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The New New Thing

Last week Jeff Nolan wrote a post entitled Incrementalism and “The New New Thing” where he bemoans the lack of true innovation and the state of venture capital generally. He is talking about Silicon Valley, but what he writes applies equally over here in Europe.

He correctly observes that a lot of money is still flowing into startups, and that too many of them only offer incremental improvements on what already exists. He is on the money with the belief that incremental innovation is rarely a sufficient foundation for a big new business. In his own words:

As I survey the landscape of consumer- and business- focused software and  service providers I am struck by how much incrementalism there is at the moment. Something like Twitter is ground breaking in terms of breakout adoption, but what about the other 10,000 startups? There are few bold “aha” ideas, lot’s of social “-this or -that”, and mostly a bunch of companies hoping to draft on the perceived success of a few gorillas. Will we suffer through yet another “Year of the Mobile Web” or “Year of the Semantic Web”?

He then goes on to draw a couple of conclusions I don’t share. First:

What is coming to a close is the notion that all online services need to be free and paid for with advertising; there are too many startups that are dependent on a business model that has yet to prove itself for tech companies.

I agree that there are many web businesses with advertising models that will fail, and probably more of them than we had when semiconductors or enterprise software were the big investment themes, but that is because barriers to entry are really low. It costs next to nothing to get a web business started and it is getting cheaper by the day.

So the higher than normal number of startups doesn’t cause me to fret about the health of the ecosystem. Nor would I say we are reaching the end of the line for ‘ad-supported’ as a business model. Online advertising is still growing at double digit rates, and whilst innovation in that market is required I think it will continue to thrive, and the best web businesses will succeed on the back of it. (Although I also expect that innovation in business models will become more important as the trend towards free accelerates.)

Second:

What’s frightening is the inability to answer the basic question “What’s next?” The Valley thrives on “The New New Thing” (possibly one of the most poignantly titled books ever) and with every turn of a generation, there is an awkward moment where we’re just figuring out where we’ve been but have yet to see
where we are going… Right now is that moment.

Knowing what is coming next is always a difficult business, but I am more sanguine than Jeff on this point. When I read the paragraph above I asked myself what it was that excited me at the moment and the answers all had the common theme of entertainment. Regular readers of this blog will know I am into virtual worlds, social games, music and online TV. All of these areas are about delivering new or enhanced forms of entertainment via the web.

That is the path I think we are headed down at the moment, and we are still nearer the start than the end.

  • http://blog.mjelly.com jamescoops

    Surely the next big wave(s) will be web 2.0 moving beyond entertainment into new areas like health, government, education, B2B, international trade, manufacturing, development etc?

  • http://www.trendcatching.com jamescoops

    Surely the next big wave(s) will be web 2.0 moving beyond entertainment into new areas like health, government, education, B2B, international trade, manufacturing, development etc?

  • http://www.broadstuff.com alan p

    I’d agree with you on the B2C side, Nick – I picked up on the same articles’s Enterprise thoughts – mine here:

    http://broadstuff.com/archives/893-The-problem-with-Enterprise-2.0….html

    I’d be interested in your take

  • http://www.broadstuff.com alan p

    I’d agree with you on the B2C side, Nick – I picked up on the same articles’s Enterprise thoughts – mine here:

    http://broadstuff.com/archives/893-The-problem-with-Enterprise-2.0….html

    I’d be interested in your take

  • http://voicesage.blogspot.com PaulSweeney

    Again, I am reminded of Umair’s point: solve something socially meaningful and you will reap the just rewards. The second point I’d like to make, is that “the net” hasn’t really reached into devices, and between devices. We are in the early stages of the the People As Network, but this will be augmented by the Objects As Network. Sounds hi-filluten, but hey, your phone, your car, your house, your office all linked to social and physical infrastructure could make dramatic differences. The Irish Health service just rolled out a Web2.0 infrastructure (http://www.enn.ie/article/10124268.html) The old “top down approach” cost a fortune and failed (http://www.siliconrepublic.com/news/news.nv?storyid=single10827)

  • http://voicesage.blogspot.com PaulSweeney

    Again, I am reminded of Umair’s point: solve something socially meaningful and you will reap the just rewards. The second point I’d like to make, is that “the net” hasn’t really reached into devices, and between devices. We are in the early stages of the the People As Network, but this will be augmented by the Objects As Network. Sounds hi-filluten, but hey, your phone, your car, your house, your office all linked to social and physical infrastructure could make dramatic differences. The Irish Health service just rolled out a Web2.0 infrastructure (http://www.enn.ie/article/10124268.html) The old “top down approach” cost a fortune and failed (http://www.siliconrepublic.com/news/news.nv?storyid=single10827)

  • nic

    Thanks guys.

    James – you are right, ‘enterprise2.0′ is also interesting, although I’m not sure how quickly the verticals you mention will adopt social software and all that comes with it. I’m definitely on the look out for startups in this space though, and http://www.huddle.net is one of my favourites here in the UK.

    Paul – I also agree with you. In the post I focused on the value to consumers – entertainment, but the technology drivers are networks, devices and the new ability to make services social. All very exciting.

  • nic

    Thanks guys.

    James – you are right, ‘enterprise2.0′ is also interesting, although I’m not sure how quickly the verticals you mention will adopt social software and all that comes with it. I’m definitely on the look out for startups in this space though, and http://www.huddle.net is one of my favourites here in the UK.

    Paul – I also agree with you. In the post I focused on the value to consumers – entertainment, but the technology drivers are networks, devices and the new ability to make services social. All very exciting.

  • http://blog.mjelly.com jamescoops

    bubblegen/ umair points to Megastudy in Korea as an example of what to expect as 2.0 moves into other areas. Surely only a matter of time before someone does something similar in the West.

  • http://www.trendcatching.com jamescoops

    bubblegen/ umair points to Megastudy in Korea as an example of what to expect as 2.0 moves into other areas. Surely only a matter of time before someone does something similar in the West.

  • Martin Owen

    Education and research community apps that fill these niches have been around for some time:
    FirstClass is an excellent example – the functionality exceeds most things that Huddle or similar and has been around since 1990. BSCW (basic support for collaborative work) has also offered this functionality for “free” since about 1996……
    Moodle – and OpenSource project – is very popular.

    Even Lotus Notes had its fans as a collaborative system.

  • Martin Owen

    Education and research community apps that fill these niches have been around for some time:
    FirstClass is an excellent example – the functionality exceeds most things that Huddle or similar and has been around since 1990. BSCW (basic support for collaborative work) has also offered this functionality for “free” since about 1996……
    Moodle – and OpenSource project – is very popular.

    Even Lotus Notes had its fans as a collaborative system.

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