Thanks to Geek and Poke for the cartoon.
When I was eating sushi and chatting with Jeremy Wright, CEO of B5 Media, and Don MacAskill, CEO of SmugMug, Don, at one point, pointed out that SmugMug had 150,000 paying customers and was profitable. I answered back “oh, I guess you aren’t a Web 2.0 company then” and we all had a big laugh.
But that laugh has been bothering me. Comedy works best when it’s reflecting a truth no one wants to admit in public. I’m noticing something in the valley. The newer companies are struggling to get noticed. Are struggling to figure out how to get outside the TechCrunch/TailRank/TechMeme/Reddit/Digg/Slashdot/Om/Scoble bubble.
I’ve been awfully cheery of late, but I’ve been comparing traffic notes with bloggers, journalists, CEOs, and other geeks and there simply isn’t that big a pool of traffic out there unless you can get some hot search term on Google or Yahoo.
Hint: what’s Jeremy’s most profitable blog? It ain’t about Ruby on Rails. It’s about Lindsay Lohan.
The thing I’m noticing is that outside the valley most people use search engines to find things. Google, Yahoo, AOL, MSN, etc.
How strong is that? Well, insiders tell me that one of the top search terms over at Yahoo is actually “Google.” And one of the top search terms at Google is “Yahoo.”
Why is that? Because most people outside the little tech bubble we live in every day don’t know how to use Web browsers. They have been trained to use the search box.
Not many people are talking about how to get outside of our little tech bubble. At least not in public.
But Joe Kraus, CEO of Jotspot, let slip that he’s hired a person who is just analyzing how good their keyword advertising is working. He wouldn’t tell me his favorite Google keyword. Why not? Cause that’s how he’s going to escape the bubble and provide a return on investment for his investors.
I wish we had a conference on “how to find customers outside of the tech bubble?” The entire industry could use some creative thinking there.
Other things that are catching my eye on this topic this morning? Renee Blodgett wrote a post about “Web 2.0 out of control” and Paul Graham, VC behind “Y Combinator,” which is a grouping of companies in the Web 2.0 space pulls out his best Richard Nixon impression in a TechCrunch interview and says “this is not a bubble.”
Of course it’s a bubble, but it’s not bubble 1.0 (actually, I’m agreeing with Paul’s interview, he did say it’s not a financial bubble).
Kraus, again, told me last week that ”it’s a bubble.” He should know. He cofounded Excite at Home, which was one of the biggest companies in the last bubble. But, he detailed the differences in bubble 1.0 and this bubble.
First, retail investors are not involved. Translation: your mom and dad can’t buy stock in any of these Web 2.0 companies so they won’t be hurt this time around like they were last time. Web 2.0 companies aren’t going IPO. They aren’t getting big.
Second, the amount of money involved is still small. Yeah, the company I work for got $5.5 million. Digg. A couple of million. And so on. But you aren’t seeing the total pouring in of capital without any oversight like last time around. I disagree with Graham that stupid things aren’t being invested in, I’ve seen a few.
The capital being invested today is being done by professional investors who keep a great deal of oversight on their money, Kraus says. He also points out that these are people with billions under their watch, so $5 million invested is like when you or I go into Las Vegas and put $20 down on a Blackjack table. Yeah, it bothers us when we lose it, but it doesn’t really hurt. Patrick won’t go hungry if I lose $20.
So, what kind of bubble is it if it’s not an investment bubble? It’s a froth bubble. MacAskill has a post titled “Flickr doesn’t suck” where he details some of the froth. The biggest businesses, or the most profitable ones, don’t always get the PR and attention. Heck, working at Microsoft, I learned that in a pretty deep way.
It’s getting harder to pick good ideas out of the froth. Why? Cause there’s so many more things coming at all of us. Look at some of those Web 2.0 lists. They are hundreds of companies long. I remember back when blogging started taking off. The entire industry fit into one coffee house in Mountain View.
So, how do we pop the froth? I don’t know. I’m trying to listen to people outside of Silicon Valley, for one. For two I’m trying to find companies that normal everyday people are interested in (ie, non geeks) and I’m listening to the grapevine to find companies that are making money with the Web 2.0 business models (dating site Plenty of Fish, for instance, is making their payroll with Google ads and doing darn well at it).
How can we detect the difference between real businesses and froth? How do you?
I do like Paul’s point of making things that you want to use yourself. That’s how I come at this too. I try to point out when I actually use something instead of just am pointing to it.
UPDATE: I agree with Dead 2.0, mostly. One thing, though. Web 2.0 is largely funded by advertising. Advertising is an AUDIENCE business. So, when Paul Graham is telling his companies to worry about building audience first, that’s actually a good point of view to take. It’s like building a magazine. If you don’t have any readers you won’t get any advertisers.
Q. insiders tell me that one of the top search terms over at Yahoo is actually “Google.” And one of the top search terms at Google is “Yahoo.” Why is that?
A. One reason is because ordinary people know it’s “Yahoo!” but they don’t know whether it’s dotNET, dotCOM, dotORG, dotGOV or something else entirely. Worse, with some sites, if you guess the extension wrong you get a NSFW squatter page. So it’s easier to search.
Q. insiders tell me that one of the top search terms over at Yahoo is actually “Google.” And one of the top search terms at Google is “Yahoo.” Why is that?
A. One reason is because ordinary people know it’s “Yahoo!” but they don’t know whether it’s dotNET, dotCOM, dotORG, dotGOV or something else entirely. Worse, with some sites, if you guess the extension wrong you get a NSFW squatter page. So it’s easier to search.
SEO is not dead
SEO is far from dead; in fact it is still one of the best ways to drive targeted traffic to a website. Normal people don’t read technology blogs so they aren’t going to hear about your company that way. You need to find a way to get in front of them …
[...] The prevailing wisdom right now clearly states that Web 2.0 is a bubble. A “frothy“, “fuzzy” bubble. And all this time I thought it was a revolution… So where does revolution meet the idea of a bubble? [...]
>I wish we had a conference on “how to find customers outside of the tech bubble?
robert, you’re invited to seoroadshow (this is a test, see if you can find the details all by yourself, hhh)
>I wish we had a conference on “how to find customers outside of the tech bubble?
robert, you’re invited to seoroadshow (this is a test, see if you can find the details all by yourself, hhh)
> Q. insiders tell me that one of the top search terms over at Yahoo is actually “Google.” And one of the top search terms at Google is “Yahoo.” Why is that?
As a long time web designer/SEO/marketer who talks to non-Web people on a constant basis, I’d say that this statistic is due to the fact that most people don’t understand how browsers work (heck, they don’t even know what a “browser” is and have never heard the word). Either their browser’s home page is a search engine page and all they know is how to *search* for something (e.g., “Google” at Yahoo) or they simply don’t know that they can type a domain name into their browser address bar — and this goes for most people, be they living in remote mountain areas or CEOs of billion-dollar corporations. What you’ll hear is this:
Me: go to my website, blahblah.com
Them: Don’t worry — I’ll find it!
Find it? What’s to find? But that statement is your first clue, and the reason why Web marketing *must* take the search engines into consideration. It’s not like paper advertising, which you must somehow place into the hands of the consumer. Nor like TV, which is another medium altogether. Different medium; different delivery solution.
As to the other questions here, I’d say that sorting out a business plan comes immediately after any “bright idea” … that is, how you’ll make money from it. Yes, it’s exciting to build an audience. Even more exciting is making a living from something you like/love.
> Q. insiders tell me that one of the top search terms over at Yahoo is actually “Google.” And one of the top search terms at Google is “Yahoo.” Why is that?
As a long time web designer/SEO/marketer who talks to non-Web people on a constant basis, I’d say that this statistic is due to the fact that most people don’t understand how browsers work (heck, they don’t even know what a “browser” is and have never heard the word). Either their browser’s home page is a search engine page and all they know is how to *search* for something (e.g., “Google” at Yahoo) or they simply don’t know that they can type a domain name into their browser address bar — and this goes for most people, be they living in remote mountain areas or CEOs of billion-dollar corporations. What you’ll hear is this:
Me: go to my website, blahblah.com
Them: Don’t worry — I’ll find it!
Find it? What’s to find? But that statement is your first clue, and the reason why Web marketing *must* take the search engines into consideration. It’s not like paper advertising, which you must somehow place into the hands of the consumer. Nor like TV, which is another medium altogether. Different medium; different delivery solution.
As to the other questions here, I’d say that sorting out a business plan comes immediately after any “bright idea” … that is, how you’ll make money from it. Yes, it’s exciting to build an audience. Even more exciting is making a living from something you like/love.
Ok, that makes some sense. Yes, there are lots of sites I use to look for specific items. However, I do spend a great deal of time at Google looking up things that I don’t already have committed to memory.
Ok, that makes some sense. Yes, there are lots of sites I use to look for specific items. However, I do spend a great deal of time at Google looking up things that I don’t already have committed to memory.
Robert,
I’ve written a lengthy response inspired by this post and the comments here. Take a look at http://blogs.jigzaw.com/?p=76
Shannon
Robert,
I’ve written a lengthy response inspired by this post and the comments here. Take a look at http://blogs.jigzaw.com/?p=76
Shannon
Ain’t technology grand
Nice to see that maybe, just maybe the Valley tech geeks (whom I love and have been adopted by as half-geek) are starting to realize that people who don’t get it, actually may not get it, because they really don’t
[...] Robert Scoble talks about the new bubble being “frothy”. He also isn’t sure how to get past it or where to look for answers. [...]
isnt the froth the best bit?
isnt the froth the best bit?
[...] When I’m explaining CPC and SEM to clients, or anything for that matter, I like to use analogies to help describe technical terms and new ideas that they normally wouldn’t hear in their non-”tech bubble” environment. Likewise I explain that a dollar or two for certain keywords isn’t uncommon and like to throw out the funny numbers that some people actually pay for each click. Normally I speak of lawyers and car insurance keywords, but now thanks to TheProGuy, I now know the top 50 most expensive adwords. [...]
I am working with a professional online IT community that’s been in business since 98 and have been looking for other successful, professional communities in other verticals. Know of any?
I am working with a professional online IT community that’s been in business since 98 and have been looking for other successful, professional communities in other verticals. Know of any?
[...] Robert Scoble is a Silicon-Valley-bubble insider–so we’ve never met–but I read his blog religiously because I believe he’s an indicator of where the web is going. Scoble is an early adopter of emerging web-related technologies and searches for what is useful and relevant–and he has great access to those technologies. So, it’s interesting to me that Scoble read’s blogs on his cell phone and chafes at the lack of online content in HDTV format. Is he a fluke? I don’t think so. After all, look at the money in tech convergence. [...]
[...] Source: http://forevergeek.com As the web 2.0 hype continues to become ever more frothy, it becomes more and more obvious that abusing the inherent ’social goodness’ is not really that difficult. [...]
[...] Da un’interessante intervento di Robert Scobleizer sulla redditività delle nuove company Web 2.0 oriented, questa arguta vignetta di Hugh. E se è vero che in ogni commedia c’è sempre un po’ di verità, la vignetta ci deve far comunque riflettere. [...]
[...] Scoble tried to describe the difference between bubbles I and II in a recent post on the Frothy Bubble. The breakthrough now seems to be – investors money is at stake through Google stock and the valuation switch just got flicked to High. Interestingly, he isn’t too hard on the deal, restricting himself to playing a What If… with Microsoft/YouTube – must be to do with being in a (hopefully) take-over target – clever lad. [...]
[...] J’écris souvent que nous, industriels de l’Internet, redécouvrons régulièrement les mêmes problématiques, à la jonction des gens et des applications. Nous trouvons des solutions dejà utilisées, les reconditionnons au point de ne pouvoir plus les reconnaitre quelques temps après. Les volumes et le ‘temps Internet’ déforment nos visions classiques des applications communicantes et des communautés en ligne. Au point de croire que nous contrôlons largement ce qui advient quand des masses d’utilisateurs interconnectés se réunissent et collaborent. Nous ne contrôlons rien. Une grande porte s’ouvre, et tout le monde s’affaire à deviner ce qu’il y a derrière et où elle mène. Mais quoi de neuf ici ? J’ai mentionné quelques exemples, voici une liste plus complète : – Il y a plus d’un milliard d’utilisateurs du Net aujourd’hui. Les effets de réseau apparaissent maintenant même dans les zones moins fréquentées de l’Internet, puisqu’une zone moins fréquentée, ca peut être parfois juste une centaine de milliers d’internautes. – Beaucoup de ces utilisateurs sont habitués au Web [’Web-fluent’]. Robert Scoble a observé récemment que, si beaucoup d’internautes ne sont pas des experts, tous savent rechercher, envoyer du courrier, éditer un Wiki, et la plupart savent déplacer un widget ou configurer une application Web. Ils ont le volant dans les mains. – Les nouvelles pratiques du Web se répandent. Les meilleurs sites et les plus réussis ont réalisé qu’il fallait intégrer ce que Tim O’Reilly appelle l’émulation de l’intelligence collective dans le fonctionnement de leurs services. Et cet aspect collaboratif du Web est encore en retard sur les deux premières tendances. Je suis toujours surpris d’entendre les gens citer Ajax comme le signe principal du Web 2.0, plutot que la puissance des communautés et des effets du réseau. Il y a encore une bonne marge de progression, et j’espère continuer à voir des innovations majeurs dans la conception des services Web 2.0. – Conséquence logique, le pouvoir et le contrôle se déplacent vers ces nouveaux créateurs. Puisque les utilisateurs du Web produisent une part croissante du contenu, ils en prennent le contrôle. Ce basculement de puissance a des conséquences immenses sur le long terme, puisque le Net se déplace naturellement vers les points principaux de puissance. Les implications pour les organisations traditionnelles sont fascinantes et vont s’accroître en même temps que la génération MySpace entre en masse sur le marché du travail. [...]
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[...] “Web 2.0 is largely funded by advertising. Advertising is an AUDIENCE business. So, when Paul Graham is telling his companies to worry about building audience first, that’s actually a good point of view to take. It’s like building a magazine. If you don’t have any readers you won’t get any advertisers.” Robert Scoble – Scobleizer [...]
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