Archive for December, 2009
What Is The Internet For?
I liked Chris Dixon’s post on “Search and the Social Graph” because it seemed to reflect some of the same sentiments that I talk about when I talk about strategy. I suppose this likely means that my insights are not so revelatory. I’m okay with that.
The point I take from Chris’s post, which he also discussed when he talks about how it’s better to build a demo than it is to build a powerpoint, is that people talk about thematic web concepts like your social graph slowly replacing Google and search as the mechanism through people navigate the web. That is, links in Twitter and Facebook are more powerful drivers of web traffic, over time, than paid search results on the side of your Google search results page.
The thing I like about Chris’s post is mostly this sentence:
Searches related to news, blog posts, funny videos, etc. are mostly a loss leaders for Google. Google’s real business is selling ads for plane tickets, dvd players, and malpractice lawyers.
What a clarifying, and therefore powerful, statement. You see, all these people talk about the Internet so abstractly. And that abstraction clouds everyone’s vision on reality. And, for businesses, reality is about what people are willing to pay for, repeatedly.
As Chris highlights, the social graph doesn’t seem to really drive, at least not on scale, revenue to companies that make things. And that’s because most of what people trade links about are videos, songs, and news articles. And those news articles are actually funded by adjacency advertising, not dissimilar to paid search. And that doesn’t even work so well.
The problem that, I think, entrepreneurs and VCs need to spend more time discussing and focusing on is less abstract and more tactical. It’s not about the “social graph” per se. Nor is it about “the real-time web”. Nor is it about “semantic search”. The problem is how to figure out what people pay for. If it’s an advertising-driven business model, then you need to be generating actions for your marketers and advertisers that ultimately help them sell stuff. If it’s a direct sales business model, you need to figure out how to get people to open up their wallets, take out their credit cards, and spend some money.
Friends, I know I’m being somewhat glib. But that is basically the end of the story.
If your business doesn’t generate revenue. Then it’s not a business. By definition.
And the problem, as Chris points out, and as I see when I read and hear people talk about important issues like “the real-time web” is that people use the Web for some specific things and they take some very specific actions when they’re on the web. I don’t value the real-time web because the only thing I’ve ever needed “fairly recent” is market-driven information or the news. And I wouldn’t use Twitter to read the news because it’s a morass of crap. And I wouldn’t use Facebook to read the news. Nor would I really use Google. I still continue to use the New York Times, The Washington Post and maybe one or two other blogs.
So, for me, and for most people, the real-time web isn’t an actual problem that needed to be solved. I don’t care what a million people are gossiping about at any one moment. Or at least not in the format that Twitter presents.
Similarly with “semantic search”. I don’t need to structure really human-sounding questions to an AI platform so that it can read my mind. I understand how to use Google given the parameters already in place and I’m decently good at it and fairly pleased with the results. So “semantic search” doesn’t seem to be a real problem and certainly not one I’d pay for.
As we build the next generation of web tools and platforms, I think it behooves us to take a step down from the mountain sometimes, maybe to a peak slightly lower, and think about the actual needs of the people that use the Web, rather than invented constructs that are flimsy, abstract and esoteric. We need to build real businesses for problems that actually exist and that people will pay for.
Strategy Does Not Exist
Here’s something I think about business. I think that the word “strategy” gets over-used a lot and that, while there are choices that exist that might be construed as strategic in nature, it basically does not exist.
Business is about getting paid to solve problems for other people and make things easier for them. And to be able to do that, over time, easier and more efficiently so that you can get better and better at solving those specific problems and, therefore, can make more and more money.
The big game plan that you might call your “strategy” essentially boils down to your ability to figure out which problems to solve and then figure out how to solve them. Many people call that process “tactics”.
My experience is that strategy is really the aggregation of all your tactics.
And that your tactics are defined by your ability to listen to the marketplace, solve the problem that the market is telling you to solve, and course correct over time as you understand what’s working and not working. And typically your “strategy” is mostly just explaining what you’ve already done and why it worked, in retrospect, without actually conveying the ability to accurately predict the future, read the tea leaves and explain where you and your mates will be in 12 to 18 months.
Strategy, therefore, is mostly a backwards looking narrative to make yourself feel good.
I think the biggest strategic decision you can make, that is truly strategic, is picking your market. That’s something that’s not just about solving a tactical problem. That is, indeed, about making sure that you’re solving problems in an area where a) there is a real problem (not an invented one like “semantic search” or the” real-time web”) b) people have shown a willingness and ability to pay for solutions and c) the number of those people, for whatever reason, seems to be growing not shrinking. You pick the wrong combination of those factors (like starting a record label right now) and it will require either a radically new approach or you’ll fail.
But assuming you are picking an area where those factors align, that’s about as much strategy as you need. At least until your market stops growing.
The rest of strategy, in my opinion, is solving the problem right in front of you as often as possible.
On Tiger and Cultural Evolution
There’s not much more that needs to be said about Tiger Woods, and certainly not by me. It’s a strange thing, this fascination. Is his private life completely separate and apart from his professional life as a golfer? Or is there some expectation that, given his endorsements and his public persona, there is an implicit, if not a legal, right for the public to know and care about who he’s married to, who he sleeps with, etc. Hard to say. I can see both sides to be honest.
I think a different and equally interesting point, and one that I’ve thought about in the past, is whether there is a disconnect or a gap between the transparency of our lives, much of it powered by technology, and cultural expectations of public behavior, much of it remnant of an earlier time.
My expectation is that, over time, and with things like Twitter, Facebook, LinkedIn, etc. we will come to demand and expect something less than perfection from our public figures and from ourselves. Yes, it’s not a good idea to post a picture of yourself doing something illegal anywhere. And yes, you need to be careful and watch your words and your actions carefully.
But it seems somewhat unreasonable that we’re still being held to standards of behavior enacted when there was significantly less availability of public information and when social networking tools, and communication tools, hadn’t been developed or advanced.
It would seem that, as people are people and as they live their lives online, and as pictures of them at bachelor parties or other gatherings surface, that one day, and again, over time, it won’t be so shocking when we learn that our public figures are guilty of human behavior. And that we accept it with a bit more sophistication.
Of course, I’m not saying that Tiger running around with a harem of women and paying absolutely no mind to his marital vows is a good thing or anything I condone. I just wonder whether we’re in the midst of an expectation resetting where there becomes a tolerance for a lower standard of public behavior, based on tools like Facebook creating a more realistic expectation of what it means to be human.
Another way of putting it: You can say that, if you’re employed or have any type of third party obligation, you should very carefully monitor your entire public persona. You should hire firms to ensure that no piece of bad information ever surfaces about you on the web. You should not write a blog. You should not post an embarrassing status update on Twitter or Facebook when inebriated. You should either lead a perfect life or work diligently to scrub any public vestige of your imperfect life from existence. Never text. Never email. Be perfect or spend all your time hiding the fact that you’re not.
But on the other hand, at some point, aren’t we all going to have to face up to our real human nature? Rather than constantly seek out, like hyenas and vultures, tales of imperfection, stories of rises and stories of falls that nobody truly believes are, well, true?
Is the point that we shouldn’t live our lives in reality? Or is there a perhaps more empowering point that our cultural media will one day incorporate a more tolerant view, based on the real world? Or maybe this is all already happening and I’m just late to the game.
The Flying Change Live at Rockwood
On The Stage
There are two worlds: one that is on the stage and one that is not. It makes performance a strange and disorienting phenomenon. Because when you’re up on the stage, and you’re playing music with your friends and your good people, and in you’re in the midst of some kind of emotion. Well, it’s not that there’s nothing like that in the world. It’s more that there are very few things like that in the world. There is something whole and complete about that moment, as narcissistic and self-aggrandizing as that sounds.
Maybe it’s because the band is so big that the only time we’re all together as one huge collective is typically the night of the performance. Otherwise, it’s pockets of people for rehearsal and there’s always the notion that some kind of gratification or coherence is being delayed or forestalled.
Or maybe it’s simply because these are moments when, strangely, you can drop the artifice. When you’re on stage and in the midst of your song and you’re playing the music, there is no need for anything else. No silly conversation. No awkward social conventions. It can be a pure and honest thing and in concert and in league with all of your mates. And even in close symbiosis with the people in the audience. All part of something bigger and brighter and more alive than when we amble about it and bump into each other in the real world.
What Will People Pay For?
So we had the show last week and it went great. Tons of people there. An amazing energy. A bit of a buzz that seems to have trickled out to other places. All in all, it couldn’t have gone better.
And yet.
We had a person at the show explicitly to sell stuff and to get email addresses. He did a great job of the latter and not as well at the former. And I saw him trying and getting the word out so I don’t think it was a personal failing. I just think there is a gap these days in the music entertainment experience. The gap between someone willing to take in the music and enjoy themselves and then the further gap between getting out their wallet and shelling out some dough for a CD or a poster or something else.
I have been scratching my head on how to close that gap and I can’t seem to come to any conclusion. Theories, sure. Here are a few:
