connecting*the*dots

Peter Merholz has been on a philosophical bend regarding the continued development of Web 2.0 and the role of business for a few months now, and I’m pretty much in agreement with most of his assertions.

Changing a large, old school domain’s approach to interactive product development — specifically, in the Web 2.0 arena — doesn’t occur solely through the availability of smart engineers armed with APIs, feeds and Ajax alone. Unless the business has evolved its underlying approach and culture to facilitate this paradigm shift, the resulting efforts will be futile, or to quote Peter, “they’ll fuck it up.”

The powers that be must believe in and back the philosophy behind the technology.

So when it comes to business — I mean straight up, hardcore, numbers driven business — philosophy better equate with an explicit road-map to profit, otherwise we’re not talking business, we’re talking charity. More succinctly put, corporations won’t structure their annual and long-term corporate initiatives around Web 2.0 “open” principles and the investment in the underlying technology if they don’t explicitly understand how and why it will positively affect both their brand position in the market and the bottom line — both now and into the foreseeable future.

Now, I don’t hold a MBA from Wharton, so my ability to speak to the nuances of business is somewhat limited, but I did have the opportunity to spend the last three-years of my life within the walls of a conservative corporation. During my time there, it was extremely difficult to espouse any degree of change to their approach to design, development and serving their clients without raising agenda sniffing eyebrows — even when only attempting to sell the basic concept of listening to your own users when designing user experiences.

That concept alone took years to gain traction.

So while change within the Earth’s environment is as natural as a sunrise, within traditional businesses the mechanisms that foster change often signifies a threat to both the corporate strategy and the management team alike. One cannot move into traditional areas of business looking to flip long standing product development paradigms and revenue models overnight.

A recent Economist article ("Yahoo’s personality crisis") suggests that there’s a schism developing in the Yahoo! strategic and brand position, while Google is poised to sprint light years ahead. Peter’s latest post," Yahoo!: Walled Garden or Commons," tacks onto that perspective, suggesting that Yahoo!’s internal tugging between an open and closed  web philosophy, and their imminent plans to open a Hollywood office, could become a mission critical issue if not paid proper attention. The Economist even went as far as comparing present day Yahoo! to AOL from back in the days of the first web revolution.

AOL?

If we were talking about Bob Davis and Lycos, I’d have to agree, but we’re talking about Yahoo!, a company that has always been forward thinking, willing to tackle any attribute of traditional media and turn it on it’s head to make it useful on-line. With their soon-to-be-expansion into the mainstream media bastion of Hollywood, Yahoo!, for better or for worse, continues to operate as a change agent in the information age.

Simultaneous focus on open and closed aspects of the web is a solid business approach

Yahoo! has been at this web thing for more than 154 years now (posthumous math courtesy of Dick Sabot). In that time they’ve established a huge member base around the world, while designing a majority of their domain to be accessible to non-members with zero usage fees. A person can use most of Yahoo! without ever spending a dime until coming across a service with direct, fee-based competition already in the market. This holistic business model may seem passe by today’s standards, but that’s only because Yahoo! set the benchmark years ago; they were the early adopters of such an open business philosophy on the web.

This approach has provided Yahoo! with the means to both create and promote very precise revenue streams, leveraging the continuously growing reach of their membership and platform. Simultaneously, their focus on a variety of forward thinking, open tactical initiatives, such as flickr, 360, News, Music, etc. continues to move their domain forward with the best practices of the medium.

To the naked eye, this overarching strategy hints to be a metaphorical form of iterative change management, but not on the project or Yahoo! domain level, though; it’s more like change management for entering untapped external markets and media industries. In other words, Yahoo! seems to make closed moves (i.e. extending its domain by dealing with old school industries) in order to tap and evolve an established sector into a more open and web-centric format.

So does that make cents, compared to Google’s approach? Let’s see…

Google is also made-up of a brilliant group of people, creating forward-thinking user interfaces and search retrieval algorithms, but where Google’s daily operations differ from Yahoo! is their position in the market.

Their underlying funding relies almost solely on revenue established from their AdSense program and by floating company shares into a market that has provided a whopping market evaluation, based primarily on growth potential. So who really has the edge to last, riding through and continue contributing to the infrastructure of Web 2.0?

They both do.

Yahoo! has a consistent, upwardly moving market cap SMA since the bubble burst, whereas Google is on a meteoric rise post-dotcom crash. How much do you think the assertions of this chart tie directly into the two company’s strategic approaches to extending market reach? What about their commitment to open forms of Web 2.0 development? To the non-economist (that would be me) it would seem that each company has it’s own DNA to deal with and make decisions accordingly.

• Yahoo! took its bruises, but made it through the bust and learned their business lessons
• Google’s people felt the crash, but missed it all together as a company with a bottom line and shareholder’s interests to protect, so they’re more aggressive
• Yahoo! has more than a decades worth of experience, so they operate like a surgeon
• Google swings wildly at product opportunities with brilliant, broad strokes and precise algorithms to quickly iterate change

Basically, there’s room for multiple approaches to paving and extending Web 2.0.

Crafting an interactive world, one industry at a time

Take a moment to think about your life before Yahoo! took off. Ten years ago, the average American received their daily news through a newspaper and/or a TV broadcast. Due to Yahoo!’s revolutionary efforts to establish News aggregation for the public, I can barely remember the last time I read the newspaper during the week. Yahoo! forever altered that paradigm, shifting me and countless others in front of their screen for a news upload each morning.

Since Yahoo! News launched, Google raised the bar by expanding indexed sources to include international and local perspectives, while recent feed services like Rojo have cropped up, pushing the information boundaries into gourmet concept feeds.

Yahoo! set all of this in motion and continues to play a major role in how a large number of people (members or not) receive a variety of news items at their fingertips. By iterating the open, tactical aspects of their holistic user experience (i.e. feed widgets, top mailed articles, reviews of articles, etc.) while adding content (i.e. specific opinion blogs such as the HuffingtonPost.com), Yahoo! innovates by keeping one foot in the tactical realm of Web 2.0, with the other firmly planted in the strategic realm of the business philosophy.

It takes two feet to walk the walk.

As DeWitt Clinton has recognized, Web 2.0 is also about working together to reach a common goal across company lines. Forget the feeds and the tagging and the asynchronous display of data; collaboration between progressively run web firms is the biggest open paradigm shift one can imagine. Could this concept of collaboration and strategic balance be something that Yahoo! — a former Google-type firm which did experience the market correction of all market corrections in the bust of 2001 — has mandated itself to follow? Maybe it’s not schizophrenic to play both sides of the Web 2.0 fence; maybe it’s a solid business model.

With their historical record of successful brand extension — creating and/or acquiring useful, engaging experiences to change actual industries (i.e. News, Finance, Jobs, etc.) — I wouldn’t bet against Yahoo! in convincing Hollywood, through either the front or backdoor, to operate in a fashion that is more open than not.

Will the geek-to-media employee ratio be higher in the Valley than in Santa Monica? Sure. When in Rome, hire Romans, but so what? 154 years of Internet experience isn’t going to be thrown out the window because a handful of media executives are brought on-board. Will the output of this venture be as revolutionary as Yahoo! News or Finance? That’s left to be seen, but with Yahoo!’s track record, why be pessimistic?

Yahoo! espouses the tactical and philosophical pillars of Web 2.0, yet also understands business and how to engage in change. They’re no AOL.

UPDATE: AOL bought Weblogs, Inc. Let’s see how long it takes them to assert full control.

When I checked my mail the other day and saw a note from Ethan Zuckerman, a smile instantly came to my face. While at Tripod, Ethan radiated a whirlwind of energy and smart ideas constantly spilling out of his large frame and bare feet. Ethan was, and still is, good people. And then I read the email.

Dick Sabot, Ethan’s mentor and my indirect benefactor (without Dick, Tripod would never have been born), had passed suddenly due to a heart attack. My heart dropped a few inches in my chest. While I can’t say I had the pleasure to work closely or develop a strong personal relationship with Dick, the man was inspiring on numerous levels.

More than anything, I remember Dick as a generous person. I can’t tell you how many times he opened his Oblong Road home to "the kids" of Tripod (we were all 20 - 35 years old, living and working in a 3,000 person town with a limited social scene), throwing pool parties and backyard barbeques. And while Dick was refined, he was also extremely laid back. I like to remember him standing poolside donning his casual afternoon attire, enjoying a refreshing drink while two 28 year-old developers chased each other in dripping wet swimsuits, just missing knocking him and his non-Tripod guests over. The non-Tripod folks’ expression dipped for a few seconds; Dick just smiled and continue his conversation.

This weekend, a bunch of ex-Tripoders are migrating up to Williamstown to pay their respects, sampling a tasting of Cricket Creek Cheese, Dick’s most recent entrepreneurial project, and holding a gathering in the muddy fields of a nearby meadow. While Tripod will be remembered by outsiders as the first homepage building and community service, this weekend is an example of the real community aspect of my Tripod experience.

My condolences to the Sabot family; blood and otherwise.

Back in 1999, I found myself living in the northwestern corner of Massachusetts, working in an area tagged as Silicon Village. Yeah, it was a little premature, just like it’s cousin Silicon Forest in Portland and it’s big brother, Silicon Alley in NYC, but the dot-com era was booming and the entrepreneurial spirit had caught both Williamstown and North Adams square in the heart.

(originally uploaded by Original Sin)

It was an exciting time.

Tripod (the company I joined) had just been purchased by Lycos (or as the long-timers liked to refer to them; the Death Star) for more than $50 million dollars. The young, personal web site building company and online community had made it to the big time; now one more trophy brand in Bob Davis‘ portal empire.

But Tripod didn’t start off as a personal publishing website; they flicked on the converted cable factory lights with the intent to provide advice for college students and post-graduates in print and on the internet, while the resume engine and online community all came later. DeWitt Clinton, a Williams student and Tripod programming intern in 1996 tells it like this:

“In the beginning — and this tension carried on for years — Tripod was a content company that just happened to use the Internet. (Recall that they also had a magazine and a book published.) Thanks to some clever people like Jeff Vander Clute and Nate Kurz, a few useful ‘Tools For Life’ such as the Resume Builder, were built. These applications were an interesting synthesis of ideas from the designer(s), editors and programmers.

I would definitely say that Bo was in a position of watching what everyone came up with, rather than intentionally leading them there, saying as much in his recent book. The homepage builder was just one of these organic and surprising inventions.”

So what happened? How did the tipping point occur within Tripod itself? When did management decide to move forward and focus on personal publishing and online communities? DeWitt adds more color from an outside, post-acquisition perspective:

“The traffic generated by the home pages earned them an acquisition, not the editorial content. See the Geocities acquisition just a few months later for evidence.”

Bo Peabody, Dick Sabot and Ethan Zuckerman hired some super smart developers to get their original concepts online. They built the first online resume engine and created a place for community to form the first iteration of Tripod.com. But a crazy thing was happening — people weren’t using their product the way they had envisioned. People were more intent on building their own web pages with the resume builder.

Damn these people!

Bo and company had a choice to make; either stick to their origin vision or evolve to support the needs and desires of their members, moving Tripod towards focusing on homepage building tools.

They made the only choice they could.

In 1997, before revenue models other than advertising came to fruition, stickiness determined the value of most companies. Bo and Dick saw the synthesis of member desires and a business opportunity, usefulness and viability.

It was a no brainer.

The Lycos Years

By the time I came on board, Bob Davis had just scooped up Tripod and Bo was serving his commitment to Lycos, wandering the halls at odd hours.

“Corporate refocus” was quickening its pace.

The first driver I encountered was the order to cut out community all together and focus solely on developing a suite of personal publishing tools. Actually, that became the name of our group within the Lycos domain: Personal Publishing.

The move ostracized many of the original Tripod folk who had joined the company because of the possibilities of online community, as well as a bunch of members that chose Tripod for similar reasons. But the numbers proved that people wanted to build their own web sites, so the machine spit out its orders and rolled on.

My first project was to visualize the current experience in a tangible format, so we could determine where we were going to snip and cut sections and features. After putting together a precise map of page sequencing and explicit sections, I walked into the office of my design director (former Tripod lead designer, Dave Reid) to get his opinion. The direction given to him was crystal clear, so he studied my map for a few seconds, found where the “build” and “community” sections bordered one another, and proceeded to literally rip the map in half on that line.

No questions asked; no questions necessary. That was how the Death Star operated.

It took me about a year into my stint at Tripod/Lycos to really start to question the direction of the group. I mean, the projects I was being assigned to were superfluous at best, such as creating Hello Kitty skins for the Angelfire publishing tool UI.

It felt like the powers-that-be had run out of useful ideas, so they just wanted their paid bodies in motion, any motion, as long as we were being productive.

That’s when I began wondering what would’ve happened at Tripod if they hadn’t been sold to Lycos; if the smart people were still “in charge,” still listening to their members, still innovating based on where they came from and an evolving vision of where to go.

Maybe Technorati would be serving the world of “Tripoders” today, rather than “Bloggers”…

As things would have it, Lycos closed up the Silicon Village web factory to prepare for the Terra merger. I wanted no part of working inside of the Death Star in Waltham, Mass, so I moved down to Brooklyn and picked up a dotcom consulting gig.

It wasn’t the best move, but it was better than Hello Kitty.

Jeff Veen’s post the other day regarding the genesis of flickr placed me in this Silicon Village time capsule. His description of their roots reminded me about choices and their consequences — good, bad or indifferent.

There’s no “right way” to create a viable, useful product; no methodology that is absolutely sound or fool proof. The best you can hope for — as Bo so eloquently points out in Lucky or Smart?– is that if you subjugate your ego often enough, and live your life accordingly, options will be presented to you in a manner that you can act upon with intelligence, vigor and respect.

That advise should be the first amendment for both creating useful products and collaborating with smart people, as in both cases, consistently relying on ones self-referential perspective is rarely ever a spot on decision.

Viva la flickr! Viva la Tripod! No game, no resume… no problem.