It's interesting to watch the hype around Web 2.0 increasingly crystallize from a general perception of marketing mirage and investor snake oil to the many valuable concepts that are actually represented by the term. One of the best examples of this is Jason Fried's fascinating new survey of 500 random Basecamp users, asking them what they think Web 2.0 is. A mere 13% had never heard of it and some of the answers are not only extremely good but the overall depth of knowledge is impressive. Perhaps it's just the quality of 37signals users, but I suspect 500 people represents a reasonably broad sample of online people. In fact, the survey itself is pretty much Web 2.0 collective intelligence in action, if fairly unstructured.
Our next stop is TechCrunch's Michael Arrington and his excellent new 24 minute Web 2.0 documentary that asks very astute questions about what really seems to be changing on the Web (and sure, Web 2.0 represents networked applications based on architectures of participation, but we've had those before; it's the way we've all started to use the Web for forming personal relationships and sharing our content, right?) In any case, Mike does a great job asking the leaders of Web 2.0 companies about business models, user generated content, and much more.
And speaking of business models, Google itself is muscling in and both skimming off and monetizing the now-galactic presence of tens of millions of Web 2.0 users in MySpace, YouTube, and Digg. This starts to point to some overarching strategies for making Web 2.0 business models successful that we'll explore in a moment.
But, like it's been just about from the beginning, it's Tim O'Reilly that continually provides the raw blueprints for what happening with Web 2.0. In one of his recent posts ("Levels of the Game: The Hierarchy of Web 2.0 Applications"), he not only clearly articulates the different levels of Web 2.0 software; he zeroes in again on what makes the enormous numbers of roving Web users out there "glom" onto these sites. All you have to do is "embrace the network, to understand what creates network effects, and then to harness them in everything you do."
Unfortunately, a tome the size of blogosphere could be (and one could claim has been) written about the concepts in that sentence. It's akin to the infamous phrase about explicating the design of an advanced system by writing "insert magic here." The upshot being that it's far from a commonplace skill to balance the forces in an architecture of participation and generate YouTube style results. And though civilization advances when things that were formerly possible for only a few rarified experts to do are then made easy for everyone, the same will be said of Web 2.0 software in a few years. For now however, we're lacking concrete specifics on how to leverage network effects and feedback loops in our software, online communities, Web sites, and even our IT systems.
In this vein, and somewhat similar to my popular Sixteen Ways to Think in Web 2.0 (which I'm itching to update), here is a rudimentary take on how to harness network effects in Web 2.0 applications.
Seven Ways to Explicitly Trigger Network Effects
- Network Enable Your Application. This might seem obvious but it's a critical prerequisite and has more than the surface potential for creating interesting new applications outside of pure Web plays. For example, a Web 2.0 application does NOT have to be Web-based, but should be able to at least connect to the Internet. iTunes is an excellent example of Web 2.0 outside of the browser, but even mobile phones and text messages, made better ala TWTTR, shows the potential to think outside the box when it comes to thinking about a network.
- Enable Data Sharing and Data Defaults. A big part of harnessing collective intelligence via Web 2.0 techniques is by making the experiences of tertiary users in a given situation easier and smarter. By this I mean when a user does something using the Web 2.0 application, that information should contextually improve that situation for the next user that comes along. I often cite del.icio.us/popular as a great example of leveraging the work that the Web users that came immediately before you are making your upcoming experience that much better (less searching for new and relevant content.) More specifically this could mean expert guidance in completing online forms, improving shopping recommendations, collaborative spam filtering, and much more. Capturing information from your users and making it available to others (without violating privacy of course) is a key "plank" of Web 2.0.
- Linkify Everything In Your Web 2.0 App. And I mean everything. The hyperlink is one of the most powerful mechanisms existing for triggering network effects. It's how users show up to your site in the first place and everything else thereafter. A hyperlink structure must be how the information on your site is organized, shared, bookmarked, e-mail, IM'd, etc. Granular URLs are the key here. A site should have a URL structure that has clear axes for its URL segments (the things between the slashes in a link) to navigate through a user's information, the shared folksonomy etc. Something like site/user/tags/xxxx is a classic example but there should be many interesting (and user-defined) paths to get to the same information. Once available via links, the knowledge of the page, data, or minicommunity to which the link navigates can propagate with amazing -- even alarming -- speed. And propagation over the network is the name of the game when it comes to network effects. If that link contains something people want to share, they will e-mail the link to a group of friends, who will IM it to more friends, who will put the links in their blogs, and so on. Pretty soon everyone is involved and you're buying bandwidth upgrades in bulk quantities. The Message: Consistently think in and design in hyperlinks.
- Syndicate Your Content: It's unclear in my mind how powerful this truly is, but the blogosphere is proof that it can be quite potent. Furthermore, it greatly increases the discoverability of whatever content is on your site. You should support RSS at least, but probably Atom as well. Other people have written more authoritatively about this than I do here but it's an important checklist item.
- Turn Your Application Into a Platform: Encouraging unintended uses by others is practically de rigueur now and every good Web 2.0 site seems to have an open Web API these days. But what's important it in this context is that it leverages network effects on an entirely new meta level. Not only is your site using its own traffic to generate more traffic and create more connections on the network/between people, but so are tens or even hundreds of other sites. They can use your API to add your site's content and functionality to theirs (and hence their feedback ecosystem to yours). And they might leverage network effects a whole lot better than you for a variety of reasons (better design, more funding, cooler crowd, what have you.) Warning: Make sure your APIs are designed to leverage your social architecture or you might not get the desired result, just parasitic use.
- Open Up Inside Your Site: Like MySpace allowed for a while with YouTube, let others host content, Javascript badges, widgets, feeds, or what-have-you on your site in the areas that belong to your users. Not only does this have the useful side effect of instilling a sense of creation and ownership in your users, but it allows you to leverage the network effects of other sites. This makes the content on your site aggregate the best content of other sites creating second order effects that can make your site cumulatively more valuable by building synergy, a new-agey but accurate term that means that the sum is greater than the parts.
- Build a Viral Social Architecture. Sounds fancy and difficult but it's mostly not. At its most basic, you just make sure that it's extremely easy for users to invite their friends, family, and colleagues to visit the site. Example: The end of each YouTube video lets you share it with others via e-mail. There's a lot more to this however and I intend to write it about it soon, but just remember that building good social architectures of participation is one of the core techniques for those interested in serious results.
And there are many other ways to trigger network effects, these are just some of them. But as long as it causes your service to have more intrinsic value to be connected to another node on the network (Internet, Intranet, or otherwise), that's enough.
What other ways do you know of to take advantage of network effects in online software?
For those who haven't been tracking it, The Long Tail essentially describes the mass servicing of micromarkets, which is primarily made possible, even cost effective, by the delivery system of the Web itself. This is what the subtitle of the book puts another way as Why The Future of Business is Selling Less of More. And it's not some obscure buzzword, I've found The Long Tail to be an indispensable short hand in describing certain concepts and trends we see emerging in business and the Web these days. For example, I've described Amazon's innovative Mechanical Turk as a yet another one of their brilliant "long tail" plays. So too how The Long Tail of enterprise software demand is finally being tapped using Web 2.0 technologies to cost effectively serve previously underserved portions of the enterprise which couldn't previously justify the the expense, most notably in articles on ZDNet and here.
YouTube has been getting a lot of press lately, both for its runaway success as well as for the real sources of its vast video library. Rated as a top 20 destination on the Web, YouTube serves up at least a whopping 70 million videos a day to its users and also has over 60,000 new videos uploaded every 24 hours. Founded by former Paypalers Steve Chen and Chad Hurley, YouTube is about as classic a Web 2.0 play as you could describe: Not only does it harness the collective intelligence of the Web, a charming if slightly obtuse turn of phrase Tim O'Reilly uses to describe the core of the Web's next generation, YouTube is also a relatively open platform for video sharing. They make it possible for anyone to share YouTube's videos just about anywhere else on the Web.
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