Posted: February 6th, 2011 | Author: Kevin Lee | Filed under: Kev's Thoughts On... | Tags: AdAge, Agency, Business Model, China, community, connector, consultancy, digital disruption, Fast Company, future industry, Influence Industry, Insight Economy, market research, Marketers, Media, narrowcast, nuance, Planner, professional service, psfk, Scalability, Scalable, Sharism, specialist, tribal, Twitter | No Comments »
Reinvention is a constant that all businesses and industries go through. Ad Agencies, Media Agencies, Market Research Agencies and Management Consultancies are currently going through one such reinvention, and a dramatic one at that. These professional services help organizations interact and influence the end individual. They exist and thrive in what I call the Insight Economy.
The future for these kinds of companies are not very clear. Industry and organizational experimentation is happening in all areas. The successful new professional service will be one that accurately understands the nature and needs of the new industry environment.
The Pains of an Industry:
The Digital Disruption has made interacting with the individual exponentially more complex and nuanced. The plethora of new channels not only makes reaching a segmentation more difficult, but traditional segmentations are obsolete as individualized digital experiences are creating people with multi-faceted, multi-layered and unique identity points.
Digital has lowered barriers of entry to many industries and professional competition is on the rise in all domains. Tech companies are becoming media agencies, management consultancies are becoming digital agencies, and digital agencies are becoming traditional/creative agencies.
Competition is not only rising in the professional practices, but where it actually counts too: the ability to influence. Digital has enabled each connected individual to potentially be the king of their own domain, or the multiple domains in their sphere of influence. The open stream of consciousness that now exists means the work and influence offered by professional services is even more at risk of being belittled and relegated to irrelevance.
The ever-evolving nature of Digital means everyone, including those traditionally seen as ‘experts’, has fallen perpetually behind.
And so clients have lost confidence in the ability of these professional services to provide a reliable and appropriate return on investment. If the professional service’s influence on the end individual is diminished, if they don’t even know what would influence the end individual, and if they may not even have the capacity to learn what could influence the individual, why should clients pay?
What makes matters worse is that most professional services are still organized in large, lumbering, un-adaptive institutions that derive their revenues from over-charging on services that are fast becoming obsolete themselves.
In other words,
Its chaos out there
We’ve got our backs to the wall
And we don’t know what to do
So what is the most promising and versatile business model for the agencies and consultancies in the Insight Economy?
Formation & Scale:
1) Be Lean & Tactical, Modular in Growth
Lets take a page out of the geopolitics strategy playbook. Traditional military units are ineffective in engaging trans-border terrorist groups, but we’ve now created tactical military cells specially equipped to handle specific needs and objectives in specific circumstances in specific locales. Professional services need to be reformed the same way. No longer can we operate with large, generalist divisions. We need to live in small cells of tactical units; each designed to be the expert on a specific purpose, in a specific environment, in a specific localization. Only then can we be flexible and focused enough to stay on top of the learning curve, and adapt to evolving situations. It’s also cost-effective. Operating a smaller group means the unit can survive at a time when the work required becomes more piecemeal while still requiring a high state of intensity.
Lean and Focused doesn”t mean alone. Like terrorist cells or elite military units, professional services need to live in fluid integrated networks that work in tandem, coordinated to achieve one objective. Different units of the same expertise should be built in different localizations to master the nuances of the diverse geographies. Professional services should drop in and out of different situations, working with different partners, and solve different problems.
It”s the only way to operate in this influentially-fractionalized environment.
2) Be Upward+Downward Scalable
Fast Company recently published a fantastic article about advertising, and in it they described a company called Co, a 5-person consultancy that can draw upon a network of 44 multi-disciplinary partner agencies in the event they take on a project more than their 5-person team can handle. In this way they can scale up and down to precisely fit the project size. In addition, they can invite the right combination of talents together that fit the project scope.
Upwards+Downwards Scalability may not be the most job secure, but its more sustainable than the status quo. Clients and the work require greater and greater customization. If you cannot offer the exact solution, a competing team will. The industry can no longer afford or tolerate redundancies. Those that expected an advertising or media job to mean a steady paycheck should wake up. The future of this industry will look a lot more like the film-production industry, where everyone lives project by project.
Such frequent scaling may pose problems for quality control, but this is the challenge of the new professional service. Creating replicable guidelines, procedures and methodologies to ensure highly integrated collaboration from Day 1 will be the mark of a successful company.
3) Be Highly Specialized, Non-Integrated, and Positioned to Frame the Question
AdAge published an article by TB Song, Ogilvy’s Greater China Chairman that talks about the changing trends in China. Song states:
“Marketers often spend 10% of their budget to produce the average TV spot and 90% to blast it across mass media. In the coming years, budgets will look more like those of movie studios –80% for production and 20% on promotion. The stronger the content, the less one needs to spend on publicity.”
Indeed, today’s individual will only pay attention if there are nuanced, resonating, and timely personal meanings and relationships involved. But in this chaos its not only content production that will grow, the more important issue is What the content production should be, and Who it is for.
Song proposes that Ad Agency Planners will break away and form their own niche practices. I agree with Song’s forecast. Successfully answering “What content production should be and Who it is for” requires long-term, immersed specializations in categories/practices to develop the proper insights and trust. As traditional segmentations give way to tribal rituals, secrets, and micro-social interactions, the important question becomes which tribe, ritual, secret, and interaction should the organization/brand be involved with. Only a highly specialized professional service has the chance to answer this question. Specialists need to detach themselves from their present integrated service units in order to focus on particular areas and find the greatest relevant value – that”s what clients are really ready to pay for.
Unfortunately not all specialists –and by extension agencies– are created equal. Planners are already positioned to capture high individual value because they are helping make sense of the chaos, and helping to frame the question. By the same logic specialized market researchers and management consultants may have a similar value-added.
This leaves Creatives in a particularly difficult position. In an age where one ‘Big Idea’ has a harder and harder time convincing its value and ability to resonate, Creatives are at risk of becoming a commodity. The earlier mentioned Fast Company article suggests that the way to capture higher value is for Creative Strategists to evolve from story-tellers to story-builders, meaning they curate, participate, and add to a never-ending storyline/lines in co-creation with the end individuals. This again would need to be highly specialized, as story-builders need to be adept at maintaining and innovating intricate interactions that are relevant to the cultural nuances of the particular community.
There are some services following de-integration that will be commoditized, and have already begun so. Media buying, media metrics, and to a lesser extent creative production are becoming more interchangeable and will become generally support-services, because they don’t answer the main value question “What content production should be and Who is it for”.
Those that will offer the highest value, and reap the greatest rewards, will be those professional services that can de-integrate, and be highly specialized with the ability to Frame the Question.
While the above Formation, Scale and Scope sections deal with organizing oneself for tomorrow’s industry, this Value section is about defining and defending a sustainable positioning.
4) Give Free Data-Points, Get Paid for Insights
A great blog article interviewing the founder of PSFK reveals the new nature of information value-creation, and anyone in the Business of Information –professional services, publishers, media– should pay attention. The small team at PSFK navigates through an immense amount of information and data points at a voracious speed. Acting as a media platform, they freely share and broadcast the information they come across with the public. PSFK instead gets work and makes its money consulting on concept development and trends. Their value-added is not from the selection of information they broadcast, but from linking disparate data points, synthesizing patterns into insights.
Why freely publish what you’re looking at? Shouldn’t keeping it secret give you more advantage?
PSFK has embraced the new reality that information flows free, and the benefits gained from free broadcast outweigh the loss of potential revenue from taxing that information access. Consider why you use Twitter. What benefits come from freely tweeting and re-tweeting all those links? For one, you gain a following of people who begin to associate you as a credible source for a specific kind of information — sounds to me like the best kind of advertising you could hope for. Perhaps more importantly, you build conversations and relationships with a growing network of like-minded and equally amazing people. A network that will elevate the quality of information you consume by in turn sharing with you what they’re looking at. In this new insight economy, professional services are only as good as their information community. The traditional model of market research that ignores community immersion and commitment is dead. Give free data-points. Build your information community. Get paid for deeply nuanced insights.
5) Narrow-Casted Community Connectors
Your community is your long-term defendable competitive advantage because it is one of the most difficult assets to build and copy. Ask any Web 2.0 platform and they’ll attest to this. Communities are not just important for social media, but as we’ve just discussed, for professional services as well. Once you have immersed yourself with credibility and trust in a distinguishable community, clients won’t just want to draw on your insights from that community, they’ll want to connect to the community itself. And they’ll hire you to help them do it. This is the professional service’s next value added beyond insight. This is the real influence industry.
As a community connector, a professional service will ‘narrowcast’: strategically identifying and working with a small group of community leaders who influence the influencers. Each company will narrowcast in the community they’re immersed in. PSFK offers connection to high-level creative thinkers. Co, narrowcasts from their extensive network of media, branding, technology and other experts in North America. Victor & Spoils, another company mentioned in the Fast Company article, crowd-sources creative production from their base of operations in Boulder, Colorado. China Youthology, the company I help lead, will explore connection opportunities between passionate organizations and the China Youth community.
Being a connector can produce powerful win-win opportunities, but can only be achieved by first having credibility with the community. This credibility is rooted in deep immersion, commitment, passion and membership.
“Won”t you be my neighbour?”
Where could we see this new model of professional service enter mainstream use?
It would have to be a place that a) Clients are willing to try new things and are thirsty for an edge b) There is less dominance by conglomerate holding companies c) There is a sufficient supply of talented specialists d) There is an entrepreneurial spirit by those in the industry e) There are growing communities of interest
I’d say that China has some challenges when it comes to growing the supply of quality talented specialists, but this problem is already on its way to solving itself as more and more talent migrates to Asia in search for new opportunities. The other hurdle for China are the clients. It is not that China’s domestic clients aren’t willing to try something new, but the unsophistication, immaturity and general lack of standards in the client-agency/consultancy relationship has in the past made progress difficult. A lot of education, hand-holding, and culture-building continues to be needed. But perhaps this is also China’s saving grace. With less legacy impeding the breaking of convention, maybe China will have an easier time embracing a new agency and consultancy model.
However, I can also see other regions being the first to champion this model. All have their weaknesses and strengths, but all are in desperate need for change, and a model — like this one — that can help solve their ills. I would also surmise that the adoption of this model may arise by industry instead of by geography. Ad agencies and Market Research agencies I would expect to be the first.
Some last thoughts:
With all this reinvention going on in agencies and consultancies, the onus is really on Clients. In the new Insight Economy marketers will not be able to rely on a one-stop-shop to answer all their questions and do all their work. It won’t be only a matter of assigning budgets and deliberating on pitches. While able to help clients frame the right questions and connect highly nuanced strategies, new agencies and consultancies will only be able to add value if the client is sophisticated enough to know what kind of professional service they need, and what kinds of value creation really matter to the organization.
If you’re finding yourself in the Insight Economy, and feel the pains of the industry, start your reinvention by first asking, What’s your specific community of connection? How do you immerse to capture the right, relevant insights and build to provide a unique, value-added professional service?
Posted: July 5th, 2010 | Author: Kevin Lee | Filed under: Kev's Thoughts On... | Tags: Angel Investor, Beijing, Business Model, China Innovation, Copycat, Entrepreneur, Incubator, Innovation Works, Investment Bank, Lee Kai Fu, Startup, Venture Capital, Web Wednesday | No Comments »
In the past couple months WebWednesday Beijing, a monthly gathering of Internet, tech, and digital marketing professionals has invited speakers from the China venture capital & start-up investment world share to with us their thoughts. Harry Man is a Partner at Matrix Partners, a venture capital firm in Beijing with a home base in Boston. Stanley Tang is Vice President at China Renaissance, a financial advisory investment bank for startups seeking funding.
The majority of the speakers’ thoughts and tips were fairly mainstream venture capital selection criteria, such as looking at the ‘Team first’, then the Market, then the Model. However, there was a common point made by both speakers specifically about venture capital dynamics in China.
1) Harry Man mentioned that the ‘Copy-to-China’ model is good. Creativity in China is not on technology, but more on the business model.
2) Stanley Tang said that their firm highly prefers to work with those business plans that have benchmark businesses overseas.
What does this tell us about the startup investment industry in China?
Quite simply, we’re seeing that venture capitals, start-up financial advisors, and investment banks are very active in funding copycats because the model has been tested and proven in other markets, thus lowering investment risk. This also means that the sentiment, attention, and majority of investment dollars are supporting the copycat industry in China. Both speakers mentioned that there is still a lot of opportunity for creative localization and adaptation of tried & true overseas business models. These professional investors also noted that they do prefer local Chinese entrepreneurs, as the nuances of Chinese localization are best identified and executed by a native of that culture.
Here I must add a caveat: It may be that the speakers we listened to were coming from smaller VC and investment firms, so their investment strategies cannot take on higher levels of risk, and therefore have crafted this ‘prefer copycat’ guideline as an additional risk-mitigating rule to help them in their selection criteria.
But if two speakers are saying the same thing, then it is likely that this is common practice and strategy among many China investment firms.
Given this clear preference for investing in copycat start-ups, what does this mean for original innovation in China?
Here I want to add another caveat: We could be looking at a paradox – chicken & egg – scenario. Venture capital’s preference for copycat start-ups maybe a direct result of the entrepreneurial ideas coming out of China. VCs are investing in predominantly copycats perhaps because the other actual original ideas are just not very good. Maybe the best that would-be entrepreneurs in China can come up with right now is copycat models. Indeed, both speakers mentioned that they do a lot of handholding with their selected investment start-ups, as most are first time entrepreneurs.
Regardless of which side of the paradox you believe to be truer, one thing is for certain: one reinforces the other. A VC culture of investing in copycats drives many entrepreneurs to think, plan and look for opportunities only as a copycat. Conversely, if there are not enough good, fresh, original ideas coming out of China’s entrepreneurs, naturally this will influence VCs to allocate their funds to primarily copycat models.
If China has this downward spiral paradox, how then can it break out, and get the chance to build an investment ecosystem that at least allows China the opportunity to create something completely unique?
In the developed economies, and especially in the North American context, Angel investors help to fill that gap between early stage startup and venture capital financing. Angels play a pivotal role in championing a much wider variety of entrepreneurial permutations – the widest rim of the funnel – which inevitably gives rise to a greater probability of different and unique innovations being funded by venture capital. In China the Angel circuit is almost non-existent, a natural consequence of an economy and investment environment that has leapt almost overnight from a society of have-nots to a society with a small group of have-plentys with no investing experience.
To fill this gap, venture capitalists are revising their tactics and role in China, taking on more duties that normally an angel investor would do; the VC often provides training, HR, and direct development strategy. But venture capitalists can only do so much.
Lee Kai Fu, the former head of Google in China, identified this systemic problem with China’s innovation capacity very early on and decided to do something about it. Late in 2009 he announced the creation of a new company called Innovation Works. This company would be a hybrid angel-investor/startup-incubator. While adding a very minimum seed capital into the ventures they recruit, Innovation Works’ main value-add is its ability to augment the founding entrepreneurial team by supplying expertise in areas the founders have not: finance, marketing, user experience, design, strategy, engineering, etc. All the combined expertise makes for better product and business quality, and better chances of market success. Lee Kai Fu’s prestige and Innovation Works’ reputation means their endorsed startups have a clear path to eager venture capitalists ready to ensure enough funding so the startup can reach its full potential. What Innovation Works gains in return is a significant share of these top-grade startups, effectively giving Innovation Works a portfolio of higher-performance, lower-risk startups. Innovation Works may eventually end up with a better IRR and higher startup success rate than even the top VCs.
Innovation Works is a new kind of creature for China, and perhaps is the structural component China needs that will allow entrepreneurs to pump fresh ideas and opportunities into the startup soil bed here. There are other natural incubators in China, namely the academic institutions like Tsinghua, Peking U, and Fudan. But whether universities can weaponize incubation as well as a privatized entity like Innovation Works remains to be seen. The other saving grace may be in China’s DNA of copy-cating. Now that Innovation Works has shown one viable model to solve this innovation gap, will others copy and iterate? Maybe an entire industry of incubators is just what the doctor ordered. It could give entrepreneurs enough time and incentive to start thinking beyond copycatting and give China some real new creativity. It would also give VCs breathing room so they could start funding unique ideas beyond just copycats.
Incubators can also innovate themselves. Innovation Works is just one model, best suited specifically for the tech industry. The challenge is how incubators can be applied creatively to other industries with dynamics different than purely product-based startups? How can incubators be brought to benefit grassroots cultural entities? Can incubators be catalysts for human capital development? Similar to the tech startup environment, can incubators help open-source, viral, or the creative industries find monetization models faster, cheaper, with less risk, and with more accuracy?
One final thought: I agree with Harry Man when he says that creativity in China is not in new technology but in new business models. Its not that China cannot produce new technologies, it can. But it is so obvious that the size of China’s markets, the economies of its scale, and the ability now to crowd-source at a hyper extent, means China’s greatest and easiest opportunities for innovation and creativity will come from new business model development. There will be models that can only be tested and proven in a market size only China can currently provide. Models that America’s numbers cannot validate. There will be models that emerge from China with individual margins too small to be worthwhile in America, but extended with China’s long-tail, these models may suddenly become viable. And there may be models based on cultural norms found only in Eastern cultures, norms that may alter the paradigms of doing business, norms that the West could not behaviourally or naturally conceive of.
Incubators could be a key player in innovation and creation for China. At the very least, they could offer China the opportunity to switch course, away from the diminishing returns of copycat startups.
Posted: February 5th, 2008 | Author: Kevin Lee | Filed under: Kev's Thoughts On... | Tags: Apps, Business Model, Facebook, Google, Kev's Thoughts On..., MySpace, Property, Social Networking, Web 1.0, Web 2.0, Web Landscape, Widgets | No Comments »
As I dwell more on Web 2.0 and the numerous ways companies like Facebook, Google and News Corp try to monetize users’ actions on the internet, a recurring analogy keeps coming to my mind, one that gives me a real-world perspective and helps me better understand what is going on in the online landscape.
The Internet, in essence, is another dimension of real estate and the international property market.
There are many others who have described the same similarity, so it is nothing original, but I find it important in helping me think about the next directions Web 2.0 is going. Please excuse the crude simplicity of the analogy and my layman’s knowledge of the industry as I try to make my points.
A quick recap of the Web 1.0 world finds that the era was littered with Portals, Store-fronts, Exchanges and Personal pages. Portals like ol’ AOL are like universities requiring tuition or special paid-admission malls. A one-stop-shop for information, purchases and even socializing. This is the classic fee-based or subscription-based business model.
Store-fronts like Amazon, and Victoria Secret are similar to the real-world Wal-Mart; massive business vendors that see millions of customers walk through its doors everyday. Exchanges like Ebay can easily be compared to the NYSE. Both of these kinds of properties are transaction-based, whether it is real goods and services or information. This business model subsequently is still successful today.
The personal pages or simple business marketing websites that exist on the Internet are like mom & pop stores, or residential homes. More often than not, they are built out of necessity or social fascination, often not having a business-model in mind and usually do not make enough income to even pay for itself. There is nothing wrong with not having a business model, as many people start pages for social reasons. I just had to include it as an observation of another type of online property.
So in the Web 1.0 world we see littered around a handful of paid-admission malls, universities, Wal-Mart-like vendors, NYSE-like exchanges, mom & pop stores and residential homes.
I should add that Search-Engines also emerged during this time, and with the help of its poster-child, Google, propelled the Ad-Supported business model to preeminence. However, Search-Engines are merely another type of property as well, more like a very important highway that is surrounded by billboards.
Ads have since moved from static banner ads to relevant text-based click ads, and now experimenting with contextualized interactive video ads.
Now that we are in the Web 2.0 world, where user-generated content is all the rage, how have online ‘properties’ transformed? The new web stars such as Facebook, MySpace, YouTube and LinkedIn are much more like cities. These are properties that are built on the social community, the collective power of the many, and develop their own unique character and charm depending on their constituents. This is a far cry from malls, vendors and exchanges of the last era. Unlike a Wal-Mart or NYSE where visitors are attracted by the architecture and goods offered by the creator of the property, the cities of Web 2.0 attract inhabitants because of the organic ability to develop niches and community ‘flavors’. Think New York City’s SOHO or Tokyo’s Harajuku.
These online cities have begun to build their business model around what has worked best in the past, namely the Search Engine’s success with Ad-Supported revenue. The online ‘NYC’ helps pay for itself by having billboards in Times Square and the online ‘Tokyo’ has expensive advertising properties in Shibuya. So now Web 2.0 cities like Facebook and MySpace can breathe easy because it can monetize itself by placing user-specific, targeted ads in and around its site for the numerous citizens inhabiting their property.
It seems quite fine and dandy. So isn’t it a smart move to invest in building a massive social community since you know with those numbers you’ll be able to profit off the advertising revenues?
It may be, but it will cost you first. Online cities are just every-bit as much of an investment as building a real city. Just replace the construction cranes, zoning rights and subway systems with software developers, servers and bandwidth costs.
Even after all of that expenditure (in the Web 2.0 world most likely spent with VC money), it may all still be worthwhile if you’re sure you will be the next, say, Facebook.
Here lies the problem: Online properties are extremely transient.
In New York, Tokyo or anywhere else in the real world, inhabitants must either buy or rent property, and usually the payment for only one property is all anyone can afford. Not so online. A netizen who has been around long enough likely has a space in several social network properties simply because it is free to sign up and maintain. Those that love the online equivalent of NYC’s Upper East Side and Tokyo’s Akihabara can online, actually have a place in both communities, and another place in Shanghai, Dubai, London and Moscow for that matter. It’s almost like the ‘golden horde’ effect, coined by Thomas Friedman as he described the movement of global investment capital flows. Like so, netizens will quickly migrate to the next new and coolest community, because the financial costs are nil and the social drivers are everything. And while maintaining a space is free on most online properties, value is not derived by how many open accounts a Facebook or a MySpace has. A site’s value is instead derived from the share size it can grab of the only thing that is finite to a user: her time.
Can you imagine if one year Disney World was full during the summer vacation season, but the summer after it was completely deserted because everyone went to the new Universal Studios that opened across the street? Or going back to our analogy of NYC, if in the course of a few years all its millions of inhabitants migrated to San Francisco just because it became more interesting?
Online properties are extremely transient. It wasn’t so long ago that Friendster was the place to be, or Xanga. And for those that can remember just a few years earlier, Asian Avenue or Black Planet?
Suddenly the Facebook or MySpace or YouTube doesn’t seem like such valuable property anymore. The only reason why the real Times Square is one of the most expensive properties in the world is because people can guarantee it will be trafficked by millions day-in and day-out for many years to come. Even Google, arguably the most trafficked and valuable property online does not have the same level of entrenchment and therefore cannot stay still. Google’s value will immediately diminish if it misses the next revolution in search or even lets another start-up be the first in the arena. And that is a real possibility. Just look at Yahoo or MSN not even ten years ago. Whether its Semantic Web or something else, all the online properties in the Web 2.0 world must find ways of keeping user traffic in their sites. Only then will the ad-supported business model stay afloat.
Enter Widgets & Apps. Online social communities are continually allowing open APIs for third party developers to create interesting sociable programs for netizens to use within the online properties. These Web 2.0 cities encourage people to build interactive attractions within their property to make it all the more interesting for online inhabitants to stay. In my eyes, Widgets & Apps are like the Starbucks of the real world. People just can’t get enough of it, and there is one on every corner of every block. I believe we are entering an age where the Widget/App will gain more and more importance and influence in the online world. As more and more developers shift from trying to create their own social community to creating the next great App, more interesting, and powerful products will appear.
While this might be good news for online cities, since all of these Apps will exist within their domains and work to keep inhabitants from migrating, there is one fallacy. We have seen and heard of Google’s OpenSocial, an initiative attempting to standardize development protocols so Widget/App developers can easily make their software compatible with any number of participating online communities. The problem for the online cities like MySpace, LinkedIn and Ning is that pretty soon the Apps that are supposed to make their property unique and ‘sticky’ for the inhabitant will be available in every other online city, completely neutralizing any ‘social advantage’ one online property would have over the other. Just like how you can find a Starbucks or McDonalds on almost every corner in New York or Tokyo, so too will emergent App makers like Slide, iLike and Google Maps be found on every single social network in the world.
So while OpenSocial may have an adverse affect for Social Networks, it will at the same time be a catalyst for the App’s continued rise to stardom. These Widgets & Apps are still property mind you, even though they are at present still trying to figure out the right business model. As of now Apps are still compulsively obsessed with the ad-supported business model that both the Social Network and the Search Engine love so much. As a property you can think of ad-support Apps like a Starbucks on every corner giving away free coffee but hoping you’ll buy their recommended CD of the month. Or like McDonalds giving away Happy Meals hoping you’ll buy a toy.
We are now on our third generation of online properties who have survived and succeeded based on an Ad-supported business model. Will it change? Perhaps. But its hard to move an entire industry that are true believers that traffic = ad dollars. Widgets & Apps have a unique opportunity to play with their business models that social networks and search do not: These new programs are transient and user-perpetuated, almost viral in nature. They can go in and out of Social Networks, Blogs, and many other online properties of the both the Web 1.0 and 2.0 eras. And while social networks continue to shift and collide like tectonic plates, jockeying for a bigger piece of the user’s online presence, Apps will be in every one of the properties, becoming increasingly more interactive, and capturing more and more of what’s really important: the user’s attention.
As an entrepreneur what kind of property would you rather create? A New York City, or a Starbucks Corp?