping the funnel) • ebay: reputation system (leveraging network), breadth of items and decentralised distribution (long tail effect) • Google: using aggregate data of user activity for commercial gain (advertising) Viral expansion loops

• Embedded “viral expansion loops” into the product/business model • User signs up, then prompts/encourages other users to sign-up • Viral expansion loops are trickier in B2B models

Further reading: • Fast Company - “Ningʼ s Inﬁnite Ambition”: http://tr.im/1vm • User signs up, then prompts/encourages other users to sign-up • Viral expansion loops are trickier in B2B models

Further reading: • Fast Company - “Ningʼ s Inﬁnite Ambition”: http://tr.im/1vm http://cpacongress.ning.com/

• Ning is a prime example of viral expansion loops

Further reading: • CPA Congress community: http://cpacongress.ning.com/ Image: dhaneshr @ ﬂickr - http://ﬂickr.com/photos/dhaneshr/2786992830/

Start small. Fail early, learn often...

• Do one thing and do it well • Trust your users - user-centered design • *Engage* your audience - learn their needs, learn their needs • Respond intelligently based on user needs and your expertise, not necessarily speciﬁc user requests • Try things - see what sticks - success may come from unexpected places

Image: dhaneshr @ ﬂickr - http://ﬂickr.com/photos/dhaneshr/2786992830/

Further reading: • 37signals - “Getting Real”: http://tr.im/1ul Agile development

Image: Olivier Delaere @ ﬂickr - http://ﬂickr.com/photos/acinonyx1/1225083175/

• Agile development is particularly well suited to web products • Build only what you need; get it to the users; learn, reﬁne, evolve • Test driven development - allows for fast releases with conﬁdence

Image: Olivier Delaere @ ﬂickr - http://ﬂickr.com/photos/acinonyx1/1225083175/ API Application Programming Interface

Image: fpsurgeon @ ﬂickr - http://ﬂickr.com/photos/fpsurgeon/2384522828/

• Give your audience the tools to expand your product • Develop an eco-system of products around yours • Opportunities arise that you may not have thought of, or donʼt have the resources to provide yourself • In 2006: Over 40% of all Salesforce traffic via API, third-party sellers account for 28% of Amazon revenue ($490 million per quarter), eBay transactions growing 84% annually (source: http://tr.im/9dq) • If you donʼt support users - they will find someone who will, or find a way to do it themselves

Image: fpsurgeon @ ﬂickr - http://ﬂickr.com/photos/fpsurgeon/2384522828/

Further reading: • John Musser - “How much revenue via APIs?”: http://tr.im/9dq Image: covilha @ Flickr - http://ﬂickr.com/photos/11139043@N00/1439804758/

• Many different revenue models • Retail (sell products) • Freemium - free version, charge for additional features • Subscription/Pay-for-use • Try before you buy • Monetise user generated “content” - not just advertising > Flickr and eBay could be considered this way. • “Clip of sale”: Flickr, eBay, RedBubble, Etsy • Revenue sharing! • Infrastructure/White label • Indirectly

Image: covilha @ Flickr - http://ﬂickr.com/photos/11139043@N00/1439804758/

Further reading: • Laurel Papworth - “Social Media Monetization and Revenue”: http://tr.im/ait • David Heinemeier Hansson - “The secret to making money online”: http://tr.im/c0v The “because” eﬀect: What happens when you make more money because of, rather than with something. Doc Searls

• In reference to blogs in particular, but applies in other ways • Amazon referrals program

Further reading: • Doc Searls - Adventures with Because Effects: http://tinyurl.com/2rhr5n • Gives stuff away for free, in return for market intelligence • Monetised primarily through advertising (primary - “because of”), though also on-selling infrastructure services (secondary - “with”)

Further reading: • Chris Anderson - “Free! Why $0.00 is the future of business”: http://tr.im/9ec Further reading: • David Heinemeier Hansson at Startup School 08: http://tr.im/c2p Further reading: • David Heinemeier Hansson at Startup School 08: http://tr.im/c2p • Apple App Store - high volume, low cost - traditional model without the free trial but low up-front cost • To August 2008: 60 million downloads, $30m revenue - ~$1m per day revenue • $250,000 for developer of $5 app (over 2 months)

Further reading: • Ars Technica - “Put up with iTunes App Store rules, collect $250,000”: http://tr.im/9er • Wall Street Journal - “iPhone Software Sales Take Off: Apple's Jobs ”: http://tr.im/9et

• Each application does one thing well • Freemium model • Low-velocity viral expansion loop • Each application does one thing well • Freemium model • Low-velocity viral expansion loop Further reading: • 37signals - “Getting Real”: http://gettingreal.37signals.com/ • NetAccounts - web application competing with MYOB and Quicken • Freemium model • API for integration with other online services such as shopping carts • Started small - grown to become fully featured application • Expanding internationally

Disclosure: I am a shareholder and was previously a developer on NetAccounts • In the interest of fairness - Xero is another example • NZ-based, but entering the Australian market • Limited API available to network partners • Revenue generated by financial services referrals • Personal benefit first - managing finances • Leverage the network for collective social benefit - places where you can save money, comparisons to aggregate data • Similar to Mint • Freemium model • Try before you buy - per user license fees • Salesforce application platform enables enterprise integration • Eco-system of applications and services built up around the platform/API • In 2006, 40% of all traffic came via their API (source: http://tr.im/9dq) • Misses opportunities: Doesnʼt leverage the online network. • Traditional sales model - sales-people + partner channels to “distribute”. Not viral or organic growth (no viral expansion loop). • Raising capital for smaller or larger projects (essentially unsecured loans) • “Crowd-funding” • Distributes risk • “Chip-in” widget supports “personal fundraising” • Revenue through transaction fees • Trust is paramount • Many features added to site support community in developing and protecting trust & reputation • Individuals who trust each other join together in investment groups • Australian-based p2p lending service • Also being leveraged in the non-profit sector • Connecting individual lenders in developed world with micro-businesses in developing world • Distributed risk • Low delinquency figures (possibly affected by war and violence in recipientsʼ country) • USD$46m raised - $765,000 loaned in the past week (source: kiva.org) • Game changing devices • iPhone average page size double typical mobile usage - using desktop sites on the mobile • Heavy video usage • Almost 6x the amount of data per session • Other players moving in this direction iPhone stats presented by Amethon Solutions - http://www.amethon.com/ at Mobile Monday 01-Sep-2008 • Game changing devices • iPhone average page size double typical mobile usage - using desktop sites on the mobile • Heavy video usage • Almost 6x the amount of data per session • Other players moving in this direction iPhone stats presented by Amethon Solutions - http://www.amethon.com/ at Mobile Monday 01-Sep-2008 Internet in Australia % of Australian population 110.0

82.5

55.0

27.5

0 Mobile Internet Broadband 3G Mobile

• 76% of population (15.5 million) access - NSW Department of State & Regional Development, 2007 • 22.7% broadband - OECD • Ranked 12th out of 30 OECD countries - Telstra • Mobile - over 100% penetration according to AMTA - http://tinyurl.com/59ozvh • 4.5 million 3G services - a 192 per cent increase between 30 June 2006 and 30 June 2007 - Approx. 21% - http://tinyurl.com/59ozvh • Note mobile broadband uptake - growing importance of mobile devices when considering online - more social applications - iPhone plans and usage change the landscape dramatically • Context is critical - understand where and how the mobile UI will be used - redeﬁnes “online” • Inherently social (phone, sms) combined with richer internet experience • News.com.au iPhone redesign - excellent example of rethinking for context • Other applications (NetNewsWire, Gmail etc.) think through and support most common uses - limit UI to improve usability on mobile devices • Location awareness will be a game changer - OneTap movies example, Loopt

Further reading: • Tim Lucas & Pete Ottery - “Developing for the iPhone”: http://tr.im/9e6 • Context is critical - understand where and how the mobile UI will be used - redeﬁnes “online” • Inherently social (phone, sms) combined with richer internet experience • News.com.au iPhone redesign - excellent example of rethinking for context • Other applications (NetNewsWire, Gmail etc.) think through and support most common uses - limit UI to improve usability on mobile devices • Location awareness will be a game changer - OneTap movies example, Loopt

Further reading: • Tim Lucas & Pete Ottery - “Developing for the iPhone”: http://tr.im/9e6 • What happens when “everybody” comes?

Image: ThisParticularGreg @ Flickr - http://ﬂickr.com/photos/thisparticulargreg/362937046/ • Not just about “word swapping” • Can have dramatic impact on UI - words can be up to 3 times longer than equivalents • Icon use can provide beneﬁts, but has own risks • Needs to be considered at all levels of the application

Further reading: • W3C Internationalization: http://www.w3.org/International/ Image: “Fail whale” by Yiying Lu - http://yiyinglu.com/

• Agile frameworks can present challenges with scalability • APIs can really stretch infrastructure - Twitter gets 10 times+ the trafﬁc through itʼs API

Image: “Fail whale” by Yiying Lu - http://yiyinglu.com/ - tshirt: http://tr.im/c2q

Further reading: • ReadWriteWeb - “Interview: Biz Stone - Co-Founder Twitter”: http://tr.im/c23 • Radical Behavior - “5 Question Interview with Twitter Developer Alex Payne”: http://tr.im/c25 Web Services

• Google App Engine - built in scaling support using “Big Table” database • Support for Python and the Django agile framework • Amazon Web Services - EC2, EBS, Simple DB, S3 - soon Content Distribution Network • Cheap, scalable hosting - Linux and Windows, Oracle and SQL Server • Leveraging stable, high-availability, scalable infrastructure

Further reading: • Amazon Web Services: http://aws.amazon.com/ • Google App Engine: http://code.google.com/appengine/ Web Services App Engine

Further reading: • Amazon Web Services: http://aws.amazon.com/ • Google App Engine: http://code.google.com/appengine/ Recommended reading: • Clay Shirky - “Here comes everybody”: http://tr.im/9dt • David Weinberger - “Everything is miscellaneous”: http://tinyurl.com/2zpeqz • Chris Anderson - “The long tail”: http://tinyurl.com/2aug85 • Joshua Porter - “Designing for the social web”: http://tr.im/c1y Questions & discussion

This presentation and associated notes are available at: http://zum.io/cpa-nsw-08

Image: Charles Chan @ http://ﬂickr.com/photos/charles_chan/544022867/ © 2008 Zumio. Uncredited photos licensed for use through iStockphoto - please respect the rights of the copyright holders by not reproducing without permission.