BigShinyThing

It’s not even yet Spring, and dotcom fever has beaten avian flu to become the first pandemic of the year. Those infected are either dusting off their elevator pitches from 1999 and getting their Aeron chairs out of hock, or profoundly suspicious that it’s all a false alarm: that the slow boom is about to turn to another decisive bust. Google is the poster child of Dotcom 2.0, but recently lost a (meaningless) $15.3b of share value in a single day. What does it all mean?

As we’ve said before: we think, this time around, that what will sort the winners from the losers, the dotgones from the dotgonnas, is the degree to which the hopeful new startups, all beamingly optimistic and wifi-ready, realise one simple truth:

Dotcom 2.0 isn’t about selling stuff over the web.

It’s about creating and giving away tools through which consumers themselves can create: new media, new businesses, new ways of being. And then using those innovations — the user-created ones — in turn as fresh media channels through which to spread content, marketing messages, other tools which in themselves create more opportunities for innovation — a self-feeding networked ecosystem, Gaia for the Internet, in which there’s opportunity aplenty for everyone with an idea or something to say.

That’s the dream. The reality? Compare and contrast, for example, Kodak’s latest attempt to get with the wired generation (oh, and survive as a brand): a subscription-based photoblogging system — which has been roundly dissed from all sides — with the storming success of Flickr. Sometimes dreams come true.

This isn’t the old ‘give away the razor and charge for the blades’ business model. It’s about genuinely giving away the best technology available, and then making it even more useful by allowing others to hack it, expand it, use it for their own purposes — retaining just enough control over the resulting creations that there’s still ad-sales, profiling or some other revenue stream built-in to the DNA [or technically, the EULA and API] of whatever the community makes with it downstream. Look at Skype. Look at Google. Look at eBay. They’re not flogging a product — they’re blazing a trail. Dotcom 2.0 is all about accelerating its own evolution, and empowering consumers — even people simply uploading and tagging their holiday snaps — to work as hackers who are adding value, information and with every action pushing the whole thing forward. Dotcom 2.1? Ready for demo this afternoon. 2.2.1? Here Monday. We’re all part of it.

With the above in mind, we offer you in closing the venture capitalist David Hornick’s recent anecdote Company Building For Eight Year Olds (via Gawker), in which an attempt to explain to his son ‘what daddy does at the office’ turns into an object lesson of how the Dotcom 2.0 ecosystem works to enable (even small) people to make their mark on the world. To horribly paraphrase Frank-N-Furter, Don’t Sell It, Spread It.

How long ago it seems, the dotcom bubble and bust. To our eyes, there are two real differences-which-make-a-difference between the first dotcoms and what’s going on at the moment:

• There’s a touch of the vaudeville magician about the current crop of dotcoms: while distracting their consumers (and the markets) with simplicity and openness, they make their money (and are betting their futures) on plans for media empires to rival anything we’ve seen before.

  While punters are having fun with these new toys — uploading their photos, posting to their blogs, gawping at the bigshinything — those same consumers are themselves building, click by click, from the online terra nulla, new media territories where tomorrow the future of marketing and sales will be decided through products and services sold back to them via the channels they themselves have created. Brilliant!

  As evidence, we offer the following:

  • Google is still viewed as a search engine, but its revenue (and future) depends on its footprint as a media owner: every Google brand extension gives it more media surface on which to plant its ads — and as for targetting, who knows what you want better than Google?
  • The must-have iPod probably only really exists to get iTunes onto people’s desktops, and to thus give Steve Job’s growing media empire an early mover advantage in owning media delivery in the next decade — leveraging both brand loyalty with consumers and his success in getting traditional content owners to actually sign up for online delivery — a major triumph given their conservatism.
  • Skype wants ‘the world to call for free’, but still makes its margin from the extras it offers which allow Skypers to interact with the world of traditional telephony.

  For these magicians, a little prestidigitation to keep the brand simple also makes it easier to expand or change the real business plan without having to worry whether its on-brand or not, and without really letting consumers into the secret that they’ve been charmed into doing all the hard work of building the market for them.

• It’s not just consumers being roped in to create the very markets in which the dotcoms wish to sell. The most savvy of these businesses offer out their services for others to innovate with.

  Got a clever idea for a location-based service? Use Google Maps for the interface, and concentrate on the bit of your business that’s unique. Want to add voice chat to your dating site? You don’t need to spend millions on infrastructure, just build it using Skype. Google, Skype, Flickr and the rest make it easy for other people’s clever ideas to come to market: each business using their services increases their media surface and earns them some incremental revenue. Individual bloggers might add a few new pages for Google ads — a startup using Google Maps might just kick-start a whole new category of media in its own right. Lowering the bar for other clever businesses is a low-risk investment in the 99.9999% of innovation that happens outside the established dotcoms themselves.

  These then are what the volume businesses for the 21st century look like — billion-dollar enterprises with cuddly, fun brands and friend-get-friend appeal, which offer access to their core services ‘for free’ to other innovators in return for new media opportunities in the ecosystems they encourage to flourish around them. And so far, it works: not only are these upstarts making obscene amounts of money, they’ve jump-started a new wave of creative systems and services. Look on their works ye traditional media giants, and despair.