The backlash against "Web 2.0" has been underway for some time now, with many very insightful analysts and reporters pointing out the surplus of overlapping products, the uncertain business models, and the relentless hype. I think many of those critiques are right on -- a lot of the Web 2.0 companies are pointless and won't ever make money. Maybe even most of them.
But that's not the whole story. When you step back from the individual trees and look at the forest, I think the things happening in web apps today are really and truly revolutionary. If anything, the changes are a lot more profound than most people realize. And I believe they're just getting started.
As I've mentioned in other posts, the Web isn't just a place for publishing content, it's also rapidly maturing as a platform for developing new software applications. (Quick definition: in Silicon Valley-speak, a platform is a technology on top of which people build other products. Windows is a platform, as is Linux.) To me, the most important thing about the Web 2.0 sites is that they blur the distinctions between web pages and applications. Most of them don't just present information, they also let you create or manipulate it, as would a software program on your PC. Google Maps isn't just a website, it's an application for searching maps. Ten years ago, you would have bought it on a CD-ROM and installed it on your PC.
Participating in the blossoming of a new software platform is one of the most exciting things you can do in the tech industry. I've been lucky enough to be in on it twice now (Macintosh and Palm OS), and it's great because you get to work with a lot of smart developers who produce cool and surprising stuff. The excitement is infectious (thus the hype about Web 2.0).
But despite the attention people put on platforms, the way a new platform develops is not well understood in the tech industry. I think that's why people are getting confused about the fate of the Web 2.0 companies.
For example, here's a quiz -- do you know what the following names have in common? (No fair using Wikipedia; you have to do this on your own.)
If you said they're some of the most prominent early software developers* for the Macintosh, you're half right. The other thing they all have in common is that they're long gone -- out of business, sold off, or just plain faded away. In fact, other than Adobe and Microsoft, virtually none of the prominent early Mac developers are still independent businesses.
The melancholy fact is that the vast majority of the early developers on any platform fail.
This carnage of the early developers happens because a new platform is by definition unexplored territory. The developers are basically trying a series of experiments to see which types of applications will sell well. Their hit rate is better than playing the lottery, which is why VCs are willing to fund them, but inevitably most of the experiments fail.
That doesn't make the platform a failure, and it doesn't mean the applications were a waste. The successful experiments make a ton of money, more than enough to make up for the failures. And even the applications that don't survive long term often teach us new concepts and business models.
I think the same sort of shakeout is going to happen with the current crop of web apps. Most of them will eventually die or get merged into other things. That's no big deal, it's how a platform works. What matters is what we're learning through this Darwinian process. And from that viewpoint, the Web applications world is shaping up as a stunning success.
I think the three most important developments we're seeing in the web apps world are:
1. We're learning how to create new communities rapidly and focus them on useful tasks.
2. The Web is spawning new forms of media at an unprecedented rate.
3. The Web apps platform is starting to evolve exponentially.
I know the Web apps world is overhyped, so I say this very carefully and very sincerely: I think any one of those trends would be enough to drive major changes in the tech industry and the world beyond. The fact that all three are happening at once is, to me, quite remarkable, and I think it's going to have an enormous effect on our lives in the next 20 years.
I want to talk about each one of the trends, and then wrap up with some comments on overall implications and what to watch for next. Unfortunately, this post started to get waaay too long, so I'm going to do it in stages. I'll start with communities in the next post.
In the meantime, here's an example of what happens when somebody starts to sense what's happening in web apps. This is from Mike Rowehl, a software developer in the mobile phone industry, commenting on what he saw at the 3GSM telephony conference in February 2007:
"I was forced to realize that the mobile world won’t end up changing the online world like I had assumed it would. It really looks like the innovation is going to flow the other way around. People who are already working in mobile have had all semblance of initiative and innovation beaten out of them. You can lay a new business model down in front of them and explain in detail how it works, and generally they aren’t able to grasp it unless it looks enough like something they already know. However, people coming from the online world and looking to expand into mobile generally are accustomed to a shifting environment and taking in new opportunities and integrating them into their mental framework.... The stage should be set for mobile to completely subsume the online world. But instead it’s the people from the online world staggering out into the sun and realizing there’s no one trying to grab the potential of the new medium and just picking up the pieces waiting for them."
Mike, you ain't seen nothing yet.
*Here's a key to those old Mac developers. Even though the firms and most of the products disappeared, many of the product concepts, and the people, went on to great success. I expect the same thing to happen in web apps.
Cricket Software. Creator of a series of Mac graphics programs, including Cricket Graph, Cricket Draw, and Cricket Presents (one of the first presentation programs -- a category that Apple called "Desktop Presentations" in an effort to duplicate the desktop publishing phenomenon). Cricket was run by Jim Rafferty, a really nice guy who went on to found and co-found several other companies. I couldn't figure out what he's doing now; please post a comment if you know.
Paladin Software was creator of Crunch, a Macintosh spreadsheet program that went head to head with Excel and lost. I thought Crunch was much easier to use than Excel, with an innovative icon bar for commonly used functions. Microsoft kind of borrowed that feature later (check the screenshots here).
Aldus. Creator of PageMaker. Adobe gets the credit today for driving desktop publishing, but PageMaker was the greatest page layout product of its time, easy to use and very powerful. I believe it was the program most responsible for making the Mac a commercial success. Aldus was run by Paul Brainerd, an extremely nice guy who told his company to respond to requests from small software developers like me. Thanks, Paul! He's now a philanthropist.
Ann Arbor Softworks developed FullWrite, which claimed to be the first fully WYSIWYG word processor, and which was also one of the most notoriously prolonged instances of vaporware in computing history.
T/Maker was one of the early developers of Macintosh desktop publishing software. Heidi Roizen, CEO of the company during its Macintosh days, was a deeply respected Macintosh software entrepreneur, and later became VP of the developer relations team at Apple. She's now a venture capitalist.
Living Videotext. Produced the ThinkTank and More outliners. Run by a guy named Dave Winer. And yeah, he was just as outspoken back then.
Silicon Beach Software. Mention "Silicon Beach" to an old-time Mac user and they'll probably just sigh. The company was responsible for many of the most creative Mac programs of its time, including a game called Dark Castle and SuperCard, an early hypertext development environment that extended Apple's HyperCard in wonderful ways. Some Silicon Beach veterans later founded Back to the Beach Software, whose name is a tribute to Silicon Beach.